Market Profile: Columbus, Ohio

Market Profile: Columbus, Ohio
Housing at Ohio State isn't the typical amenity-rich, purpose-built fare. But investors and owners are keen on the demand, even with an upcoming live-on-campus requirement.

With more than 63,000 students, The Ohio State University is one of the largest schools in the nation. But OSU prides itself on the efforts that go into "making a big place feel small."

 

The Student Life department runs two offices to ensure the university is a partner to its students who don't live on campus: Neighborhood Services and Collaboration and Off-Campus and Commuter Student Engagement provide programs and services for off-campus and commuter students and to assist those looking for housing in the many neighborhoods of the University District, one of the most populated areas at OSU. A strong relationship to its students, no matter where they live, is important to the university's administration and staff.

 

Off-campus, Columbus is something of an anomaly in the world of purpose built student housing: There really isn't any here.

 

kinnear WEBThe Commons on KinnearEdR is one of the only large student housing companies that operate in the market, with its Commons on Kinnear community, which sets the gold standard in rental rates. A one-bed, one-bath studio starts at $909 a month, and a student renting a room in a four-bedroom, two-bath unit is looking at a minimum of $535 a month. At nearly 2 miles from campus, the Commons on Kinnear isn't within walking distance. There are two tiers of housing in Columbus. The sought-after, but quite old by student housing standards, close-to-campus apartments and the more traditional apartment communities further out from campus.

 

The housing options that are close enough where students can walk to class are by-the-unit, older homes built as early as the 1920s that in many cases have been split into apartments. University Village, the largest community serving OSU, has 1,008 units and was built in 1959. According to Kevin Larimer, national director of student housing for Hendricks-Berkadia, the average age of sizeable assets is more than 35 years.

 

"The other off-campus housing options are mainly houses, and older apartment communities that don't have the amenities that The Commons does," says Anne Perry, community manager of The Commons on Kinnear. EdR bought the property in 2005 and invested in improvements in the clubhouse, unit interiors and also led other upgrades.

 

The fabric of the off- and on-campus community is about to change. OSU president Dr. E. Gordon Gee has announced a plan requiring all sophomores to live on campus starting in 2016, making the university the first state school of its kind to enforce such a requirement.

 

A major construction project will catch the newly created "demand" on campus. A $370 million Residence-on-TenthWEBThe Residence on Tenth will add
3,200 beds on campus by 2016.
overhaul of the North Residential District will be a mix of current facilities and new facilities. There are approximately 3,980 beds there now, and another 3,200 will be added. The North Residential District is at the corner of Lane Avenue and High Street in Columbus, and the project also includes new dining, recreation and other support facilities. Infrastructure project work will begin this summer.

 

The goal is to improve academic performance and retention. The university is also introducing "STEP," the sophomore transformational experience program. The STEP program will address a "lost year" problem by pairing students with a faculty member in a 20 to 1 ratio. Not only will the program guide students academically, it also will put sophomores in a mentoring role for freshmen. "Additionally, we want to address transitional roles for sophomores," says Toni Greenslade-Smith, director of housing administration at OSU. "We do a lot of first-year programming to help our students transition from living with their parents to living on their own. In the junior year, you're focusing on your major and getting help finding internships. In your senior year, career services is helping students with career placement and interviewing. But that sophomore year is when we previously had been cutting students loose. Some of the feedback I got from focus groups revealed that a lot of students moved off campus and felt isolated from the university."

 

Once off campus, and because of the nature of off-campus housing, few communities run residence life programs or staff community or resident assistants on-site, which is where the two student affairs departments come into play.

 

"[Community managers] sometimes think of each other as competition, but I've never felt that this office was the competition," says Kim Cory, director of student media for For Rent Media Solutions. Cory is not only an OSU alumna, she also worked for University Village for seven years.

 

"I felt that this office was my business partner and that we were in this together. If I had some vacancy, I always communicated with them about it."

 

The density of Columbus is one of the qualities that sets it apart from other markets. The university runs into downtown Columbus, and new development off-campus, just near the university, is virtually unheard of.

 

"The university is on many investor's target lists, but the infill nature of the market and the lack of purpose-built product makes it hard for both developers and investors to enter," Larimer says. "OSU's close proximity to downtown Columbus, the city's arena district and 1,765 acres on which the university is situated makes it very difficult to find sites for new student housing development. Currently, the university only has about 10,800 beds on campus, which leaves over 45,000 students requiring off-campus housing."

 

Those students tend to migrate in predictable patterns, according to Cory. "Students live on campus their freshman year, they live across the street with a small private owner where they can walk to campus their sophomore year, then by their junior year they're a little more interested in looking further off campus at places that are about a mile and a half from campus," she says. "These properties have more of a community feel versus a scattered-site property."

 

Prior to the mid-1990s, there was a wider gap between the off-campus housing operators and the university. But crime and other issues escalated, and a nonprofit group, Campus Partners, was formed.

 

"Before then, there was an attitude that 'whatever happens off-campus, stays off-campus, and the university was primarily concerned with what happened within campus boundaries," says Wayne Garland, president of Buckeye Real Estate. "Now, Campus Partners has become the central ombudsman between the university, the owner-operators and also the city, the police, and even the alcohol and beverage distributors."

 

Garland is the second owner of Buckeye Real Estate, which was formed by Robert Deis in the mid 1970s. Garland went to work for Deis after graduating from Ohio State in 1981 and bought the company in 1993. Buckeye is a fee management company operating approximately 1,000 units near OSU for Ohio State and for other owners.

 

Garland says the area around campus was developed mostly around the 1920s and consists of high-density rental housing. "Back in the '80s there was a lot of demolition of some of those beautiful old homes," he says. "Then, in the '60s they put up what's sometimes referred to as 'people packers,' 15, 16 units that might have 30 to 32 bedrooms on what was once a single-family house lot. There was an overlay that was developed for the area that was considered the core, so you're not allowed to do that sort of thing any more. You're not even allowed to do lot assemblage unless you go through a big variance process, so a lot of our housing stock here is original homes."

 

The upcoming live-on requirement will remove many renters from the population, and owner-operators aren't sure yet how this will affect the market. "The housing close to campus will continue to experience strong demand," Larimer says. "It's the housing three or four miles and beyond that will feel a short-term impact. The sheer number of undergrad and grad students who require off-campus housing will continue to create an imbalance between supply and demand for housing in close proximity to campus."

 

Larimer says the challenge of locating available assets in the market can be highlighted by GEM/Schenk Realty's ownership of Heritage and Columbus Pacific's ownership of University Village. Heritage is 598 units built in 1969 that was run as a hybrid of conventional multifamily and student housing within a mile of the university. "GEM/Schenk spent considerable capital rehabbing the asset and turned it into a purely student community that is a favorite among OSU students," Larimer says. "Typically, these groups would not consider assets of this age, but they knew the benefits of owning in this extremely tight market. Due to the lack of modern, purpose-built student housing, a new luxury purpose-built asset with all the amenities would be able to establish rental rates not currently experienced in the market."

 

Cory says the new sophomore requirement could be perceived as a deterrent to owner/operators entering the market, but she also says it will be good for the university, as well as beneficially readjusting the typical renting patterns of OSU students. "It may come across as risky to the off-campus owner or manager," she says. "But for the university itself, this is a positive. The focus is better education, higher recruitment and fewer students transferring out of the university. Also, it will change the typical way students look for their off-campus housing. By the time students are juniors, they'll be exploring more options than when they were sophomores.

— Lynn Peisner

 

When in Columbus...
Our sources share their picks for down time when visiting OSU.

Toni Greenslade-Smith, director of housing administration at OSU
One of the offbeat things to do on a Friday night is the wine tasting at the Giant Eagle Marketplace. Guests wind their way through the store sampling a different wine and an appetizer that complements it at one of six different tasting stations. It's close to OSU and one of the best-kept secrets that is gaining in popularity, judging by the lines of people waiting to participate. After the tasting is finished, it's on to dinner at the Happy Greek in the Short North followed by dessert at Jeni's Ice Cream.

Kevin Larimer, national director of student housing for Hendricks-Berkadia
Lindey's in German Village is a longtime Columbus favorite that is a must when in town.

Kim Cory, director of student media for For Rent Media Solutions
Eddie GeorgesWEBEddie George's GrilleOne my favorite local restaurants is North Star Cafe. They use fresh local as well as organic ingredients and have several vegetarian options. The Northstar Burger is amazing, and you can even order it vegan. They have a location near the Ohio State University in Clintonville. When visiting the Campus, check out Eddie George's Grille to get into the Buckeye spirit with great food, atmosphere and a collegiate theme.

Wayne Garland, president of Buckeye Real Estate
I like Rossi and Hyde Park on the Cap in the Short North, both in close proximity to OSU. Rossi is a small neighborhood feel with great burgers and pizza. Hyde Park is a fine steakhouse with nice outside seating in the warm months.

Anne Perry, community manager for EdR's The Commons on Kinnear
A popular area for the students is The Gateway, The Arena District, and also the Park Street area. There are numerous places to eat in these areas and see live music.