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Despite Challenging Season for New Deliveries, Student Housing Development Moves Forward

As Generation Z continues its migration onto campuses nationwide, student housing developers are racing to fulfill this demographic’s changing set of desires and needs. The ongoing shift away from leisure-driven amenities towards designs focused on academic and personal success continues to be seen. And while this shift alone is enough to keep development and design teams busy, the COVID-19 pandemic has ushered in an entirely new set of needs centered around social distancing and the safety of students returning to campus. 

With many universities and colleges offering online classes, designing for reliable internet connectivity is critical, as is tailoring shared amenity spaces for flexible uses that promote social distancing. Developers have their hands full, but the challenge presents an opportunity to adapt and deliver some of the industry’s most success-driven communities yet, bolstering student performance both in and out of the classroom.

Development Trends

Though popular design elements are subject to change, the basic tenants of development success remain a constant. “Quality buildings that are pedestrian to campus with professional management are more important than ever in today’s environment,” says Andrew Wiedner, chief acquisitions officer at Core Spaces.

Even prior to the increase in online classes due to COVID-19, top shelf internet connectivity was growing in importance as one of the most critical offerings for students in today’s learning environment. “The need to improve our technology packages throughout our properties has been a significant change from one generation to the next,” says Ben Angelo, vice president of real estate development at Opus Development.

On top of seeking properties equipped with stellar wi-fi connectivity, students are prioritizing amenities geared towards their academic success over recreation. “Where we might have had a theater room or golf simulator in older projects, we now have a podcast booth or a maker space that allows students room to create,” continues Angelo.

Enhanced technological offerings — like smart technology — are another draw for Generation Z. “We’re seeing an emphasis on smart home technology, increased security and more operational service intensity, which we need to account for in our development budgets and program spaces,” says David Pierce, principal at Parallel Co. 

Pierce has also seen the shift from entertainment-focused amenities to spaces that aid in student success both mentally and physically. “We’re seeing a continued emphasis on designs geared towards success, which include academic-focused amenities, access to healthy food choices in or near the development, high-quality exercise facilities and resident programming that focuses on mental health,” he says. “We are upgrading our common areas in terms of air quality filtering for contaminants in public spaces as well.”

Increased privacy has also gained considerable value among Gen Z students, according to Jennifer Fraser, managing director of real estate operations at Greystar. “These students arrive with a very different set of privacy boundaries and lifestyle preferences than any other generation before,” she says. “The addition of more private units, more collaborative and flexible study areas and — as always — bed-to-bath parity are critical when serving this generation. Off-campus, pets are also a huge trend. Adding pet stations and pet runs — anything pet-friendly is a plus for Gen Z.”

On-campus, the story is much the same, with a focus on affordability and spaces geared towards success. A growing trend in this segment is the development of a greater number of projects geared towards attracting the elusive graduate student market, which historically has shown a preference towards off-campus housing. 

The Standard at Ann Arbor by Landmark Properties will serve students attending the University of Michigan.

“We are seeing a lot of graduate housing projects on-campus, as well as faculty, staff and workforce housing,” says Ned Williams, senior vice president at Michaels. “We are not seeing as many undergraduate requests for proposal as we were in years past. In terms of overall design, the current generation of students doesn’t care as much about flashy amenities — they are really focused on affordability. In surveys across the country, we see fast and efficient wi-fi as the amenity that students care most about. Lazy rivers and tanning beds are a thing of the past.”

And while the development of new projects geared towards underclassmen might be down on-campus, Greg Blais, president of RISE: A Real Estate Company, notes that many universities are looking to renovate their existing housing stock targeting underclassmen. ”On campus, universities are focused predominately on replacement housing projects geared towards refreshing inventory for freshmen and sophomores,” he says. 

“Based on the way students study, we are seeing requests for more private and larger study spaces that foster the ‘study together’ approach,” continues Blais. “Off-campus, student housing continues to focus on walkable sites in solid markets.”

COVID-19 Design Impact — Present and Future

As the industry grapples with providing safe accommodations during the COVID-19 pandemic, Greystar has received a growing number of requests for single-occupancy rooms. “We’re experiencing amplified requests for these spaces, even in shared occupancy markets, such as the University of Southern California,” says Fraser.

Landmark Properties is seeing the same thing. “In the short-term and to the extent that we can, we are reducing or eliminating double-occupancy bedrooms and trying to get as much bed-to-bath parity in our portfolio as we can,” says Wes Rogers, CEO of the Athens, Georgia-based company. “Some of our projects that we’re delivering for 2021 that featured double-occupancy rooms have been redesigned to shift as many of those rooms as we can to single occupancy.”

Following the pandemic, Greystar’s Fraser believes that demands will be framed up with an increased focus on well-being, hygiene and accommodating social distancing requirements. “We are also seeing a heightened need for sizable, high-quality study areas; large outdoor amenity spaces; outdoor, wheel-out fitness equipment; hand washing stations; touch-less faucets in amenity areas; and blazing-fast — almost fail-proof — internet connectivity,” she says.

In current and future design, RISE is incorporating additional square footage to allot for greater social distancing, notes Blais. “This includes the widening of corridors for safer passage, larger bedrooms — particularly when designed for double occupancy — and an even greater focus on fresh air within the building,” he says. “Wi-fi connectivity and bandwidth is critical due to the amount of online classes that students are required to take. This design feature is non-negotiable — today more than ever — and it has already been a non-negotiable for years.”

Creating spaces that are flexible is another design component growing in popularity in the wake of COVID-19. “When it comes to our amenities, we are creating flexible spaces that allow our residents to both gather, find private space and adjust to their needs,” says Wiedner of Core Spaces. “By serving the broader community and diversifying our offering, we are adapting to future changes and won’t be overexposed to any particular unit type or lifestyle trend. From innovative move-in procedures to daily operations, we have increased our focus on distancing and providing residents and staff with the tools to maintain a safe and healthy environment. ”

Though design is shifting for some, others believe that the pandemic does not necessitate any changes for future projects. “Student housing buildings are designed to enforce social interaction,” says Williams. “They are a learning environment just like any classroom. COVID-19 is a temporary problem and we don’t want to present a permanent solution for it. What changes when something like this happens is the way you operate the building, not how it is designed. We have created extensive protocols for this fall for both our on- and off-campus projects and we are sharing our off-campus ideas with our on-campus partners.”

The Pandemic Pipeline

In a survey conducted this May, SHB reached out to industry professionals on their experience with COVID-19. Of the survey’s 569 respondents, 39 defined their company’s role in the industry as that of a developer or contractor. Of that group, 83 percent of respondents indicated that construction was still continuing on their projects despite the inherent challenges presented by the pandemic. 

This tenacity continues to be seen in the development segment of the industry, with most projects delivering either on-time or close to on-schedule, and a healthy pipeline of new and planned development underway.

“Our sector is well positioned for whatever the ‘new normal’ will be coming out of this pandemic,” says Jared Hutter, principal and co-founder of Aptitude Development. “We are going to look very closely this fall at trying to understand what is important to students, and how they are using our buildings and amenities, and then design accordingly moving forward. Our goal — and the industry’s goal — should be to remain nimble and flexible in both our ideas and designs during this time.”

“Greystar’s development pipeline continues to progress with no major impacts from COVID-19,” says Fraser. “We have been able to selectively negotiate additional flexibility into our delivery schedules with some land closings and groundbreakings actually being accelerated. The industry might see fewer deliveries in 2022 than originally planned, but we don’t believe our pipeline will shrink based on any COVID-19 interruptions at this time.”

Williams echoes this sentiment. “From a construction standpoint we never missed a day of work on our projects under construction,” he says. “We only had one problem with supply and that was for cabinets that were being made in Pennsylvania at a cabinet shop that was forced to close down in April. But development is going to slow down some and it is going to be different than it was prior to the pandemic.”

Despite a handful of positive COVID-19 cases on its development sites, RISE also remained on schedule with its development projects, according to Blais. “I don’t see signs of the pipeline shrinking,” he says. “Rather, projects are being put on ice until enrollment figures are announced for the fall semester. The trajectory for new projects will continue to ‘shelter in place’ amid the pressures of the pandemic and the uncertainty among colleges and universities regarding both their fall 2020 plans and plans for 2021. When coupling those pressures with changes in underwriting on the capital markets side, the pipeline may be smaller today, but I expect a rebound once society gets on the other side of this pandemic hump.”

Often touted as a “recession-resistant” asset class, student housing is looking to add one more positive descriptor to its calling card — pandemic-resistant. “Our industry has proven its ability to maintain strong fundamentals throughout COVID-19 and we expect that the sector will continue to earn high marks for its resiliency,” says Wiedner. 

— Katie Sloan

This article was originally published in the July/August 2020 issue of Student Housing Business magazine. To subscribe, please click here