A report from the recent National Multi-Housing Council’s Student Housing conference.
Washington, D.C. — According to a panel of industry executives at the recent NMHC Student Housing Conference held here, the student housing sector has tremendous growth potential, despite the current economy. The panel consisted of chief executives from the three largest industry players: David Adelman of Campus Apartments; Bill Bayless of American Campus Communities; and Randy Churchey of Education Realty Trust. The two public companies — EDR and ACC — have reported good results during the recession. ACC has shown growth over the last five years, and its rent growth is up 190 basis points from 2009 to 2010. The company’s total enterprise value, according to Bayless, has risen from $979 million in 2006 to $3.4 billion in 2010.
All the CEOs reported that while they have continued to grow with development, their companies had also focused on operations in the last few years. EDR’s Churchey reported that while expenses have been relatively flat during 2010, during 2011 the company expected a rise of 2 to 2.5 percent, with growth in revenue of 5 percent.
“Very few sectors have the growth prospects that we do as an industry,” said Bayless during the panel session.
One way all three companies have been growing has been the development of on-campus facilities through the proliferation of public-private partnerships.
“Third-party development is not a sexy business, but it allows us to develop a relationship with universities that could lead to more third-party management and to other business opportunities,” said Churchey.
“The caliber of universities looking to companies like ours for assistance in how they develop student housing is a signal to all colleges and universities that they should be looking,” added Bayless.
— Randall Shearin