Part 2 of our coverage of this year’s InterFace Student Housing conference.
NEW PRODUCT & DEVELOPMENT TRENDS
Yesterday afternoon’s panel on New Product & Development Trends was moderated by Leon King, COO and general counsel, of Trinitas, and featured: Les Juneau, president of Juneau Construction Co.; Brian Dinerstein, principal of Dinerstein Cos.; Leah Fitzgerald, business development manager for MW Builders; Susan Eastridge, CEO of Concord Eastridge; and Herbert Heiserman, managing principal of Street Sense.
During the past 30 years, there has been more build-out on U.S. college and university campuses than in the 100 years prior to that, according Eastridge. Although the panel focused on new product and development trends, they made it clear that the student housing market is still driven by fundamentals and that each student housing market is different.
Much of the panel’s discussion focused on incorporating student housing into a mixed-use product with retail space.
“Urban schools have a better shot at mixed-use with the right developer,” said Eastridge.
Dinerstein added that the mixed-use site has to be a retail site first and its parking has to be correctly aligned, especially when developing a mixed-use site in the Southeast and Texas. Determining the retail competition surrounding the site is important, too, added Heiserman, because if it isn’t a viable site, the developer will end up being the bank for the mixed-use property’s retailers.
Giving students nearby services 24/7 is a major purpose of the mixed-use student housing movement. Dinerstein shared with the audience that his properties’ peak hours for Internet and cable usage among students is 1 to 3 a.m. — it’s a generation that’s living around the clock.
As for Internet and cable usage, the panel stressed the point of having both hardwire and wireless components in student housing developments.
“It’s too big of a risk not to,” said Juneau. He added it’s the thing students will complain about the fastest.
Finally, replacement housing is a trend for the future as schools have put it off for a long time. Student housing developments built in the 1950s and 1960s that incorporated shared bedrooms and bathrooms are beginning to be refitted for today’s independent student.
SOCIAL & MOBILE MEDIA
Jason Sherman, chief marketing director with Aspen Heights, moderated a strong panel of social media and IT experts, featuring Derek Benavides, vice president of IT with Campus Advantage; John Bower, managing director of IRIO; Ken Cho, co-founder and CEO of Spredfast; and Timothy Stanton, creative director for Campus Habitat. The panel focused on how student housing owners can use services like IRIO and Spredfast, as well as develop their own branded platforms, to create a social media community. Keeping with the theme, using IRIO technology, attendees texted questions to the panel throughout the session.
ARE PUBLIC-PRIVATE PARTNERSHIPS FINALLY THE NEXT BIG THING?
Jason Taylor of The Scion Group moderated a panel about on-campus public-private partnerships. Panelists included Michael Baird, director of the municipal finance division for BC Capital Markets; Jaime Wilhelm, EVP of public-private transactions for American Campus Communities; Tom Trubiana, CIO/senior vice president of Education Realty Trust; and Greg Blais, president of Ambling University Development Group.
According Trubiana, much of the housing stock at American colleges and universities consists of dormitories built in the 1950s and 1960s, and students want something else after their freshman year. As each state tries to cut back on expenses, they are looking to the private sector to preserve their balance sheets and produce a speedy delivery of student housing product.
Institutions can view private developers as a competitor, so it’s critical to have someone within the institution championing the private developers’ cause, especially if it’s the university president or chief financial officer.
Public-private partnerships can 1) be university owned, managed and financed; 2) have a third-party owner and be financed with project-based, tax-exempt bonds; or 3) be equity-based in which the private developer owns, manages and finances the project. The key is identifying what the institution wants.
These partnerships include renovation, rehabilitation and new construction projects. Renovation projects are typically buildings that were constructed in the 1960s or earlier but are cash cows to the institution. They are nostalgic to the school and typically made because of a price point decision.
THE “LISTEN TO YOUR CUSTOMERS” STUDENT PANEL
The student panel was moderated by Dan Oltersdorf of Campus Advantage and featured university students from across Texas.
In one of the more popular panels, investors and developers alike listened to students’ opinions and suggestions on how to improve student housing product across the board. From their dislike of community bathrooms to their love of online applications and social media connections with their complexes, these students shared insights to why they would or wouldn’t sign a lease at your community.
As many students wait until the last minute to sign a lease for the upcoming academic year, the panel’s students proclaimed that a property’s campus presence would lead them to sign earlier as well as if friends are already living in the community.
Everything from bandwidth to pools to parking to security was covered. The students discussed what they were willing to pay more for, how their parents were highly interested in a property’s security, and how they will thoroughly research a property beyond just an online apartment rating site.
Finally, the availability of on-site managers was extremely important to these students as well as the response time of the maintenance staff. If a student reports a problem within his or her unit, they would like the issue to be dealt with in a timely manner – typically within 2 days.
2011 SHB INNOVATOR AWARDS
Wednesday night featured the Student Housing Business “Innovator Awards” Gala Dinner & Award Presentations sponsored by Arbor Commercial Mortgage and Airwave Networks. Over 200 attended the event and 25 awards were presented. Featured below are some of the winners:
Best New On-Campus Development
Winner: Niles Bolton Associates
Project: Poly Canyon Village
Best New Off-Campus Development – Traditional
Winner: WDG Architecture
Project: University View II at University of Maryland
Best New Off-Campus Development – Garden Style
Winner: Campus Crest
Project: The Grove at Huntsville
Best New Off-Campus Development – Cottages
Project: Cottages at Baton Rouge
Best New Off-Campus Development – Urban
Winner: Chance Partners
Project: Southgate Community
Best New Off-Campus Development – Boutique
Project: G6 Apartments
WHY COTTAGES ARE THE HOTTEST NEW DEVELOPMENT TREND IN STUDENT HOUSING
Thursday’s first panel, “Why Cottages are the Hottest New Development Trend in Student Housing,” was moderated by Mike Peter, president and CEO of Campus Advantage, and featured Greg Henry, board of directors and CEO of Aspen Heights; Wes Rogers, president and CEO of Landmark Properties; Brian Thompson, vice president of Harrison Street Real Estate Capital; Will Baker, vice president, of multifamily finance for Walker & Dunlop; and Jason Sherman, chief marketing director for Aspen Heights.
With many naysayers regarding the cottage product, how are cottage developers and investors making it work? The panel wasn’t going to share all of their secrets but were willing to discuss some of their successes.
Rogers explained that cottages don’t work in every market and there are only so many 40-acre sites located close enough to a college campus. But the concept is working well around Southeastern schools, where the majority of the student population drives to campus.
Jason Sherman of Aspen Heights argued that location is a low priority on students’ lists and that they want nicer amenities, especially larger bedrooms, before anything else. Cottages aim to provide the feel of living in a house with apartment-like amenities — the best of both worlds.
Targeted towards more affluent and upper middle-class students, cottages have been the source of some skepticism. Thompson had to be won over before doing his first deal with Rogers’ Landmark Properties. But that deal, in Tuscaloosa, Ala., significantly outperformed the market and Thompson was sold.
Henry said some of that skepticism from others in the industry exists because cottages are still considered new. But Baker highlighted his experiences of taking Fannie Mae and Freddie Mac to tour the actual cottages as well as showing them a consistently strong track record.
Pre-leasing is in the mid-90 percent range for Landmark Properties’s cottages. And Capstone’s Cottages at Baton Rouge in Baton Rouge, La., was 100 percent pre-leased while still under construction.
“SO AN ARCHITECT, CONTRACTOR AND DEVELOPER WALK INTO A BAR”
This session featured two “teams” of developer-architect and developer-architect-contractor that developed two separate projects. Niles Bolton, chairman of architecture firm Niles Bolton Associates and Dave Mulkey, CEO of the Dovetail Companies, presented the best practices that the two companies have learned through their multi-project relationship. Among the best practices were tips on how to review projects pre- and post-construction and how the two companies learned from each others’ strengths.
Next, Bob Mills, president and COO of University Development Services, Charles Poropatic, associate principal and director of student housing for HADP Architecture, and Joe Dusek, vice president of Hardin Construction Company, presented a case study of the Windward Student Housing project the three built under a public-private partnership at Armstrong Atlantic State University in Savannah, Ga.
THE VIEW FROM ACADEME
This morning’s “The View from Academe” panel was moderated by Joan Millane, principal of Millane Partners, and featured Floyd Hoelting, executive director of the division of housing and food service for the University of Texas (UT-Austin); Rosanne Proite, director of housing and residential life for Texas State University-San Marcos; Javier Hidalgo, residential life and housing interim executive director for the University of Houston; and Lionel Maten, director of housing and life for University of Texas at San Antonio (UTSA).
The panel stressed the importance of developing a mutual understanding and respect between universities and student housing developers. Know who the influencers are on campus and understand their needs. Concerns shared by the panel included a strong concern of overbuilding and what it’s doing to the town-and-gown relationship.
“Schools are responsible for students in town,” said Maten.
That’s why Maten tracks every student housing development that’s off campus. It represents another opportunity in which UTSA’s students interact with San Antonio — good or bad. He feels developers should hold these same concerns about towns being overbuilt and how students are interacting with the outside population.
UT-Austin’s Hoelting shared some concerns that students have expressed about off-campus housing in that it can be too expensive, contracts can be too rigid, there’s a bottom-line mentality, and they aren’t interested in student development.
Proite noted trends of students reverting to living on campus even after Texas State-San Marcos lifted its requirement for any student to live on campus. On-campus housing can bring a structure and supervision that some off-campus housing can’t deliver.
TWENTY TECHNOLOGY TIPS
Ronak Shah, director of acquisitions for Texla Housing Partners, LLC, moderated a panel featuring 20 tips on how technology can improve leasing, marketing and operations. Among the tips: use social media heavily; get the best security money can buy; get the fastest internet access money can buy; use mobile marketing; go paperless (but secure) with leasing; and make sure you have an attractive, current website.
“If students see you have a web site from 2004, they’re going to think your property is as old and outdated as your website,” said panelist Gavin Short of The Preiss Company.
Other panelists included Natalie Teinert, interactive and creative director for Campus Living Villages; Zach Borger, vice president of marketing and leasing for Aspen Heights; and Jason Velasquez, director of marketing for The Collier Companies.
Bonus to SHB readers:
If you’d like the 20 Tips presented by this panel of forward-thinking student housing executives,
text “20 Tips” to 47464
and you will be sent a text with a web address with the tips.
With SHB’s show daily E-newsletter and streaming Twitter updates (follow us at @shbusiness or review #shb11 to see our streaming updates) made this a truly interactive conference. We’d like to thank the other Twitter users who helped us keep the industry updated from the conference.
The Student Housing Business and InterFace Conference Group staff would especially like to thank all the attendees, exhibitors, sponsors and readers who helped make InterFace Student Housing 2011 a learning, fun and enjoyable time! Your contribution of time, effort and knowledge has helped the student housing industry grow and move forward this week. Thank you.
— Daniel Beaird and Randy Shearin