Student Housing Gets Swanky
Digested From “Student Housing Gets Swanky and Investors Salivate”
NBC News (07/08/14) Olick, Diana
More and more property professionals are coming to learn that student housing may be one of the best under-the-radar real estate plays of the decade. American Campus Communities (ACC) Chief Executive Bill Bayless calls it "an industry that is ripe with opportunity." To appeal to today's demanding Millennials, though, his company and others in the sector are having to come up with more and more luxury amenities. Most of the private investment in student housing is taking place off campus. Due to budget constraints, a number of major universities have been opening their doors to private investors on campus. ACC recently developed Drexel University's Chestnut Square, a 361,000-square-foot luxury dormitory for 861 students on the Philadelphia campus. It features a large fitness facility, a movie theater, and a virtual golf driving range. In addition, it offers private suites with full kitchens and baths, along with traditional double rooms and communal spaces. While the building exudes luxury, its rates are comparable to other on-campus housing.
Bayless says projects like these are sorely needed, as aging dormitories built for the Baby Boom generation are in dire need of replacing amid a growing U.S. student population. While ACC is the largest REIT player in this niche, other players include Campus Crest and Education Realty Trust. "There's definitely heightened interest in the segment, and because of that you're going to see some winners and some losers," concludes Christopher Merrill, co-founder and chairman of real estate investment firm Harrison Street Real Estate Capital, which invests in student housing.
Abstract News © Copyright 2014 INFORMATION, INC.