Student Housing Providers Look Into Mixed-Use Developments

February 26, 2015 at 7:26 pm Leave a comment

The Wall Street Journal looks at how student housing developers are adding retail, restaurants and hotels into the mix:

Now some developers are transforming student housing yet again, this time adding restaurants, shops and hotels.

The changes reflect a desire among students for services close at hand. “In addition to wanting to live close to campus, students also increasingly seek convenient access to restaurants, coffee shops and other retail stores,” said Brian Veith, assistant director of student housing for the National Multifamily Housing Council in Washington. “Developers are responding to student demand.”…

“Given the right fundamentals and consideration to the creditworthiness of the retail/commercial component, these assets will attract significant buyers that will likely pay a premium for the asset,” said Dorothy Jackman, managing director of the National Student Housing Group at Colliers International.

Sterling Frisco, for example, sold for $223,744 per unit. That is a considerable premium above the average price of $144,160 per unit reported by Real Capital Analytics for student-housing properties sold for $2.5 million or more in the U.S. during 2014…

Judd Bobilin, president and chief executive officer of Atlanta-based development-and-management firm Chance Partners LLC, said that student-housing developers in the past “didn’t want anything to do with retail” because they didn’t want to mix asset classes, which can make projects harder to finance. But now he is seeing mixed-use in about 20% to 25% of the assets being developed.

 

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Entry filed under: Apartment Construction, Housing Trends, Student Housing. Tags: , , , .

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