News
RAISE A ROOF, RAISE FUNDS
May 9, 2011
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| Student housing may be shelter to some, a community to others. But many schools also see residence halls as tools for cultivating lasting student ties that lead gainfully employed alums to make future donations to the university, we learned Thursday during Bisnow's Student Housing Summit at the Marriott Copley Place. Here?s our expert panel: moderator Goulston & Storrs Matt Kiefer(also an event sponsor), the Massachusetts State College Building Authority's Edward Adelman, BU?s Marc Robillard, and Walker & Dunlop?s Brendan Coleman, (another valued sponsor). Next to him are MIT?s Henry Humphreys and Northeastern University's Bob Jose. Matt practices real estate development and land use law including master plan approvals for universities such as Harvard. |
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| We can tell which one in this group will do the best on the final exam. The 250 in attendance are learning from Mattwhywe're sometimes referred to as the Athens of America: metro Boston is home to 50 colleges and universities with 220,000 students. New England has 114 institutions of higher education with nearly 1M students. Brendan says that as a private developer, he seeks to locate near schools that are large, with at least 10,000 students, and have stable residency policies unlikely to change radically over time. |
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| Marc, whom we snapped with Brendan, says that private, off-campus student housing is a tough competitor for the university. In private residence halls, bedrooms are bigger and since they aren't run on the academic calendar, they can offer 12-month leases that are especially attractive to foreign students who may not be able to go home for school breaks. But at BU, on-campus residences are so popular they now house 80% of undergrads (something parents appreciate). Rather than a cost center, Marc sees these dorms as revenue centers with single-occupant rooms delivering the highest value because they're in great demand. Brendan says students? priorities change over time and as upper classmen they prefer off-campus living. But since financing often comes through Fannie and Freddie, buildings must be near school and students need parental permission to move in. |
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| Almost professorially, Bob stayed after to take questions. (Or were those office hours?) He says university housing is a ?retention tool.? There's a direct correlation between a student?s experience in residential life and their willingness to give back to their alma mater. Live/learn communities that have residential and academic features like classrooms had 3,300 students sign up this year compared to 1,100 in the prior academic year. The recession dashed university plans for a new residence hall, but the surrounding neighborhood wants students to live on campus. Therefore, Bob tells us, a private developer will build an 1,100-bed dorm adjacent to campus that NEU will lease and have first option to buy. |
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| MIT recently completed a 10-year $1.4B campus development plan that includes residences and just started what could be $2B in on-campus and CRE development. Henry, whom we snapped as the event wound down, says students pick their on-campus housing and often stay in it for four years. Live/learn communities usually have smaller modules and more communal space for students and faculty to come together. Demand for on-campus housing will grow since MIT enrollment is growing and shifting demographically with more students coming from the South, West, and abroad. As for privately owned, on-campus housing, Henry says it poses a dilemma for the institute. If the residents create problems, it's legally difficult to ask them to leave. |
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| Ed says for public colleges and universities, housing is a basic recruiting tool to attract the best-qualified students who will graduate and remain part of the community as time goes on. Since 2000, the state university system has gone from 10,000 to 14,000 beds, a 40% increase. Academically, he says, students who live on-campus tend to be 10% to 15% more successful. He says all residence halls try to deliver an avenue for learning and all are built to green standards. They may cost more up front but are less expensive to operate over the long term. Ed says financing these dorms is simple: tax exempt bonds, student rents, and fees. Rents are collected twice a year when students move in and two months later debt service is paid. When housing generates a profit, it often results in lower rents. |
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| Rod Scaffert is a principal in the scholastic division of Cutler Associates. An event sponsor, Cutler builds new and renovated privately owned student housing, so far more than 6,000 beds on the East Coast. He tells us that by using the design/build approach, Cutler can guarantee the price early in the development process. Since sustainability is so important, a rehab of an existing building can sometimes be the green way to go. He says most students want their own apartment, so residence halls that most resemble apartment living often have the lowest turnover. |
