Purpose-Built Student Housing Has Evolved
With students preparing to go back to school soon, and some starting college for the first time, housing is one topic that has a huge impact on every student’s college experience. The quality of student housing available at a university ranks highly in the decision that a student makes when deciding on a school and a lot has changed in the last thirty years.
Most of us remember in college being crammed with five other people into a nearly falling over house. The college experience has shifted for the better. Student housing is now a huge draw for universities. Communities are embracing purpose-built student housing projects as a way to move students from community houses to centralized locations that can accommodate a student’s lifestyle. To find out more about student housing I reached out to Fred Pierce, founder of Pierce Education Properties and an expert in the student housing industry.
Pierce Education Properties was founded 24 years ago in San Diego, CA. Since then Mr. Pierce has grown the organization to 450 employees and completed nearly $1B in student housing acquisitions. He was named one of 24 national “Student Housing Pioneers” by Real Estate Forum (2013), has received Ernst & Young’s San Diego Region “Entrepreneur of the Year” award for the Real Estate & Construction Industry (2012) among many awards and accolades.
How does one distinguish purpose-built student housing from regular housing? “There are three factors: the unit mix is designed for student occupancy, the property is operated and leased on a by-the-bed basis and units come fully furnished,” explains Mr. Pierce.
A typical apartment building is a mix of studios, one-and two-bedroom units leased as a whole apartment. For student housing, the homes are typically three-and four-bedroom units with a bathroom in each bedroom. One important difference is the lease is for the bed (not the entire unit).
The amenities included in student housing projects are important to the overall experience. For example, Mr. Pierce explains that a lot goes into the add-ons, “The first one, which I would call a staple, is state of the art technology. You have to have very high-speed internet service or you’re not catering to this generation. Wireless is also the standard because the typical person has multiple mobile devices from phones to tablets.”
Other aspects include a focus on a healthy lifestyle experience. Best-in-class 24/7 fitness centers, resort-style swimming pools and spas, multi-purpose rooms that can be used for yoga or other activities, study rooms, sand volleyball courts and basketball courts are the norm. One has to ask themselves if this is really necessary? The answer is yes, at least from the student’s perspective.
By building housing that offers more than empty rooms, the student is equipped with a lifestyle that is designed to promote education, human growth and development and all the amenities they may have been used to at home. At first glance someone might say having a resort pool may be going too far, but having healthy students is important. Although there has not been enough time to fully measure the academic impacts of purpose-built housing, we do know that the student’s environment has an impact on his or her ability to learn. Our communities’ benefit both socially and economically when students work hard and complete their studies, without unnecessary obstacles in their way.
Companies like Pierce Education Properties are enabling universities to make better housing decisions using proven results. However, there have been lessons learned with experience.
Mr. Pierce points out, “A decade ago almost all developers included raised seating theaters in projects and many of those have subsequently been repurposed. The retail portions in multi-use projects have met with mixed results, as usually there’s no anchor tenant, nor a critical mass of retail space. There’s also not the type of parking that people patronizing retail space like to have.”
He adds that including space for the way we live our lives is important as well. The receipt of Amazon packages are a regular part of most student’s lives. Amazon Prime did not even exist a decade ago. The housing projects need to include places where packages can be securely dropped off and easily picked up by students.
Does this sound expensive? The great news is there are more options today than ever for students on the lower side of the income scale. They have the option of leasing only a bed and not having to sign a lease on an entire apartment or house. This is a great benefit to all residents should a roommate leave mid-year. Mr. Pierce’s company has been working to help students in several ways – even going as far as employing approximately 200 of the students at their properties. Pierce’s portfolio also offers some of the most affordable rents in the student housing industry.
“We have a program where if a student is on financial aid, but the aid package doesn’t come in until October, we can enter into a lease with them that allows them to move in at the beginning of the semester and catch up on rent when the check from the federal government for financial aid arrives. In this unique situation, students need the help so we’re willing to accommodate that,” Mr. Pierce shares – noting that some situations have special circumstances.
Because purpose-built student housing developments require more leases than traditional housing, and attending to the needs of students is time consuming, they do require more staffing to manage. Currently, Pierce Education Properties manages over 16,000 lease agreements at 23 universities in 17 states.
For lower income students or those looking to help fund their college education, purpose-built student housing presents an opportunity to work where you live and live with your friends, all while being close to your campus.
The future of student housing is going to be driven by technology, the way we interact with our world and an increase in college bound students. Building projects that meet the specific needs of our college students is going to be even more important in managing the growth of our post-secondary education system and the ultimate success of our students.
Pierce Education Properties, L.P.