Student Housing Trends: What's Hot in 2014 | Webinar with Jay Denton (Property Management Industry)
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Student Housing Trends March 2014
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With our co-hosts Grace Hill and Axiometrics, we hosted a fantastic webinar on Student Housing Trends: What's Hot in 2014. Our presenter Jay Denton, from Axiometrics (leading provider of market data) as he covers the market analysis of this growing sector and what you can do in your business to capitalize on this fast growing trend.
Transcript of Student Housing Trends: What's Hot in 2014 | Webinar with Jay Denton (Property Management Industry)
Student Housing Trends
March 2014
AppFolio
Complete Solution Includes:
Web-Based Property Management Software
• Property management and accounting
• Online rent collection (free)
• Prospect / guest card tracking
• Marketing
• Website
• Payment processing
• Online applications
• Resident Screening
So You Run A More Successful Business
• Leading Education Provider
• Apartment-Industry Specific Training
• Vision Learning Management System (LMS)
• www.gracehill.com
• Facebook.com/GraceHillTraining
Axiometrics Inc.
Student Housing Data and Analytics Provider
• Tracks properties related to more than 450 universities
and colleges across the U.S.
• Collects Asking Rents, Concessions, and
Effective Rents at the Floor Plan Level;
Occupancy at Property Level
• Reports at Property, Comp Set, University, and Portfolio Levels
• Properties tracked from planning through stabilization
• Also tracksconventional apartments, including those competing for students
https://twitter.com/axiometrics
POLLING QUESTION
Which best describes your
Student Housing experience?
Student Housing Compared to Conventional Apartments
The leasing cycle is completely different
Leasing is by the bed rather than by the unit
Concessions are often in the form of gift cards or other items
Unit mixes are weighted more towards four-bedroom floor plans
Amenities are geared towards students
Location is even more important
Demand is primarily from enrollment growth and pent-up demand
“Our similarities are different”
Quote is from Dale Berra describing his father Yogi Berra.
U.S. Enrollment Growth
Demand has been two-fold. Many existing student housing options were obsolete. On top of that, enrollment grew by approximately 6 million students over the last 20 years.
Sources: Axiometrics Inc., NCES
5,000
6,000
7,000
8,000
9,000
10,000
11,000
12,000
13,000
14,000
15,000
16,000
17,000
18,000
19,000
20,000
21,000
22,000
19
80
19
81
19
82
19
83
19
84
19
85
19
86
19
87
19
88
19
89
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
Est.
201
3
20
14F
20
15F
20
16F
20
17F
20
18F
U.S. Post-Secondary Total Enrollment ('000)
U.S. Post Secondary Total Enrollment ('000) Linear (U.S. Post Secondary Total Enrollment ('000))
U.S. enrollment includes schools of all types, including:
-Major universities
-Commuter schools
-Public/Private
-2 Yr Schools (Vocational/Community College)
-Online
U.S. Enrollment Growth Compared to Employment Growth
1. It’s not surprising to see a brief period of overall negative enrollment growth following a rebound in the job market.
2. Not all universities are experiencing negative enrollment growth.
Sources: Axiometrics Inc., NCES, BLS
-5%
-4%
-3%
-2%
-1%
0%
1%
2%
3%
4%
5%
6%
7%
1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 Est.2013
2015F 2017F
U.S. Post Secondary Enrollment Growth U.S. Job Growth
U.S. Enrollment Growth Compared to Employment Growth
1. It’s not surprising to see a brief period of overall negative enrollment growth following a rebound in the job market.
2. Not all universities are experiencing negative enrollment growth.
Sources: Axiometrics Inc., NCES, BLS
-5%
-4%
-3%
-2%
-1%
0%
1%
2%
3%
4%
5%
6%
7%
1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 Est.2013
2015F 2017F
U.S. Post Secondary Enrollment Growth U.S. Job Growth
U.S. Enrollment Growth Compared to Employment Growth
1. It’s not surprising to see a brief period of overall negative enrollment growth following a rebound in the job market.
2. Not all universities are experiencing negative enrollment growth.
Sources: Axiometrics Inc., NCES, BLS
-5%
-4%
-3%
-2%
-1%
0%
1%
2%
3%
4%
5%
6%
7%
1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 Est.2013
2015F 2017F
U.S. Post Secondary Enrollment Growth U.S. Job Growth
U.S. Enrollment Growth Compared to Employment Growth
1. It’s not surprising to see a brief period of overall negative enrollment growth following a rebound in the job market.
2. Not all universities are experiencing negative enrollment growth.
Sources: Axiometrics Inc., NCES, BLS
-5%
-4%
-3%
-2%
-1%
0%
1%
2%
3%
4%
5%
6%
7%
1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 Est.2013
2015F 2017F
U.S. Post Secondary Enrollment Growth U.S. Job Growth
Student Housing Beds Delivered by Year - National
The pace of new supply is increasing, but what does that mean?
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
19
80
19
81
19
82
19
83
19
84
19
85
19
86
19
87
19
88
19
89
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
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20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
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20
13
20
14
The deliveries prior to 1995 were mostly
conventional apartments later converted to
by-the-bed rentals.
This portion of the chart shows how the asset class has
matured and gained interest the last 20 years. It does not
automatically equate to oversupply.
Beds
Source: Axiometrics Inc.
Based on coverage as of February 2014.
National Off-Campus Student Housing Stock by Year
The real estate asset class has grown tremendously over the last 20 years.
Source: Axiometrics Inc.
Based on coverage as of February 2014.
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
Beds
Though total stock continues to increase, it was practically non-
existent just 20 years ago.
Student Housing Stock Compared to Total Multifamily
While Student Housing has grown as an asset class, it is still a small portion of total multifamily being developed.
Sources: Axiometrics Inc.; Census
Based on coverage as of February 2014.
Stock represents net additions.
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
9,000,000
10,000,000
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
Cumulative Stock Added Since 1995 (Net)
Student Housing Other Multifamily
Beds
POLLING QUESTION
What is the geographic extent
of your firm’s Student Housing
portfolio?
Expansion of Student Housing
When looking at macro supply, keep in mind how development has spread to untapped markets.
1990 2001
2008 2014
Source: Axiometrics Inc.
Based on coverage as of February 2014.
Student Housing Beds Delivered by State Since 1995
Universities across Texas and the Southeast have led the way in changing the landscape of student housing.
Source: Axiometrics Inc.
Based on coverage as of February 2014.
0
20,000
40,000
60,000
80,000
100,000
120,000
TX FL NC GA PA CA MI AL VA AZ SC IN OH IL
Beds
Number of Beds Delivered by Development Cycle
These universities have had varying waves of supply deliver over the previous development cycles.
Source: Axiometrics Inc.
Based on coverage as of February 2014.
0
5,000
10,000
15,000
20,000
25,000
30,000
FSU TAMU FLA TEX UCF TEXST GSU GEOR TTU NCSU
2011-Current
2003-2010
1995-2002
Before 1995
Beds Delivered by Year for Select Universities
Deliveries at individual universities do not show the same type of upward slope as the national trend.
Source: Axiometrics Inc.
Based on coverage as of February 2014.
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
200
4
200
5
200
6
200
7
200
8
200
9
201
0
201
1
201
2
201
3
201
4
University of Arizona
0
500
1,000
1,500
2,000
2,500
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
University of Central Florida
0
500
1,000
1,500
2,000
2,500
3,000
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
University of Texas at Austin
0
200
400
600
800
1,000
1,200
1,400
1,600
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
University of Alabama
Where are Students Living?
By-the-bed rentals located off campus are still in the minority. Most students are living in the “other” product.
Sources: Axiometrics Inc., Common Data Sets, IPEDS
Based on coverage as of February 2014.
0
10,000
20,000
30,000
40,000
50,000
60,000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Beds
University of TexasOccupied Beds by Type
Other On Campus Off Campus - By the Bed
0%
20%
40%
60%
80%
100%
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013Share
of
Tota
l B
eds
University of TexasShare of Occupied Beds by Type
Other On Campus Off Campus - By the Bed
0
10,000
20,000
30,000
40,000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Beds
University of AlabamaOccupied Beds by Type
Other On Campus Off Campus - By the Bed
0%
20%
40%
60%
80%
100%
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013Share
of
Tota
l B
eds
University of AlabamaShare of Occupied Beds by Type
Other On Campus Off Campus - By the Bed
POLLING QUESTION
What do you think is the most
critical for the success of
a Student Housing property?
Variance in Pre-lease Rates by University
Each circle represents a property’s rate in February ’14.Why are some properties leaders or laggards?
Source: Axiometrics Inc.
Based on coverage as of February 2014.
Fall 2014 Pre-lease Rates by Distance from Campus
Properties close to campus tend to lease faster, but other factors matter as well.
Source: Axiometrics Inc.
Based on coverage as of February 2014.
0%
20%
40%
60%
80%
100%
0.0 0.5 1.0 1.5 2.0 2.5 3.0
Distance from Campus (Mi)
Feb 2014 Prelease by DistanceFlorida State University
0%
20%
40%
60%
80%
100%
0.0 0.5 1.0 1.5 2.0 2.5 3.0
Distance from Campus (Mi)
Feb 2014 Prelease by DistanceLouisiana State University
0%
20%
40%
60%
80%
100%
0.0 0.5 1.0 1.5 2.0 2.5 3.0
Distance from Campus (Mi)
Feb 2014 Prelease by DistanceTexas A&M University
0%
20%
40%
60%
80%
100%
0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0
Distance from Campus (Mi)
Feb 2014 Prelease by DistanceUniversity of Texas at Austin
What are the Rent Levels at Student Properties?
At Florida State University, the price per bed can range from $300 to more than $1,000 depending on the property and floor plan.
Source: Axiometrics Inc.
Based on effective rent levels collected in January 2014.
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
Off Campus Price Level OptionsFlorida State University - All Floor Plans
The price per bed can range based on factors such as:-Number of beds in the floor plan-Location of property-View of units-Property amenities-Style of property
Price per bed
What are the Rent Levels at Student Properties?
At Florida State University, the price per bed can range from $300 to more than $1,000 depending on the property and floor plan.
Source: Axiometrics Inc.
Based on effective rent levels collected in January 2014.
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
Off Campus Price Level OptionsFlorida State University - All Floor Plans
How deep is the demand pool?How many students in the $700-$800/bed range can afford the next level of product?
Price per bed
How Rent Levels Vary by Distance from Campus
The following charts show the price per bed for four bedroom floor plans. The rent level is plotted by distance from campus.
Source: Axiometrics Inc.
Based on effective rent levels collected in January 2014.
$200
$300
$400
$500
$600
$700
$800
0.0 0.5 1.0 1.5 2.0 2.5 3.0
Distance from Campus (Mi)
Florida State UniversityFour-Bedroom Floor Plans
Effective Rent Per Bed
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
0.0 0.5 1.0 1.5 2.0 2.5 3.0
Distance from Campus (Mi)
University of Texas at AustinFour-Bedroom Floor Plans
Effective Rent Per Bed
How Rent Levels Vary by Age and Distance - National
It is no surprise that newer properties, and those closer to campus, command a premium rent level.
Source: Axiometrics Inc.
Based on effective rent levels collected in January 2014.
The scale has been tightened to remove outliers. Some 4x4 floor
plans average more than $1,000 per bed.
$200
$300
$400
$500
$600
$700
$800
$900
$1,000
1994 1999 2004 2009 2014
Year Built
Price Per Bed by Year BuiltNational - 4x4 Floor Plans
Effective Rent Per Bed
$200
$300
$400
$500
$600
$700
$800
$900
$1,000
0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0
Distance from Campus (Mi)
Price Per Bed by DistanceNational - 4x4 Floor Plans
Effective Rent Per Bed
Effective Rent Growth Performance by Property
Within a university market, rent growth varies by property.
Source: Axiometrics Inc.
Effective rent growth is based on rates collected in from November
2013 to January 2014 compared to the same months the prior year.
-15.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5
Distance from Campus (Mi)
Rent Growth by DistanceFlorida State University
-10%
-5%
0%
5%
10%
0.0 0.5 1.0 1.5 2.0 2.5 3.0
Distance from Campus (Mi)
Rent Growth by DistanceNorth Carolina State University
-10%
-5%
0%
5%
10%
15%
0.0 0.5 1.0 1.5 2.0 2.5 3.0
Distance from Campus (Mi)
Rent Growth by DistanceTexas State University
-10%
-5%
0%
5%
10%
0.0 0.5 1.0 1.5 2.0 2.5 3.0
Distance from Campus (Mi)
Rent Growth by DistanceTexas A&M University
Disclaimer Notice
Disclaimer Notice. All advice, consultations, queries, data and reports (collectively referred to as the “Reports”) provided herein are prepared from data believed reliable without verification or investigation and are not guaranteed or warranted by AXIOMETRICS INC., its directors, officers, employees, and contractors and do not purport to be complete or error free or useful for any purpose. The facts and opinions contained herein are not guaranteed or warranted to be complete or error free or useful for any purpose. The opinions expressed in such information are subject to change without notice. AXIOMETRICS, its directors, officers, employees, and contractors assume no liability for or from its advice, consultations, queries, and reports provided HEREIN. Please use such information at your own risk. This material is the property of Axiometrics, Inc. and may not be reproduced, copied, or otherwise distributed without the explicit written consent of Axiometrics, Inc.
