Poor Economy Doesn’t Slow Student Housing Construction
While many construction projects languish in limbo awaiting the turnaround of the economy, university projects – particularly student housing - continue moving forward.
“The higher education market is going fairly strong because there are only a few markets with money and that market is moving at a fairly strong pace,” Rick Johnson, COO of student housing developer Collegiate Development Services in Irving, told Texas Construction.
“We’re seeing more universities embracing public/private partnerships mainly because of the overall economy. Endowments are down and there is less money for facilities. Student housing is a revenue generator. So, there is an avenue for universities to pay for the project by itself or defray most of the costs,” Johnson added.
Collegiate Development Services recently finished a project at Midwestern State University in Wichita Falls. The university brought the financing through the state of Texas.
“For smaller universities, in particular, the private/public partnership provides a single point of contact. They’re bringing in someone with expertise regarding what students want in today’s market. It does change as time goes on and smaller schools don’t always have that expertise,” Johnson said.
The use of public/private partnerships for student housing is, indeed, growing, added Roger Phillips, vice president of development and acquisition for Campus Living Villages of Houston.
“Speed and cost are the two big reasons,” Phillips told CPE. “Getting state funding may take a while to get approved, so going the public/private route allows the developer to go to the market and finance those projects when you’re ready to do them. With student housing, universities are generating income for the life of that debt. At the end of the term, you can continue to operate debt free or if you want to start over, you have no debt on it.”
While Collegiate Development Construction Services isn’t acting as developer, they have been contracted by Texas A&M University to build new housing with 250 total units plus a resident manager’s unit with an office. TAMU University Apartments will be designed to meet LEED Homes Silver standards. Construction is scheduled to be complete in July.
Campus Living Villages recently completed the Studio Green Delaware in Newark, N.J., immediately west of the University of Delaware. The nearly $6-million repurposing and enhancement of the former Towne Court/Park Place apartments follows the introduction of the first Studio Green in Tallahassee, Fla., and joins a network of 34 Campus Living Villages communities around the country.