The student housing market across the Midwest is getting more competitive. The secret for developers? As in most things real estate, location is the key to attracting tenants.
Matt Rauenhorst, senior director of real estate development at Opus Development Company, understands this lesson. His company recently wrapped construction of The Station on Washington, a 97-unit six-story student housing complex near the University of Minnesota in Minneapolis.
The Station on Washington boasts several high-end amenities, everything from a club room to a fitness room and private underground parking. There’s also ground-floor retail, with a Walgreens that opened Aug. 15 and a Haiku Sushi that will open sometime this month. But the biggest amenity? The development’s location, as close as a student can get to the university and about 250 feet away from a new stop on Minneapolis’ soon-to-open light rail system.
“It’s a truly advantageous location,” Rauenhorst said. “You can’t get closer to campus than this project. It’s not even possible to be across the street from campus and be closer.”
The light rail system will start running next year. And when it does, residents of The Station on Washington will be able to ride to downtown Minneapolis, downtown St. Paul, Mall of America and the airport.
About 205 students have now moved into the development, one that features 156 bedrooms, some with dual occupancy. The combination of amenities and a prime location — with the location, of course, being the most important — have made The Station on Washington an easy sell, Rauenhorst said.
This is important because student housing, though it is a particularly hot market across the Midwest, is becoming more competitive. Developers are delivering more units on campuses across the country. Students have more options when seeking a place to live.
This is something that Opus is keeping in mind as it develops student housing projects at the University of Wisconsin-Madison in Madison, Wis., and Marquette University in Milwaukee.
Those developers who can’t offer a top location will struggle to attract tenants, Rauenhorst said. He pointed to the University of Minnesota as an example. In the fall of 2014, about 2,000 beds will be delivered to the campus area.
“The supply has caught up to demand,” he said. “It already is a competitive market, but it’s only going to become more so. The best locations are going to win out. Those locations further from campus will struggle.”
