The days where university students live in glorified shoe boxes are gone. Today they can choose from student housing that boasts amenities usually associated with high-end luxury apartments.
“Twenty five years ago, amenities—if a community even had them—were relegated to basements without windows where students could watch a movie,” said JJ Smith, president of CA Student Living, a company that invests, develops and manages student housing assets.
Dorms on campuses are becoming increasingly modern and now focus on providing inviting, communal spaces. An example of this is the University of Chicago’s new Campus North Residential Commons, which opened in September.
The Studio Gang-designed facility at 55th Street and University Avenue supports 800 undergraduates in eight different houses. These residence halls aren’t restricted to freshman; students of every year live there. The modern housing has dining and retail options plus gardens, courtyards and open three-level communal hubs for studying, cooking or relaxing. There are also private rooms and kitchen facilities for students who want a more independent experience.
Before Campus North opened, Michael Higgins, an HFF associate director, helped the university sell off decades-old properties and three outdated residence halls. He said working with a university in this way was a unique situation. Many schools can’t afford to build new housing because of budget constraints, so they look to the private companies.
One of those companies is CA Student Living, and looking ahead Smith thinks newly constructed properties will have strong occupancy and growth.
“We will likely see 40,000 to 45,000 beds delivered nationwide over the next two to three years and we plan to deliver 3,500 and 4,500 beds each year through 2020. While that figure is down from a high of 60,000 in 2014 and 2015, there is a healthy supply in the pipeline that will likely be absorbed quickly,” Smith said.
In 2015, CA Student Living opened Chicago Infinite and Arc at Old Colony to more than 58,000 students in the Loop. The former office buildings at 28 E. Jackson Blvd. and 37 W. Van Buren St. are near at least 22 universities in downtown Chicago. They offer students amenities like free wifi and cable, a landscaped rooftop with fire pits and grills, a 24-hour gym, an on-site coffee shop and a club and lounge room. The fully-furnished, modern apartments range from studios to four-bedrooms, and most come with an in-unit washer and dryer, a 50-inch flat screen TV, hardwood-style floors, stainless steel appliances and quartz countertops.
“While creating a community is paramount, there’s also a renewed focus on well-being with indoor fitness centers and open, airy spaces such as balconies and outdoor decks,” Smith said.
However, Midwest university markets are playing catch-up to the south and west, Smith added. In those regions, available land plus a boost in college enrollment led to growth and lots of competition in the sector.
“Now, those same developers are seeking opportunities in the Midwest, but land tends to be ‘generationally’ owned and more difficult to attain. Developers need to get creative in land acquisitions and development plans,” Smith said.
Many developers aren’t limiting themselves to undergraduate students. They are targeting a wider range of tenants including graduate students, law students, medical students and recent graduates.
Scion Student Communities, which owns and operates more than 48,000 beds in campus markets, recently made a $1.6 billion purchase of three student housing portfolios across the country. In Chicago they operate 1237 West, which sits right next to DePaul’s campus at 1237 W. Fullerton. Previously, the property was exclusively for DePaul students, but now owned by Scion, it is open to all students and Lincoln Park residents.
Two more projects aimed at young professionals have popped up near the Illinois Medical District and University of Illinois at Chicago. PMG’s U apartments at 1350 S. Union and Related Midwest’s Landmark West Loop at 1035 W. Van Buren both focus on high-end amenities and creating a sense of community.
At Landmark, that means going above and beyond “a bunch of couches and TVs,” said vice president of Related Midwest Mike Ellch. A feature amenity, called the Living Library, is designed to have the atmosphere of a coffee shop. The 9-foot ceilings, fireplace with copper finishes and lots of natural light gives residents a place to work and socialize.
“We love having a group of diverse residents. We don’t market strictly to one type of person because this is a space where everyone can learn from each other. We want to foster a community in this building,” Ellch said.
Overall, student housing has experienced incredible changes in amenities and options beyond university-owned housing. Investment sales in the sector have also been “historic and unprecedented,” according to Peter Katz, an executive director of Institutional Property Advisors, a division of Marcus & Millichap.
Smith also noted that luxury, lifestyle-oriented residences can be the tipping point for incoming freshman and transfer students.
“Studies show that housing accommodations are one of the top three factors that influence a student’s enrollment decision, so a university must make sure its housing stock is in lock-step with the needs of today’s students,” Smith said.