Student housing is a big business with relentless demand, but scale doesn’t equal simplicity — especially in a sector where investor competition is fierce and resident expectations evolve rapidly. As purpose-built student housing continues to thrive, multifamily developers are increasingly seeing the sector as fertile ground for growth. But transitioning from traditional multifamily to large-scale student housing development (800 to 1,000-plus beds) takes more specialized expertise than you may think.
A successful push into student housing hinges on understanding the sector’s nuances — not just at a broad level but throughout the full development lifecycle. For example, you’ll need to balance accelerated leasing timelines with the need for specialized amenities and community-centric design. Meanwhile, interest rates and construction costs pose challenges across all real estate sectors, and even a resilient asset class like student housing is not immune to macroeconomic headwinds.
If student housing development is on your horizon, there are strategies you can take to mitigate common pitfalls, optimize pre-development planning and achieve operational success in this highly competitive — but potentially rewarding — market.
Mitigate Planning Pitfalls
Delivering a large-scale student housing project poses unique challenges. Unlike traditional multifamily developments where there may be room for flexibility in the timeline if the project encounters unforeseen delays, if you miss the August move-in date, you’re likely to rack up significant costs on intermediary solutions for students arriving on campus. This leads to increased project costs as time goes on, along with tense situations with the university and a very unhappy client.
One of the biggest mistakes encountered in the student housing development space happens when the contractor’s delivery deadline is scheduled for August 1, assuming students could move in by August 15. The reality is, projects need to aim for an end of May/June completion or even well before that to leave time to work out any challenges or inevitable problems that arise during the inspection process.
Construction logistics are another item that should not be overlooked during the pre-planning phase. Simple things like a construction elevator or hoist location can throw off your timeline. For example, if a contractor doesn’t account for the construction elevator’s placement, it may affect completion of a tier of units on all floors and the whole project timeline can easily be impacted. Discussing and agreeing upon a construction schedule that includes placement logic early in the planning process is critical to ensuring these final units are completed on time and don’t impact overall building delivery.
Optimize Before Shovels are in the Ground
Successful pre-development planning depends on thorough scheduling and logistics management. It is best to engage with local contractors who understand the market and have established relationships with subcontractors and building inspectors. Together, you can bring logistics project planning into the strategy from the get-go to evaluate construction types and strategies and incorporate a model unit early in the process to address regulatory concerns, along with general quality expectations between the contractor, architect and developer.
Before breaking ground, it’s important to secure a detailed construction schedule from the contractor that outlines project duration and aligns with your approval timeline. For student housing projects, falling behind could push the timeline by an entire year. Controlling the project start date is crucial to adhering to project timelines because accepting a delayed start can easily snowball in such a way that puts the job in jeopardy early in the construction process.
Too often, developers rely on contractors who claim familiarity with local regulations but aren’t as deeply embedded in the city operations as they say. As every local government operates differently, it’s critical to sit down with inspectors and city officials early to clarify the sign-off process and identify key personnel, so you can address potential issues before they arise. For example, city inspections rarely go as planned, so it’s essential to engage the appropriate city officials early on to efficiently navigate inspection requirements and approval processes in a timely and efficient matter. This is especially important for out-of-town developers and contractors looking to establish local relationships.
Ensure Operational Success
Success in student housing delivery comes down to managing scale and complexity. For large-scale projects with 1,000 to 2,000 beds, coordination is key to keeping everything on track. One strategy is to establish a punch list process with your general contractor (GC). Every GC has different expectations and workflows, so aligning early and walking through the first model unit together, marking necessary adjustments and setting clear standards for what’s acceptable helps the entire process run smoothly and avoids rework or misunderstandings. Including the building operations team in the beginning of this handoff phase is also critical to all parties being on the same page.
Don’t overlook furniture installation in planning either — it’s more complex than meets the eye as different cities have varying requirements. Some mandate an active fire alarm system before moving furniture in, while others require full building sign-off. For instance, in a 600- to 800-bed building, furniture installation can take up to a month, while a 2,200-bed building may require up to two months. Communication with other core stakeholders to ensure everyone understands the conditions and can coordinate things like access to elevators and working around other trades is key to the success of furniture installation
Seize Student Housing Opportunity
Ultimately, developers looking to succeed in the student housing market must get up to speed on its unique quirks, such as the accelerated timelines that come with an academic calendar. This means understanding requirements for student housing development not just at one stage, but at every stage of the project lifecycle.
By focusing on early planning, collaborative strategies and meticulously managed logistics, developers can avoid common pitfalls and achieve delivery success in this exciting sector.
—Brad Moeller, Vice President at Project Management Advisors Inc.