Prior to the start of the COVID-19 pandemic, student housing development was moving forward at a fast clip. This was particularly seen in the public-private partnership development (P3) segment, which has been growing in popularity year by year as universities and colleges look to private developers to modernize their housing stock without dipping into the institution’s budget.
Last week, Student Housing Business hosted a complimentary webinar during which Patrick Martin of Louisiana State University, Matt Dull of Appalachian State, Andrew Christ of New Jersey Institute of Technology and moderators Jeremy Doss and Courtney Gordon of RISE discussed the background and creation of their P3 partnerships, as well as best practices, new opportunities and challenges that have been introduced since the start of the pandemic.
“Being in an active construction phase of our public-private partnership, it has been important to have a contractor that is able to quickly adapt the construction site depending on what the environment looks like on a day-to-day basis due to COVID-19,” said Dull. “Choate Construction is our contractor and they have developed a protocol for what a site should look like in terms of temperature monitoring and screening questionnaires as people enter the construction site. Ongoing walk-throughs monitoring social distancing and mask wearing are also important.”
“The timing of recently adding 900 modernized beds has really helped us to de-densify campus,” continued Dull. “Most of our housing stock before was primarily traditional, dormitory-style units with double occupancy and a group of students sharing a common bathroom. Our P3 beds are coming on just in time and we can tell that by our occupancy, which is over 95 percent in those buildings compared to about 83 percent for the rest of our housing stock. These units are in high demand because they offer a mix of suite- and apartment-style space. We are planning on closing on our third phase of development in December. In a difficult time like COVID, having the flexibility that one gets from a P3 has made so many of our decisions easy to manage.”
“We are very conscious of the capital markets situation,” said Christ of the New Jersey Institute of Technology. “As we’re moving through the design process on our current project, it was important for us to continue through COVID-19 because we wanted to provide the least dense product that we possibly could and get it online as soon as we possibly could. The P3 initially attracted us because of the benefit of the ability to adapt and the importance of that ability is now an understatement. When you look at all that has happened over the last few months and the process we went through to procure our partner, we persevered right through the heart of the pandemic.”
“It’s a challenging time for universities as a whole right now and COVID-19 is really just exacerbating a problem that universities already faced — enrollment uncertainty” says Martin. “On the one hand, everyone is focused on the total cost of attendance and you have to publish score sheets explaining what it really costs to go to your school. Everyone is looking for a low number, but when we’re talking to students and parents about what actually makes them choose a university, the quality of the housing and amenities that are offered — and I don’t mean fancy add-on’s like lazy rivers, but solid construction and private bathrooms — are really influencing enrollment decisions. You need to provide that quality, which costs a bit more, in order to keep enrollment up. One of the advantages of the P3 model is that it allows us to be more nimble and flexible while pushing those decisions down a little bit later.”
Webinar sponsor: RISE: A Real Estate Company has 25+ years of proven student housing and multifamily real estate development experience. They create value for their clients while minimizing risk. A national leader in customized campus development with over 80 projects in 24 states, totaling over 52,000 beds and $3 billion in value. RISE brings its higher ed partners’ visions into reality through a single, turnkey process that delivers on-budget and on-time.