A recent announcement by the Texas A&M University Corps of Cadets has the rapt attention of developers, as they take another look at the state of student housing on college campuses everywhere. The land-grant university made news when it needed a new law passed by the 83rd Texas Legislature to enable a private developer to come in and build new dormitories for the Corps, whose dormitories had gone nearly untouched since they were built in 1939.
Ownership of the new dorms will stay with the university, but by funding the estimated $225 million housing development, private investors will effectively lease the land on which the dorms are built. They will then recoup their investment and realize a profit with a lease on the buildings that will be written into a 30-year bond. It’s a public-private partnership that could pave the way for similar opportunities at other universities with student housing options that are aging rapidly and aren’t plentiful enough to meet projected demand.
Universities are also keenly aware that housing availability and affordability is a deciding factor for 70 percent of new college students who live on-campus, and nearly 75 percent of graduate and professional students, many of whom eschew traditional and outdated campus dorms for off-campus rentals. Those rentals in university towns, however, are hard to come by and often substandard. With university populations projected to grow 10 percent each year through 2016, both on- and off-campus housing need a serious revamp to meet student needs and their growing demand for better housing and amenities.
Both public and private investors are poised to step up their acquisitions and development of off-campus student housing, and with Texas A&M’s lease strategy leading the way, competition for public-private partnerships to build and renovate on-campus housing is bound to become more heated, as well. Watch for more discussion and predictions at the National Multifamily Housing Council Student Housing Conference and Exposition coming to Chicago.
If keeping up with the latest investment and development opportunities within the multifamily housing arena is taking up too much of your valuable time, partner with Class A Management—the people who already know property management and will keep you updated on the latest developments that affect you. Call us today at 817-295-5959 or e-mail us at info@classamgmt.com.