The Real Deal Chicago

Has student housing grown up?

Developers are adding luxury amenities like gyms, coffee shops and pools
April 12, 2018 02:00PM

A peek inside student housing at Latitude (Credit: LiveLatitude, State Farm via Flickr)

Student housing could be coming of age.

Developers of student housing have seized on offering amenities and convenience to maximize returns.

That’s meant a preference for building closer to campuses or in urban areas, where there’s less space and land might trade at more of a premium.

“I feel like most developers would rather do a 250- to 300-bed project right on top of campus rather than 500+ beds even a half mile off,” Ryan Tobias, a partner at Triad Real Estate Partners, which focuses on student housing development, told RE Journals.

Developers have been adding amenities to try that blur the line between students and everybody else. Common examples would be a retail space like a fitness center or a coffee shop that’s open to the public but also serves as an amenity for students living in the building, Tobias said.

“They are open to the public as a retail space but also open out to the lobby/common areas of the apartment space,” Tobias said. “So it becomes a win-win for everybody. It’s a retail tenant but also a building amenity.”

And where there’s more space to build and enough demand from affluent students, developers are going all out.

Latitude, a complex that opened in 2016 just off the University of Illinois campus in Urbana-Champaign, even has a CrossFit gym, game rooms and an outdoor pool.

Student housing in the United States has become profitable enough that foreign investors are noticing — and jumping in. According to RE Journals, nearly half of all student housing investments in the United States in 2017 came from outside the country. [RE Journals] –Scott Klocksin