High-End Amenities Attract Student ResidentsIf there is a sure bet in the post-recession real estate market, it’s student housing. And there are few places better to build and lease than in the shadow of Michigan State University.
Yet, even with its expanding student population — 49,300 enrolled in the spring of 2014 — and reasonable prices for land and construction, the success of Capstone Collegiate Properties’ new Hannah Lofts & Townhomes is striking.
The 274-unit, 702-bed complex, near Hannah Plaza, just east of Hagadorn Road, started last summer and completed in late-July and August, is completely filled as the school year begins. Other large students housing complexes throughout the region are also filled, especially those with amenities and a mix of living options.
Student housing comes in many forms: old homes in traditional neighborhoods just north of Grand Avenue, on-campus housing, sprawling apartment communities surrounding the campus and pockets of smaller multi-dwelling units in East Lansing, Lansing and Meridian Township.
It’s a fluid market where the newest housing often draws students and the rest of the market adapts, said Vennie Gore, MSU’s Vice President for Auxiliary Enterprises. “My sense is that all pieces on the board get moved around.”
MSU is the single largest provider of student housing. At the start of the fall semester it accommodated 14,500 students in its residential halls with another 1,000 students in University Village and Spartan Village apartments, said Kat Cooper, communications manager for the university’s Residential and Hospitality Services. “When the year opened we had a few students in transition housing,” that is, a “triple” — three students in a room designed for two. Room and board for this year’s freshmen is $9,204.
Cooper said most of those rooming issues have been addressed. But she offered this perspective on student housing “We have 49,000 students. We just cannot house everyone.”
Nor does it need to. As the Hannah development illustrates, developers continue to invest in student housing. It is the fourth project developed in the region by Birmingham, Ala.-based Capstone College Communities, said executive vice president John Acken. “We developed the Lodges of East Lansing, right behind the Hannah Lofts,” Acken said. Capstone sold that housing complex to American Campus Communities. It also developed Abbot Place, north of Lake Lansing Road, which it also sold.
Acken acknowledged that Hannah Lofts sold out unusually quickly. “But it’s unusual to have this quality of a product this close to campus. The unit type also plays a large part. The fact that we have townhouses is unique in the marketplace.”
The Hannah Lofts reflect the trend toward higher-quality student housing. Most of the students there live in three-story, four-bedroom townhouses. The fourth floors have more conventional studio and multi-bedroom units. Annual lease rates are charged individually to the tenants starting at $575 a month and topping out at $1,065 for a one bedroom apartment. Furniture packages for the living room, dining room and bedrooms are charged at a monthly rate of $15 to $25 per person.
The region’s largest private student complex is Chandler Crossings along the northern border of East Lansing. It is owned and operated by WestPac Campus Communities of Santa Barbara, Calif., which purchased the 2,772 beds and 852-unit complex from Pierce Property Management in 2012, said Adam Martin, who manages the Chandler properties, known as The Club, The Villages and The Landing.
WestPac has spent $9 million on upgrades since it acquired Chandler Crossings said Martin, who acknowledges the competitive market for students.
“As new products come along you have to maintain customer service and amenities,” said Martin. At Chandler Crossings these include an indoor swimming pool, an indoor basketball court, tanning, hot tubs, ice skating, a movie theater and a free CATA pass to transport students to campus, about a three mile trip. As of mid-September, Chandler Crossings was 94 percent occupied, Martin said, adding that “leasing doesn’t really stop or slow down until December.”
Chandler has three tiers of properties: Emerald, Spartan and Traditional. Emerald is the elite package with hardwood floors, leather furniture, stainless-steel appliances and a 42-inch flat screen. Spartan is, well, somewhat more Spartan. And traditional lacks hardwood floors and granite counter tops. The top monthly leasing rate is $1,038 for a one bedroom, two bathroom unit in The Villages. At the low end in Chandler Crossings is a room in a four bedroom, two bath traditional apartment for $451 a month. All units in the complex come furnished.
The company continues to expand along its Chandler Road location. “We have just broken ground for construction of The Rocks — 379 beds. It is opening in August next year,” Miller said.
Chandler Crossings’ away-from-campus location has proven popular with Asian students, who according to Martin account for between 15 and 20 percent of occupants. He said WestPac works with referral companies to help Chinese students with the language barrier and understanding of the American life style. For these students, some distance from the often chaotic East Lansing downtown scene, also is an attraction.
More traditional students housing, in houses and smaller apartment complexes in neighborhoods surrounding the campus, is served by companies like Community Resource Management Co. (CRMC) It offers hundreds of housing units, virtually all of which the company said on its web site are leased. CRMC and the other companies that provide student housing already have begun to focus on next year’s leases. Unlike the traditional housing market, where properties turn over through the year, student housing happens all at once. “Everyone with students lease at one time and they turn over (at) one time,” Acken said.