Redefining Res Life for Gen-Y
That the demand for student housing is on
the rise is nothing new. Observers have
been reporting increased college enrollment trends for a number of years now, and
those in the business have taken notice.
What is really notable, say the experts, is the
potential for development and the heightened level of interest from those not previously involved in the segment as a result of
the shift in the acquisitions market, the lack
of many viable alternatives for real estate
investment and growing demographic and
socioeconomic trends in favor of the sector.
“The demand for student housing works
contrary to the economy,” explains Tom
Trubiana, chief investment officer at
Education Realty Trust in Memphis, which
owns, develops and manages student housing properties. “When jobs are tight, more
students go on to college. And with the number of students going on to do post-graduate
work, the demographics and demand for
housing will grow for some time.”
CEL & Associates reports that the US
population of Generation Y, or echo
34 REALESTATEFORUM MAY 2008
Students starting the fall semester at the
University of Texas at Austin are preleasing units
at JPI Student Living’s Jefferson 26. The development, which has 1,026 beds, includes several
green elements including a rooftop garden.
boomers (those born between 1977 and
1996), is about 83 million—nearly as large as
their baby boomer parents. Further, the
New Millennium generation (born in 1997-
2016) already numbers 44. 2 billion, and by
2030 the Los Angeles-based firm estimates
that figure will reach 91.8 million.
CEL notes that annually through 2020,
4. 4 million Americans will turn 18 years of
age, and more than 65% of high school
graduates move on to college. According to
the Washington, DC-based National Center
for Education Statistics, some 20. 4 million
students are expected to be enrolled in post-secondary institutions by 2016, more than
half of them on a full-time basis. That’s up
17% from the nearly 17. 5 million that
enrolled in 2005, the latest data available.
Adding to that is the growing number of
retired people returning to school, notes
CEL’s president and CEO, Christopher Lee,
who says university campuses are tremendous environments for retired baby
boomers. Not all of the apartments built
around campuses, he maintains, will be for
students. “When you combine high enrollments, people staying in college longer,
boomers returning to college, the enormous
amount of endowments that are being used
to redevelop colleges right now, the corporate sponsorship for research—all of those
things drive up the demand for units,” he
says. The communities around colleges will
help to stimulate development as well. “They
want to develop their mini downtowns and
their relationships with the universities.”
With universities only providing 35% of
students’ housing needs, according to CEL,
and with much of the housing that is available old and outdated, experts say that
development opportunities abound. In fact,
the firm anticipates student housing to
account for $15 billion in annual construction costs through 2009.
“A lot of these institutions have housing
that is simply tired and needs to be
