July 21, 2022 |
Updated August 1, 2022
A new normal emerges in student living.
The pandemic has finally been pushed off the front pages as student housing owners, operators, developers and designers eye a nearly normal back-to-school season. Many were forced into reinventing the way they did business in 2020 with the effects lasting through last year. Beyond the acceleration of technological advances, many other aspects of the student housing industry have changed, making a return to the old way of doing things impossible—and probably for the better.
“We are definitely seeing a return to normal in our daily operations, marketing tactics and leasing velocity, but I would call it our ‘new’ normal,” says Lindsay Brown, VP of Leasing for Campus Advantage, based in Austin, Texas. “There are many things that we have decided to continue to practice that were instituted during the height of the pandemic, such as contactless or drive-through move-ins, heightened cleaning protocols and virtual resident events.”
Adapting to pandemic conditions meant less interaction during the actual move and in live events designed to celebrate the process. “We used to be an industry that would have huge move-in themes, parties, different stations for check-in,” says Brown. “It was expected that move-in day would have a line and move a little slow due to all the required steps. The feedback from our demographic, as well as employees, was that they prefer an expedited, fast and easy move-in with all the fun things happening after they have settled in.”
Bigger and Stronger
Facilitating the fast move-in and leasing operations will come in handy, as the data indicates students are coming back in larger numbers than anticipated. Atlanta-based College House, which tracks data in the campus housing market, in June reported that national occupancy for the properties they surveyed showed a 90.54% occupancy rate, which is a 5% year-over-year increase. The national pre-lease numbers were at 80.77%, an increase of nearly 9% year-over-year.
Frederick W. Pierce, President and CEO, Pierce Education Properties, based in San Diego, believes the growth is being spearheaded by the more prestigious and expensive schools. “Enrollment trends continues the story of the haves and the have nots,” he says. “The most selective universities are growing their enrollments in fall 2021 and are expected to continue to do so in fall 2022. With a pending recession on the horizon, graduate programs should grow even more. The hardest hit by COVID have been the community colleges, which reflect typically lower income and more at-risk college students, are down 15.1 percent the last two years.”
Casey Petersen, COO, PeakMade Real Estate, based in Atlanta, is looking at the same kind of numbers. “Going into fall of 2022, we see student housing across the country performing at its highest levels in years – including pre-COVID,” he says. “Since the beginning of the leasing season for this fall, we have seen very strong leasing velocity, to the point at which we’re now 10-15 percent ahead of our pre-COVID numbers. We believe the increased velocity across the sector will result in strong rental rate growth for 2022 and a good foundation going into the fall 2023 lease-up.”
Online Learning Takes a Hit
Early in the pandemic, doubts were raised about the need for campus housing and the whole concept of going away to college. Video proponents heralded a new era in learning, but as it turns out, nobody likes it. A survey conducted in 2020 by SimpsonScarborough, a higher education branding firm based in Alexandria, Va., showed that 97% of college students were forced to make the switch to online learning, but only 5% said it was a better way to learn while 63% said it was “worse” or “a lot worse.”
The learning via Zoom model has not lived up to the hype. “I think there will always be a need for the human element when it comes to learning,” says Brown. “There are a lot of distractions in a virtual learning environment that cause objectives to be missed. There should be a good balance of digital and in-person to be most effective.”
Says Petersen, “We believe that the pandemic effectively closed the book on the argument that online education was a threat to the traditional university experience, and by extension, a threat to the off-campus student housing industry. Throughout the pandemic, we saw very strong demand for students to return to campus – even when their classes were being administered virtually.”
The lure of virtual tours also has limitations. A study of parents and students conducted by Maguire Associates, a higher education consulting firm based in Concord, Mass., reported 90% of students and parents had their college search process impacted by the cancellation of live events. The same survey shows that information about dorms and housing held the highest level of interest for students wanting to learn more after a virtual tour. Only 36% preferred to do dorm tours via streaming.
The way campus housing buildings work and had to adapt during the pandemic remains an area of re-focus for architects and designers. “The campus of 2025 will continue to feature more innovative teaching spaces that push pedagogical concepts and allow for experimentation,” says Carisima Koenig, Principal, College and University Practice Leader, Perkins Eastman, based in New York.
“Spaces will need to be more than just flexible—they will need to be hackable and multimodal, capable of readily supporting different types of pedagogies with minimal setup time,” she says. “Furthermore, rather than be driven by technology, multimedia needs will likely serve as an adjunct and expander of the learning experience.”
Improving ventilation and air circulation is also tasking designers with improving indoor-outdoor relationships. “The pandemic has pushed housing design to make outdoor access a priority and further, has encouraged fewer specialized amenity rooms that may have limited uses—in favor of more open and adaptable spaces,” says Amy Cheever, Principal and Live Studio Director of Strategy at Cuningham, a design firm with multiple locations.
“One of our current projects is a luxury student housing community in Minneapolis that incorporates four-season outdoor spa/lounge areas, grilling stations and artificial turf. Other amenities that exhibit these outdoor elements include ample bike parking and various energy and pedestrian enhancements.”
The new way of thinking goes from the luxury amenities down to the more practical concerns facing other commercial real estate including offices. “A deepened awareness of how communicable illnesses spread has further pushed designers and developers to consider implementing bathrooms per individual suite or room, rather than communal restrooms serving entire buildings or floors,” says Cheever.
“This layout will help to alleviate the everyday cleaning and operations that typically go into these more in tandem restrooms. This ultimately leads to fewer people using the same facilities and less staff needed to clean and sanitize a given space efficiently.”
The student housing industry appears to have emerged from the pandemic with strengthened immunity to market forces that seemed to be plotting its demise. Some of the challenges the industry faced during the dark days were not the ones that easily come to mind. “Adapting to ever-changing
CDC guidelines and communicating those to our residents including closing of property offices, converting to completely online leasing, closing and later scheduling amenities and altering method of package delivery,” says Pierce.
“We held regular meetings with senior executives to develop those protocols and then communicate to the properties in our portfolio. Secondly, communicating to the industry – investors and lenders – how resilient the student housing sector was and continues to be during the pandemic and how strong leasing, occupancy and collections have been.”
Before the pandemic bloomed, the labor shortage generated a great deal of attention. From an owner-operator’s point of view, the issue has never gone away. “Coming out of the pandemic, the biggest challenge for businesses in general has been attracting and retaining the best people,” says Petersen. “Since our inception, Peak has invested heavily in building a strong culture and our reputation as a best-in-class employer. Those investments have proven to have been very wise as the competition for talent has gotten tougher.”
During the dark days, mothers of students and mothers who happened to be working in the industry all struggled. “We tried remote teams, centralized teams, pretty much anything you can think of to help our sites make it through,” says Brown. “I feel like the pandemic hit mothers really hard with the lack of child care available and our managers in this industry are predominately women, so it was crucial we find ways to support them during that time.”
If the pandemic has not officially reached endemic stage yet, the send of near normal can’t be denied. “It does seem like things are mostly back to normal in higher education, much like most of society,” says Pierce. “The clearest sign in society is the elimination of masking requirements on planes, in airports and in most public places. For most universities, the on-campus housing is back to pre-pandemic levels of full occupancy. With testing and vaccinations readily available for students, faculty and staff, students generally feel safe and are ready to be back to school. They want to be away from home and with their friends.”
Scott Sowers is a freelance contributor to units Magazine.