Interface Student Housing Conference Recap

A few of our student housing experts attended the Interface Student Housing Conference in Austin, TX, at the beginning of April. As one of the largest events of the year for the industry, it was well-attended and replete with current information about market and design trends. Some takeaways follow:

Mark Mitchell, Director of Commercial & Hospitality Design – Charlotte, NC

Along with terrific sessions, the informal networking opportunities at this year’s event were very engaging. It seemed like everyone was interested in talking about potential deals, with most feeling optimistic about the future of student housing. Interface brings together all the major players, so our design team was able to connect with developers, operators, financiers and others all in one place.

This year I joined a panel to discuss design considerations for operators and developers. It was an excellent group of design professionals, and we covered a range of topics, starting with our favorite design tool. I immediately talked about BSB Design’s unique charette process and how it enables strategic collaboration among all key stakeholders. The ability to lay out issues, provide solutions and create the visual in such short time really addresses a hot button for student housing. It’s so imperative for developers to hit that lease-up window; otherwise, they forfeit an entire year and risk massive cost overruns. Gaining efficiency in order to stay on time is valuable in all project types, but nowhere is it more important than student housing.

We also covered renter demographics and the new importance of branding for Generation Z, who are much more visual than previous generations. Facility design, service/operator and branding have become essential elements of the “three-legged stool” that creates an identity for each new project. Gen Z has grown up creating their personal brands, so they look to align it with an authentic experience where they choose to live. This means unpolished, less contrived elements can go a long way toward building your brand, which you must carefully script to make sure it feels unscripted.

Our panel spent plenty of time discussing amenities, which remain an important component of any student housing project design. Multi-functional, multi-use and minimalistic were common themes in the new amenity design space. Common areas are evolving, like fitness centers that offer large open space to accommodate yoga, cycling class, group parties, or a building gift exchange. Consider the variety of social interaction these public amenity areas might support and design to those. Then balance that openness with insulated space in more specific, individualized amenity areas (think study pod).

We’re starting to see a more concerted effort for colleges and universities to collaborate with off-campus or edge of campus housing through sponsored study areas, group conference rooms, or even e-learning suites. Some host off-site classroom time with visiting professors. All of these potential interactions should be part of the conceptual design to ensure each new project is flexible enough to meet the new demands of the student renter.

And by the way, we’ve created monsters there. Our student housing projects have become so amazing and now offer such spectacular unit design and amenity areas that our friends in the market housing multifamily space are dealing with the backlash. Expectations from new renters have reached new heights thanks to the bar set by student housing projects. While that’s not necessarily a bad thing, it has perpetuated the amenity war and made higher-end market rate rentals much more competitive in college towns across the country.

Teresa Bateman, Director of Architecture Development – Chicago, IL

This was my first time attending the Interface Student Housing Conference, so I was pleasantly surprised to run into a few long-time industry friends among the record number of attendees. It’s proof that this segment is no different than others in the construction industry: small and connected, so relationships matter. I had the chance to meet with several prospective and current clients, and that alone was well worth the event dues. I’d highly recommend attending next year.

Student housing is a relatively new area of expertise for me, so I fully enjoyed the seminars and presentations I attended, including the general sessions and keynotes. Everyone was optimistic and presented a shared confidence in the strength of the student housing market. Hassam Nadji, CEO of Marcus & Millchap, coined this the “Dawn of Capital” for the multifamily sector, especially student housing, and this includes core, ground-up and value-add. By the number of investor groups I saw during the week, I have to agree with Mr. Nadji!

One panel of industry experts discussed a range of topics, and a few stood out to me. First, they all agreed that student housing is a great sector to be in during the impending recession. That sentiment must be held by many in the industry, because edge of campus deals are harder to find (90% of deals are ½ mile or more from campus). The panel stressed that an urban aesthetic is preferred over garden/suburban style and that projects with fewer than 500 beds are becoming harder to pencil, so they recommend 800 to 1000 beds for larger parcels.

Every industry discusses innovation, and for this panel, shifting the design to entice renters to stay for more than 1 year was of primary concern. After freshman year, open market opportunities are getting more and more competitive. As architects, we can play a crucial role in finding ways to make this design shift effectively, providing lifestyle-driven unit plans that interact with great amenity spaces so students aren’t inclined to seek housing elsewhere.

Mark Mitchell’s panel was enlightening as well. Since he summarized above, I’ll just share one additional design consideration from that discussion. The designers are compelled to create something called “social collisions” in each building, which are basically organic (but contrived) moments of social interaction among residents where they are sort of forced to work things out. In the dormitory world, shared bathroom cores accomplished this out of pure necessity. In the purpose-built student housing world, designers are seeking ways to enable that kind of socialization because it actually adds to the personal growth of the individuals living there.

 

John Abisch, Principal – Charlotte, NC

As a regular attendee to Interface conferences, I look forward to networking with my colleagues in the industry. This year, I paid particular attention to the economic outlook forecasts and general market sentiment shared by some of the largest developers and operators in the country. Attendees had access to some high-caliber expertise during general sessions and other seminars.

One key takeway I keep hearing about at every conference is the concept of “unlocking the value of a site”. With so many developers considering so many different land deals, and each of them using their own method to vet potential profitability, finding project team members and consultants who can streamline this process can pay huge dividends. Great student housing projects start with conceptual analyses that paint a clear picture of the site’s potential. Without that picture, the project development process risks becoming a bit of a guessing game.

Design and architecture have a massive impact on the potential value of the total project. Sure, I’m definitely biased about this, but I’ve also seen it play out time and again in projects across the country. While many developers expect a free site study from an architect to minimize the pursuit costs, I’ve seen developers unlock much greater value by spending money for an architect to conduct a true site study. The zoning and planning nuances they can uncover are often unseen during a quick (free) study. As architects, we need to do a better job proving our expertise and illustrating how that design experience relates to success so our developer clients see that value.

Building a student housing project, like all construction, is a financial strategy. BSB Design has been fortunate to work with some of the largest student housing developers and operators in the industry, and we’ve learned a lot about the management and financial sides of each project. This back of house expertise goes a long way during the conceptual stage. Ultimately, when the entire project team is focused on the financial success of the project, all parties win in the end.