UNIVERSITY OF MARYLAND COLLEGE PARK June...
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UNIVERSITY OF MARYLAND COLLEGE PARK STUDENT HOUSING MARKET ANALYSIS June 2017
Transcript of UNIVERSITY OF MARYLAND COLLEGE PARK June...
UNIVERSITY OF MARYLAND COLLEGE PARK
S T U D E N T H O U S I N G M AR K E T AN ALY S I S
J u n e 2 0 1 7
Presenter
Presentation Notes
This past fall the Division of Student Affairs hired Brailsford and Dunlavey - one of the premiere firms in financial analysis and housing planning – Major goal: To conduct a Student Housing Market Study� Our previous housing market study was conducted over 5 years ago, in 2011 It resulted in first ever Housing Strategic Plan, completed in 2014.� But in the last 5 years a number of significant changes have occurred both on and off campus- For example, the building of Prince Frederick Hall and Terrapin Row The question consistently arises with all of these new beds near campus- Do we need to build any new housing on campus? The answer is YES. This presentation describes the methodology and analysis Brailsford and Dunlavey conducted which resulted in the answer that Yes, we need to build new housing on our campus. We also asked “B&D” to share with us their initial thoughts on a potential update to our 2014 Housing Strategic Plan as we look forward to acting on this housing market study.
AGENDA J u n e 2 0 1 7
Planning Process 1 Underpinnings & Implications 2
Next Steps 4 5
Recommendations 3
Presenter
Presentation Notes
This is the outline for the presentation today
PLANNING PROCESS P R O J E C T O B J E C T I V E S
Quantify unmet demand for undergraduate on-campus housing
Identify off-campus market dynamics that will impact the UMD housing system
Understand the demand for Fraternity and Sorority housing and recommend a program that satisfies their need
In the context of the 2014 Housing Master Plan, provide recommendations that allow UMD to position its housing assets to satisfy housing demand and have the greatest impact on the advancement of the University
Presenter
Presentation Notes
Again, the charge for B&D was to� Quantify the unmet demand for on-campus student housing� Look at the housing market locally that is impacting us� We also asked them to consider demand for the fraternity and sorority houses� And finally,� We asked them to give us their initial thoughts about a plan for moving forward
Demographic Analysis
Strategic Asset Valuation
Off-Campus Analysis Focus Groups (60+ Participants)
Student / Parent / House Corp. Survey (Over 3,100 respondents)
Existing Conditions Analysis
Demand Analysis Financial Analysis
Project Definition & Housing Strategy
PLANNING PROCESS S T U D E N T H O U S I N G M A R K E T A N A L Y S I S
Presenter
Presentation Notes
5 Focus Groups 60+ Participants 3,115 Survey Respondents 26% Capture Rate 1.5% Margin of Error
PLANNING PROCESS S T U D E N T H O U S I N G P L A N N I N G
Get the Asset Right
Acquire Capital Advantageously
Operate to Maximize Institutional Interest
PLANNING PROCESS S T R A T E G I C A S S E T V A L U E A N A L Y S I S C R I T E R I A
Inclusion • Housing for all first and second-year
students, and transfer students • Housing for all fraternity and sororities
who desire to have a chapter house
Curriculum Enhancement • Direct integration of living-learning
programs • Enhanced & increased living-learning
programs • Housing continuum discipline
Market Responsive • Unit mix • Competitive amenities • Differential pricing • Housing market supplement
Financially Prudent • Occupancy Coverage Ratio (OCR)
increases with age • Debt Coverage Ratio (DCR) 1.0:1 to 1.2:1 • Public-private partnerships (P3’s) should
be considered where appropriate
Presenter
Presentation Notes
SAV Criteria- filters in which analyze data & develop recommendations Supplementing off campus market with product off campus real estate developers do not provide Mechanism that applied to student demand by classification to mitigate risk Financially self-sustainable P3s- UL
UNDERPINNINGS & IMPLICATIONS
UNDERPINNINGS & IMPLICATIONS T H E U M D R E S I D E N T L I F E S T O R Y
Undergraduate Enrollment has grown 13% since 2007
Academic profile of students has
increased
Campus Housing is an integral component of the UMD Experience for 1st and 2nd year students
Off-campus market does not fully meet
students needs
Housing has been 100%+ occupied with an average
waiting list of 538 since 2012
Significant demand for additional housing
Active off-campus market targeting
UMD students with an additional 500+
units under construction
Students’ housing decision is driven by proximity to classes, cost, and a quiet environment.
Unmet Demand for 1,400 beds
UMD needs to develop housing that aligns with
market demand in a multiphase program
2014 Housing Master Plan Demo. + Reno. decreases bed count by 1,894
Presenter
Presentation Notes
Campus housing is an integral component of the UMD student experience. Housing has maintained 100%+ occupancy and an average waiting list of 538 students since 2012. The dynamic off-campus market continues to grow with 550+ new units under development. Average monthly per student rental rates range from $798 to $1,522 with an average of $1,140. Despite changing expectations, demand for 1,400 beds exists for on-campus housing beyond the second year. Only 39% of off campus students / 16% of all indicated “would prefer to live off campus” in DBP
UNDERPINNINGS & IMPLICATIONS D E M O G R A P H I C A N A L Y S I S
28,462 Total undergraduate
enrollment for fall 2016
Demographic data provided by University of Maryland
12% Increase in transfers since 2007 13% Increase in
undergraduates since 2007
94% Five year average
freshman retention rate (Increase of 3%)
85% Average six year graduation rate
(increase of 5%)
4.20 Avg. incoming first year student high school GPA
(Increase of 5%)
Presenter
Presentation Notes
Student profile continues to increase. �Today’s students prefer a robust residential experience that supplements their academics.
UNDERPINNINGS & IMPLICATIONS I M P O R T A N C E O F R E S I D E N T L I F E & S A T I S F A C T I O N
On-campus satisfaction is impacted by the aging facilities while off-campus satisfaction is impacted by the lack of community and residential experience.
67% Housing was an
important factor in decision to attend UMD
74% Of Respondents
indicated on-campus housing was at
least satisfactory when compared to
other institutions
Presenter
Presentation Notes
Increase in academic profile leads to increase in campus and housing expectation
88% Helped me adjust to life at UMD
76%
Made it easier to be involved in campus life
Provided me with a safe, secure environment
Provided me a sense of community
71% Provided me with convenient living options near classrooms
70%
Made me feel like a Terp 66%
Enhanced my overall experience
64% Provided me with opportunities to get involved
60% Had a positive influence on my academic performance
Living on campus…
81% Introduced me to new friends
76%
75%
60+ Number of Engaged
Students who Believed Housing was Enough of a Priority to Attend a Focus
Group Session
“I wish housing was available all four years”
-Student Survey Comment
“I would have loved to live on campus this year, but I was waitlisted for housing and not offered housing until after I signed my
lease.” -Student Survey
Comment
UNDERPINNINGS & IMPLICATIONS I M P O R T A N C E O F R E S I D E N T L I F E & S A T I S F A C T I O N
Presenter
Presentation Notes
What statements do you agree with – On Campus Q7
UNDERPINNINGS & IMPLICATIONS
Living Learning Programs are key to the UMD residential experience
Satisfaction
I M P O R T A N C E O F R E S I D E N T L I F E & S A T I S F A C T I O N
programmanagers.com
UNDERPINNINGS & IMPLICATIONS H O U S I N G S A T I S F A C T I O N
74% Of on-campus residents are satisfied with their living conditions
Satisfaction Level of Factors
for Students Living on Campus
64% Size of Unit
61% Proximity to UMD Amenities 70%
Physical Condition 67%
Size of Bedroom
67% Access to Fitness Facilities
77%
Total Cost of Rent + Utilities
39%
Proximity to UMD Campus
87%
82%
81%
79%
77%
62%
Cambridge
Leonardtown
South Hill
Denton
Ellicot
North Hill
Satisfaction Level of Students Living on Campus by Community
Presenter
Presentation Notes
Group by community. Took average per community
programmanagers.com
UNDERPINNINGS & IMPLICATIONS F R A T E R N I T Y & S O R O R I T Y L I F E
93% Sense of Community
85% Safe and Secure Environment
83% Enhanced Overall Experience at UMD
Introduced Me to New Friends
Living in a Chapter House Provided…
74%
69%
Provided Opportunities for Leadership Development
Cost Effective Living Option
80%
Presenter
Presentation Notes
On Campus- Adjust to life at UMD, meet new friends, easier to be involved in campus life, safe secure environment P3 – Adjust to Life at UMD, Introduced me to new friends, easier to be involved in campus life, convenient living option, safe secure environment
programmanagers.com
UNDERPINNINGS & IMPLICATIONS E X I S T I N G H O U S I N G P O R T F O L I O
7 Residential Communities
9,475 UMD Owned Beds
2,899 P3 Beds
1,272 F&SL Beds
Denton Community Ellicott
Community Cambridge Community
North Hill Community
South Hill Community
South Campus
Commons Graham Crackers
Fraternity Row
Dining/Community Facilities Traditional Semi-Suite Full-Suite Suite / Apartment Apartment Fraternity & Sorority
Presenter
Presentation Notes
Reno 12/45 = 27%, almost 1/3rd House all freshmen in traditional- all sophs in suites / apartments Create neighborhoods by classification - Diversity of neighborhoods
UNDERPINNINGS & IMPLICATIONS
Gross Square Feet Residential: 3.5M Non-Residential: 10.8M
Average Building Age Residential: 57 Non-Residential: 41
Average Building Renovation Residential: 24 Non-Residential: 26
New Construction Value* Residential: $170M Non-Residential: $198M * New Construction value is replacement cost
E X I S T I N G H O U S I N G P O R T F O L I O
UNDERPINNINGS & IMPLICATIONS E X I S T I N G H O U S I N G P O R T F O L I O
Campus housing is an integral component of the UMD student experience.
Students’ awareness of functional obsolescence of UMD housing facilities presents a potential occupancy risk for the future.
The dynamic off-campus market is influencing students’ housing preferences and expectations.
Many halls need to be remodeled, they are so old, and bathrooms are ugly and disgusting… Also air conditioning during the summer would be a nice addition… This dorm has potential of being really nice because it's in a nice location on south campus, but since it's so old it's hardly pleasant.
“
”
Current dorms, while livable, are below par. The price is high for living in conditions that are cramped, and old. Renovation/new buildings would greatly improve this problem.
“ ”
My experience overall with housing on campus is that it was fairly poor (low quality, broken elevators, old buildings - bad AC) and expensive. When something is more expensive you expect a certain level of quality.
“
”
Presenter
Presentation Notes
UMD must be proactive with managing the risk of off-campus competition.
F U T U R E H O U S I N G
Reasons for Moving Off Campus
UNDERPINNINGS & IMPLICATIONS
Presenter
Presentation Notes
Reasons for moving off campus. How on campus experience relates to off campus experience Filtered by students who plan on moving off campus next year. Reasons to live off campus
O F F - C A M P U S M A R K E T A N A L Y S I S
Surveyed 8 purpose-built properties
2-mile radius from campus
Average rent is $823 - $961 / month / student
Nearly all require 12-month lease
Amenity-rich market Low vacancy rates 1,075 units in the
pipeline – not purpose-built student housing 7,125
Beds Available Within 1.6 Miles of Campus
UNDERPINNINGS & IMPLICATIONS
Domain Landmark Mazza Grandmarc
Terrapin RowThe
Enclave at 8700
The Varsity College
Park
University Club
University View
Unit AmenitiesDishwasher Furnished Garbage Disposal Granite Countertops Cable Internet In-unit W/D Microwave
Building AmenitiesCompuer Lab Concierge Courtyard Fitness Center Game Room Parking Restaurants / Retail Shuttle Service Study Room Util ities Included
78% 83% 72% 94% 83% 94% 83% 83%
O F F - C A M P U S M A R K E T A N A L Y S I S
UNDERPINNINGS & IMPLICATIONS
programmanagers.com
S U R V E Y A N A L Y S I S
64% Live in apartments or condominiums
25% Live in single-family houses or duplexes
74% Are satisfied with their
current living conditions
74% Live with other
students
3.6 Average number of bedrooms in unit
$789 Average per person, per month rental
rate in apartment
$518 Average per person,
per month rental rate in single-family
house
UNDERPINNINGS & IMPLICATIONS
Presenter
Presentation Notes
Clean up placement. Find rent per bed on Zillow. Average rental MF and AVG Single Family
programmanagers.com
The average monthly rent per person reported by respondents was slightly less than the off-campus market
analysis.
Average Personal Monthly Rent $789 Average Personal Monthly Utilities $65
Average Personal Monthly Cost of Housing
$854 + $429
Average per person share of security
deposits by respondents
Off-Campus Students
Housing Costs for Off-Campus Students
S U R V E Y A N A L Y S I S
Average Rent Students Pay by Unit Type
Studio 1BR 2BR 3BR 4BR80 0$ 842$ 733$ 717$ 730$
UNDERPINNINGS & IMPLICATIONS
Presenter
Presentation Notes
Compare to off campus average. Breakup?
programmanagers.com
S U R V E Y A N A L Y S I S
Utilities Students Pay For in Addition to Lease
Respondents that reported having a lease indicated that it rarely followed the academic year or semester and typically did not include many utilities other than trash pick-up and
sewer.
Off-Campus Students Lease Terms
67%
47%
42%
28%
28%
21%
21%
8%
7%
Electric
Water
Internet
Cable
Gas / oil
Not applicable
Parking
Trash & recycling
Sewer
83% Students Reported 12
Month Leases Off Campus
UNDERPINNINGS & IMPLICATIONS
Presenter
Presentation Notes
No chart. 83% have 12 month lease
M A R K E T D Y N A M I C S
1.5M Sq. Ft. of Commercial and Residential Development
in Construction and Pipeline
$2B Public and Private Investment Dollars
1.2K Number of New
Student- Focused Beds Online in Last Two Years
10+ Food Destinations = Projects in the Pipeline
UNDER PINNINGS & IMPLICATIONS
Source: Greater College Park
Presenter
Presentation Notes
Dynamic off campus market attracts young professionals and new families Greater College Park initiatives to encourage economic investment and home purchases RISE Zone and Discovery District – Business Incubator Zones with available capital seed dollars Greater College Park University Partnership Home Purchase Assistance – zero interest, forgivable loan for single family home purchases to strengthen “pocket neighborhoods” for city employees and university staff
U N D E R P I N N I N G S A N D I M P L I C AT I O N S O P E R A T I N G P A R A D I G M S
Higher Education Commercial Real Estate Focused on trends and fashion
Niche market segments targeted
Short-term capital repositioning
Market cycle perspective
Asset specific underwriting
Grounded on permanent ideals
Entire student population must be accounted for
Focused on non-financial and indirect financial benefits
Institutional life-cycle perspective
Institutional / Portfolio underwriting
Landmark Domain College Park Emory University Tulane University
Presenter
Presentation Notes
Convenience / location & flexibility - Only 39% of off campus students / 16% of all indicated “would prefer to live off campus” in DBP
U N D E R P I N N I N G S A N D I M P L I C AT I O N S
Higher Education Commercial Real Estate Focused on trends and fashion
Niche market segments targeted
Short-term capital repositioning
Market cycle perspective
Asset specific underwriting
Highest + best use based on residual land value
Recruitment / Retention
Developmental outcomes
Well-being outcomes
Relationship Outcomes
Market Segment Solutions
O P E R A T I N G P A R A D I G M S
On-Campus Residents: – All students in residence
halls – All students in P3 properties
Off-Campus Residents: – Enrolled full-time – Age 18-24 (undergrad) – Renting off campus
(not with family, partner, or dependent)
– Paying more than $800 per month in rent
Assumptions – Based on Fall 2016
full-time undergraduate enrollment (26,350)
– Flat enrollment scenario – “Occupancy Coverage
Ratio” to mitigate risk
Those not meeting this criteria are excluded from
the demand analysis
UNDERPINNINGS & IMPLICATIONS H O U S I N G D E M A N D
Traditional Pods
(S) $3,575-$3,825 / Semester
(D) $4,175-$4,425 / Semester
(S) $4,175-$4,425 / Semester
(D) $3,575-$3,825 / Semester
UNDERPINNINGS & IMPLICATIONS H O U S I N G D E M A N D
Semi-Suite Full Suite Studio APT
(S) $5,675-$5,925 / Semester
(D) $5,425-$5,675 / Semester
(S) $6,175-$6,425 / Semester
(D) $5,565-$5,925 / Semester
(S) $7,175-$7,425 / Semester
2BR / 1BA APT
(S) $6,925-$7,145 / Semester (S) $7,675-$7,925 / Semester
1BR / 1BA APT 4BR / 2BA APT
(S) $6,425-$6,675 / Semester
UNDERPINNINGS & IMPLICATIONS H O U S I N G D E M A N D
UNDERPINNINGS & IMPLICATIONS H O U S I N G D E M A N D
Fraternity & Sorority Life
Recommended Additional Beds
Freshman & Sophomore
Junior & Senior
Total Demand: 1,648
259
1,183
206
The UMD Resident Life experience cannot be replicated off campus.
programmanagers.com
UNDERPINNINGS & IMPLICATIONS P L A N N E D B E D L O S S B Y C L A S S I F I C A T I O N
Denton Community Ellicott
Community Cambridge Community
South Hill Community
1,260 Freshman + Sophomore
Bed Loss
634 Junior + Senior
Bed Loss
1,894 Total Bed Loss
North Hill Community -577 Beds
Presenter
Presentation Notes
Replacement of lost beds is difficult due to limited developable land.
programmanagers.com
UNDERPINNINGS & IMPLICATIONS H O U S I N G D E M A N D & R E P L A C E M E N T N E E D
Fraternity & Sorority Life
Demand Replacement Beds (Demolition, Renovation, De-densification)
Total
1,260
634
Freshman & Sophomore
Junior & Senior
Total Need: 3,542
259 1,519
1,183 1,817
206 206
The UMD Resident Life experience cannot be replicated off campus.
Presenter
Presentation Notes
Recommended Addtl Beds- 1648 Replacement- 1894 Total- 3542 Total current beds: UMD- 9475 P3- 2899 12,374 (+1,272 F&SL) = 13,646 total 13,646 + 1,648 = 15,294 (12% growth) Growth to 14,352 (5.2%) (loss of 1894 beds) (+2600 practice field & Ltown) Not enough developable land without the lot one site With the focus on first and second year students, housing market to supplement demand per the SAV Current capture: 70% F&S 25% J&S Proposed capture: 73% F&S 32% J&S
programmanagers.com
54% Convenient Location
49% In Room Wireless Internet Access
33% In Unit Full Kitchen
32% Full Sized Beds
Physical Features UMD Should Consider When Updating Housing
26%
26%
Laundry Facilities in the Building
Individual Temperature Controls in Living Units
S U R V E Y A N A L Y S I S
UNDERPINNINGS & IMPLICATIONS
Presenter
Presentation Notes
Keep
programmanagers.com
Factors to Consider for Improvement
Keep Housing Costs Affordable
Improve the Physical Condition of Existing Campus Housing
Improve Amenities in Existing Campus Housing
Change Existing Housing Policies
Modern and Attractive Living Environments
94%
85%
82%
79%
72%
SU R V E Y A N A L Y S I S
UNDERPINNINGS & IMPLICATIONS
Presenter
Presentation Notes
Add 4 categories
RECOMMENDATIONS
RECOMMENDATIONS S U M M A R Y O F R E C O M M E N D A T I O N S
Update and refine the phasing of systematic renovation of existing residence halls
Align unit types with market demand Develop up to 2,600 beds of new housing
– 1,350 beds on the Varsity Practice Field Site – Up to 1,050 beds of suite or apartment units – 200 beds of Fraternity and Sorority housing
Undertake a Strategic Plan for Fraternity and Sorority Housing
– Determine the future scope and scale of F&S Housing with a sustainable funding model
Presenter
Presentation Notes
Prioritize halls without HVAC Minimize year over year bed fluctuations Further replace traditional beds with pods/suites Unit type alignment
RECOMMENDATIONS
Location – Varsity Practice Field
Program – Maximize density – 1,350 beds appears feasible – Semi-suite or pod-style
units
Target Market – 1st and 2nd Year students
Opportunities – Student-athlete recruitment – Adjacency to Athletics – Students interested in
convenience, flexibility, and high quality options
N O R T H C A M P U S
Presenter
Presentation Notes
Maximize build out of site to mitigate bed loss.
RECOMMENDATIONS N O R T H C A M P U S
Building 1 – Pod Style Housing – Building Footprint: 15,300 GSF – Assumed 330 SF/Bed – Approx. 278 Beds at 6 Stories – Expansion (1a)
• Footprint: 8,250 GSF • Approx. 150 additional beds at 6
Stories
Building 2 – Pod Style Housing – Building Footprint: 16,800 GSF – Assumed 330 SF/Bed – Approx. 305 Beds @ 6 Stories – Expansion (2a)
• Footprint: 9,000 GSF • Approx. 160 additional beds at 6
Stories
Building 3 – Pod Style Housing – Building Footprint: 24,800 GSF – Assumed 330 SF/Bed – Approx. 450 Beds @ 6 Stories
1 2
3
Dining Facility
1a
2a
Site images are artistic illustrations and are not drawn to scale.
Presenter
Presentation Notes
With alternatives, the site can accommodate 1,350 beds
CAPITAL PROJECT TIMELINE 2 0 1 4 H O U S I N G S T R A T E G I C P L A N
HVAC / Maintenance / Reno Vacate / Demolish New Construction Maintenance / Reno
Ellicott Centerville
New Leonardtown
-400 Beds
Easton
Chestertown
Elkton
Triple/Quad Conversions
2016 2017
2018 2019
2020
2021 2022
2023 2024
2025
2026
2027
South Hill Community Center
La Plata
Bel Air
Denton
New Ellicott 350 Beds
Worcester -166 Beds
New North Hill 450 Beds
Cumberland
Practice Field 880 Beds
Cecil
Wicomico -163 Beds
Caroline -127 Beds
Carroll -121 Beds
Hagerstown
Old Leonardtown
-234 Beds
Lot 1 Phase 2 700 Beds (P3)
Cambridge
Dorchester
Lot 1 Phase 1 800 Beds (P3)
12,487 beds
12,484 beds
13,248 beds
13,686 beds
13,214 beds
14,082 beds
14,324 beds
14,632 beds
14,600 beds
14,389 beds
14,287 beds
13,873 beds
*Includes 2,899 P3 beds, Does not include F&SL beds
CAPITAL PROJECT TIMELINE 2 0 1 4 H O U S I N G S T R A T E G I C P L A N – B E D C O U N T
*Includes 2,899 P3 beds, Does not include F&SL beds
CAPITAL PROJECT TIMELINE 2 0 1 7 H O U S I N G S T R A T E G I C P L A N U P D A T E
HVAC / Maintenance / Reno Vacate / Demolish New Construction Maintenance / Reno
Ellicott
Centerville
Easton Chestertown
Elkton
Triple/Quad Conversions
2018 2019
2020 2021
2022
2023 2024
2025 2026
2027
La Plata
Bel Air
Denton
Worcester -166 Beds
Cumberland
Practice Field- Ph I 893 Beds
Cecil
Wicomico -163 Beds
Caroline -127 Beds
Carroll -121 Beds
Hagerstown
Leonardtown -634 Beds
Dorchester
12,073 beds
12,087 beds
12,061 beds
12,112 beds
12,106 beds
12,092 beds
12,376 beds
12,397 beds
12,325 beds
12,811 beds
Practice Field- Ph II 450 Beds
Leonardtown Replacement Ph I
550 Beds
Leonardtown Replacement Ph II
500 Beds
*Includes 2,899 P3 beds, Does not include F&SL beds
Presenter
Presentation Notes
Major renovations all completed in next 5 years Demolition projects all completed in next 5 years New Ellicott, new North Hill not needed New dining & academic included in varsity practice field
CAPITAL PROJECT TIMELINE 2 0 1 7 H O U S I N G S T R A T E G I C P L A N U P D A T E
*Includes 2,899 P3 beds, Does not include F&SL beds
NEXT STEPS
programmanagers.com
NEXT STEPS S T U D E N T H O U S I N G P L A N N I N G
Incorporate Feedback Final Documentation Institutional Commitment
– Ongoing Systematic Renovations – Practice Field Development
• Detailed Program • Rental Rate Analysis
– F&SL Strategic Plan
Presenter
Presentation Notes
Impact of status quo Deteriorating levels of student housing satisfaction Students will transition to the off-campus market as second year + Erosion of campus vibrancy, participation / impact of LLCs, recruitment & retention, UMD student experience Potential loss of on-campus sites for housing
programmanagers.com
UNIVERSITY OF MARYLAND COLLEGE PARK
S T U D E N T H O U S I N G M AR K E T AN ALY S I S
J u n e 2 0 1 7
