Student Housing Trends: What's Hot in 2014 | Webinar with Jay Denton (Property Management Industry)

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With our co-hosts Grace Hill and Axiometrics, we hosted a fantastic webinar on Student Housing Trends: What's Hot in 2014. Our presenter Jay Denton, from Axiometrics (leading provider of market data) as he covers the market analysis of this growing sector and what you can do in your business to capitalize on this fast growing trend.

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Student Housing Trends: What's Hot in 2014 | Webinar with Jay Denton (Property Management Industry)

  1. 1. Student Housing Trends March 2014
  2. 2. AppFolio Complete Solution Includes: Web-BasedPropertyManagementSoftware • Property management and accounting • Online rent collection (free) • Prospect / guest card tracking • Marketing • Website • Payment processing • Online applications • Resident Screening So You Run A More Successful Business
  3. 3. • Leading Education Provider • Apartment-Industry Specific Training • Vision Learning Management System (LMS) • www.gracehill.com • Facebook.com/GraceHillTraining
  4. 4. Axiometrics Inc. StudentHousingData andAnalytics Provider • Trackspropertiesrelatedtomorethan450universities andcollegesacrosstheU.S. • CollectsAskingRents,Concessions,and EffectiveRentsattheFloorPlanLevel; OccupancyatPropertyLevel • ReportsatProperty,CompSet,University,andPortfolioLevels • Propertiestrackedfromplanningthroughstabilization • Alsotracksconventionalapartments,includingthosecompetingforstudents https://twitter.com/axiometrics
  5. 5. POLLING QUESTION Which best describes your Student Housing experience?
  6. 6. Student Housing Compared to ConventionalApartments The leasing cycle is completely different Leasing is by the bed rather than by the unit Concessions are often in the form of gift cards or other items Unit mixes are weighted more towards four-bedroom floor plans Amenities are geared towards students Location is even more important Demand is primarily from enrollment growth and pent-up demand “Our similaritiesare different” Quote is from Dale Berra describing his father Yogi Berra.
  7. 7. U.S. Enrollment Growth Demand has been two-fold.Many existing student housing options wereobsolete. Ontop of that, enrollment grew by approximately 6 millionstudents over the last 20 years. Sources: Axiometrics Inc., NCES 5,000 6,000 7,000 8,000 9,000 10,000 11,000 12,000 13,000 14,000 15,000 16,000 17,000 18,000 19,000 20,000 21,000 22,000 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Est.2013 2014F 2015F 2016F 2017F 2018F U.S. Post-Secondary Total Enrollment ('000) U.S. Post Secondary Total Enrollment ('000) Linear (U.S. Post Secondary Total Enrollment ('000)) U.S. enrollment includes schools of all types, including: -Major universities -Commuter schools -Public/Private -2 Yr Schools (Vocational/Community College) -Online
  8. 8. U.S. EnrollmentGrowthComparedto Employment Growth 1. It’snotsurprisingtoseeabriefperiodofoverallnegative enrollmentgrowthfollowingareboundinthejobmarket. 2. Notalluniversitiesareexperiencingnegativeenrollmentgrowth. Sources: Axiometrics Inc., NCES, BLS -5% -4% -3% -2% -1% 0% 1% 2% 3% 4% 5% 6% 7% 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 Est. 2013 2015F 2017F U.S. Post Secondary Enrollment Growth U.S. Job Growth
  9. 9. U.S. EnrollmentGrowthComparedto Employment Growth 1. It’snotsurprisingtoseeabriefperiodofoverallnegative enrollmentgrowthfollowingareboundinthejobmarket. 2. Notalluniversitiesareexperiencingnegativeenrollmentgrowth. Sources: Axiometrics Inc., NCES, BLS -5% -4% -3% -2% -1% 0% 1% 2% 3% 4% 5% 6% 7% 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 Est. 2013 2015F 2017F U.S. Post Secondary Enrollment Growth U.S. Job Growth
  10. 10. U.S. EnrollmentGrowthComparedto Employment Growth 1. It’snotsurprisingtoseeabriefperiodofoverallnegative enrollmentgrowthfollowingareboundinthejobmarket. 2. Notalluniversitiesareexperiencingnegativeenrollmentgrowth. Sources: Axiometrics Inc., NCES, BLS -5% -4% -3% -2% -1% 0% 1% 2% 3% 4% 5% 6% 7% 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 Est. 2013 2015F 2017F U.S. Post Secondary Enrollment Growth U.S. Job Growth
  11. 11. U.S. EnrollmentGrowthComparedto Employment Growth 1. It’snotsurprisingtoseeabriefperiodofoverallnegative enrollmentgrowthfollowingareboundinthejobmarket. 2. Notalluniversitiesareexperiencingnegativeenrollmentgrowth. Sources: Axiometrics Inc., NCES, BLS -5% -4% -3% -2% -1% 0% 1% 2% 3% 4% 5% 6% 7% 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 Est. 2013 2015F 2017F U.S. Post Secondary Enrollment Growth U.S. Job Growth
  12. 12. Student Housing Beds Delivered by Year - National The pace of new supply is increasing, but what does that mean? 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 The deliveries prior to 1995 were mostly conventional apartments later converted to by-the-bed rentals. This portion of the chart shows how the asset class has matured and gained interest the last 20 years. It does not automatically equate to oversupply. Beds Source: Axiometrics Inc. Based on coverage as of February 2014.
  13. 13. National Off-Campus Student Housing Stock by Year The real estate asset class has grown tremendously over the last 20 years. Source: Axiometrics Inc. Based on coverage as of February 2014. 0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Beds Though total stock continues to increase, it was practically non- existent just 20 years ago.
  14. 14. Student Housing Stock Compared to Total Multifamily While Student Housing has grown as an asset class, it is still a small portion of total multifamily being developed. Sources: Axiometrics Inc.; Census Based on coverage as of February 2014. Stock represents net additions. 0 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 8,000,000 9,000,000 10,000,000 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Cumulative Stock Added Since 1995 (Net) Student Housing Other Multifamily Beds
  15. 15. POLLING QUESTION What is the geographic extent of your firm’s Student Housing portfolio?
  16. 16. Expansion of Student Housing When looking at macro supply, keep in mind how development has spread to untapped markets. 1990 2001 2008 2014 Source: Axiometrics Inc. Based on coverage as of February 2014.
  17. 17. Student Housing Beds Delivered by State Since 1995 Universities across Texas and the Southeast have led the way in changing the landscape of student housing. Source: Axiometrics Inc. Based on coverage as of February 2014. 0 20,000 40,000 60,000 80,000 100,000 120,000 TX FL NC GA PA CA MI AL VA AZ SC IN OH IL Beds
  18. 18. Number of Beds Delivered by Development Cycle These universities have had varying waves of supply deliver over the previous development cycles. Source: Axiometrics Inc. Based on coverage as of February 2014. 0 5,000 10,000 15,000 20,000 25,000 30,000 FSU TAMU FLA TEX UCF TEXST GSU GEOR TTU NCSU 2011-Current 2003-2010 1995-2002 Before 1995
  19. 19. Beds Delivered by Year for Select Universities Deliveries at individual universities do not show the same type of upward slope as the national trend. Source: Axiometrics Inc. Based on coverage as of February 2014. 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 University of Arizona 0 500 1,000 1,500 2,000 2,500 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 University of Central Florida 0 500 1,000 1,500 2,000 2,500 3,000 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 University of Texas at Austin 0 200 400 600 800 1,000 1,200 1,400 1,600 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 University of Alabama
  20. 20. Where are Students Living? By-the-bed rentals located off campus are still in the minority. Most students are living in the “other” product. Sources: Axiometrics Inc., Common Data Sets, IPEDS Based on coverage as of February 2014. 0 10,000 20,000 30,000 40,000 50,000 60,000 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Beds University of Texas Occupied Beds by Type Other On Campus Off Campus - By the Bed 0% 20% 40% 60% 80% 100% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 ShareofTotalBeds University of Texas Share of Occupied Beds by Type Other On Campus Off Campus - By the Bed 0 10,000 20,000 30,000 40,000 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Beds University of Alabama Occupied Beds by Type Other On Campus Off Campus - By the Bed 0% 20% 40% 60% 80% 100% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 ShareofTotalBeds University of Alabama Share of Occupied Beds by Type Other On Campus Off Campus - By the Bed
  21. 21. POLLING QUESTION What do you think is the most critical for the success of a Student Housing property?
  22. 22. Variance in Pre-lease Rates by University Each circle represents a property’s rate in February ’14. Why are some properties leaders or laggards? Source: Axiometrics Inc. Based on coverage as of February 2014.
  23. 23. Fall 2014 Pre-lease Rates by Distance from Campus Properties close to campus tend to lease faster, but other factors matter as well. Source: Axiometrics Inc. Based on coverage as of February 2014. 0% 20% 40% 60% 80% 100% 0.0 0.5 1.0 1.5 2.0 2.5 3.0 Distance from Campus (Mi) Feb 2014 Prelease by Distance Florida State University 0% 20% 40% 60% 80% 100% 0.0 0.5 1.0 1.5 2.0 2.5 3.0 Distance from Campus (Mi) Feb 2014 Prelease by Distance Louisiana State University 0% 20% 40% 60% 80% 100% 0.0 0.5 1.0 1.5 2.0 2.5 3.0 Distance from Campus (Mi) Feb 2014 Prelease by Distance Texas A&M University 0% 20% 40% 60% 80% 100% 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 Distance from Campus (Mi) Feb 2014 Prelease by Distance University of Texas at Austin
  24. 24. What are the Rent Levels at Student Properties? At Florida State University, the price per bed can range from $300 tomore than $1,000 depending onthe property and floor plan. Source: Axiometrics Inc. Based on effective rent levels collected in January 2014. $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 Off Campus Price Level Options Florida State University - All Floor Plans The price per bed can range based on factors such as: -Number of beds in the floor plan -Location of property -View of units -Property amenities -Style of property Price per bed
  25. 25. What are the Rent Levels at Student Properties? At Florida State University, the price per bed can range from $300 tomore than $1,000 depending onthe property and floor plan. Source: Axiometrics Inc. Based on effective rent levels collected in January 2014. $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 Off Campus Price Level Options Florida State University - All Floor Plans How deep is the demand pool? How many students in the $700- $800/bed range can afford the next level of product? Price per bed
  26. 26. How Rent Levels Vary by Distance from Campus The followingcharts show the price per bed for four bedroom floor plans. The rent level isplotted by distance from campus. Source: Axiometrics Inc. Based on effective rent levels collected in January 2014. $200 $300 $400 $500 $600 $700 $800 0.0 0.5 1.0 1.5 2.0 2.5 3.0 Distance from Campus (Mi) Florida State University Four-Bedroom Floor Plans Effective Rent Per Bed $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 0.0 0.5 1.0 1.5 2.0 2.5 3.0 Distance from Campus (Mi) University of Texas at Austin Four-Bedroom Floor Plans Effective Rent Per Bed
  27. 27. How Rent Levels Vary byAge and Distance - National It is no surprise that newer properties, and those closer to campus, command a premium rent level. Source: Axiometrics Inc. Based on effective rent levels collected in January 2014. The scale has been tightened to remove outliers. Some 4x4 floor plans average more than $1,000 per bed. $200 $300 $400 $500 $600 $700 $800 $900 $1,000 1994 1999 2004 2009 2014 Year Built Price Per Bed by Year Built National - 4x4 Floor Plans Effective Rent Per Bed $200 $300 $400 $500 $600 $700 $800 $900 $1,000 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 Distance from Campus (Mi) Price Per Bed by Distance National - 4x4 Floor Plans Effective Rent Per Bed
  28. 28. Effective Rent Growth Performance by Property Withina university market, rent growthvaries by property. Source: Axiometrics Inc. Effective rent growth is based on rates collected in from November 2013 to January 2014 compared to the same months the prior year. -15.0% -10.0% -5.0% 0.0% 5.0% 10.0% 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 Distance from Campus (Mi) Rent Growth by Distance Florida State University -10% -5% 0% 5% 10% 0.0 0.5 1.0 1.5 2.0 2.5 3.0 Distance from Campus (Mi) Rent Growth by Distance North Carolina State University -10% -5% 0% 5% 10% 15% 0.0 0.5 1.0 1.5 2.0 2.5 3.0 Distance from Campus (Mi) Rent Growth by Distance Texas State University -10% -5% 0% 5% 10% 0.0 0.5 1.0 1.5 2.0 2.5 3.0 Distance from Campus (Mi) Rent Growth by Distance Texas A&M University
  29. 29. Disclaimer Notice Disclaimer Notice. All advice, consultations, queries, data and reports (collectively referred to as the “Reports”) provided herein are prepared from data believed reliable without verification or investigation and are not guaranteed or warranted by AXIOMETRICS INC., its directors, officers, employees, and contractors and do not purport to be complete or error free or useful for any purpose. The facts and opinions contained herein are not guaranteed or warranted to be complete or error free or useful for any purpose. The opinions expressed in such information are subject to change without notice. AXIOMETRICS, its directors, officers, employees, and contractors assume no liability for or from its advice, consultations, queries, and reports provided HEREIN. Please use such information at your own risk. This material is the property of Axiometrics, Inc. and may not be reproduced, copied, or otherwise distributed without the explicit written consent of Axiometrics, Inc.

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