Commercial Investment Real Estate is the magazine of the CCIM Institute, the leading provider of commercial real estate education. CIRE covers market trends, current developments, and business strategies within the commercial real estate field.
Issue link: http://cire.epubxp.com/i/649656
24 March | April | 2016 Commercial Investment Real Estate ville, Ark., the University of Arkansas's "Campaign for the 21st Century" further accelerated the student population explo- sion from 10,000 to 27,000, prompting an urgent demand for student housing. Local Fortune 500 companies, such as Walmart and Tyson Chicken, jumpstarted the campaign to improve the quality of life to attract and retain employees in Fayetteville. T e $1 billion raised "changed the landscape in Fayetteville across the board," says Clin- ton Bennett, CCIM, vice president at CBRE Brokerage in Fayetteville. "T e success of the University [of Arkansas] has resulted in a tre- mendous amount of student housing devel- opment in areas that are in close proximity to its campus. Now we are beginning to see a signif cant increase in the ef orts of retail developers in those same areas." Bennett reports more than 2,000 student- specif c multifamily units have been built in the last four years and an additional 1,000 units are on the drawing board or under construction. While the University of Arkansas has not been an active player in the leasing or investment markets, the campus footprint has spread, creating more land scarcity close to campus and leading to higher property costs. "Due to the growth of students and their housing needs, the recession hardly af ected northwest Arkansas and our business stayed strong, with a large number of transactions," Bennett says. Another thriving campus is University of North Carolina in Charlotte, N.C., where prices have accelerated rapidly since 2013 and multifamily high-rises are booming, according to Karen Mankowski, CCIM. She sold prime land close to UNC for student housing in 2013. T e city's light rail train extension to the university's campus expected by fourth quarter 2017 has spurred a land and building frenzy. Developers and investors are vying rigorously for new development and reno- vation of properties, including mixed-use luxury student housing and retail, close to the light rail extension. "College students here have preferences similar to millennials, such as gravitating toward urban centers, preferring amenity- rich rentals, and ditching cars in favor of walking, biking, and public transporta- tion," says Mankowski, associate direc- tor at Newmark Grubb Knight Frank in Charlotte. 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% Q1 '12 Q1 '13 Q1 '14 Q1 '15 United States Student Housing APT North America APT Average Cap Rate (Yield) 0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 Q1 '12 Q1 '13 Q1 '14 Q1 '15 United States Student Housing APT North America APT Average Price ($) per Unit -100% -50% 0% 50% 100% 150% 200% 250% 300% Q1 '12 Q1 '13 Q1 '14 Q1 '15 Changes in Sales (Year Over Year) 0 1,000 2,000 3,000 4,000 Q1 '12 Q1 '13 Q1 '14 Q1 '15 Rolling 12-mo. Total Quarterly Vol. 6,000 5,000 Sales by Total $ (mil) Student Housing Stats Source: Real Capital Analytics