Luxury apartments, the new U.S. college dorm?
But that could all be changing at American colleges and universities as schools are increasingly turning to private developers to build student housing. And to attract students (customers) developers are adding all the luxury amenities you might expect to find in high-end apartment buildings in big cities. The Wall Street Journal reports:
Real-estate investors and developers, hungry for new areas for growth, are finding a lucrative and previously untapped market in these areas surrounding college campuses, one marked by low inventory, booming enrollment and an increasing appetite for luxury living.
Last year, the University of Kentucky made news when it began turning over its 6,000 beds and apartments to the publicly held Education Realty Trust, or EdR, for updating and expansion. Much of the existing housing stock will likely be razed and rebuilt. Some 600 additional beds will be ready in August and 2,300 more will be available in 2014. EdR, which has purchased or developed $2.4 billion worth of student housing since 2000, controls housing for about 38,000 students nationwide. The University of Kentucky receives a percentage of gross revenue—which varies by residence hall—and a percentage of EdR's net income.
But for universities that don't turn their housing over to private developers, it's putting pressure on schools to upgrade to modern housing to compete for students. It's a difficult balance as students increasingly look to live at home and opt for online courses that don't require them to step onto campus.
Still, there's a need for more housing. With 3 million seniors graduating from high school until 2018-2019, there's a steady stream of students that will need housing and developers are taking advantage.
For students, it's costing more than dorm living but less than what they would get off campus. Wall Street Journal reports that at one luxury apartment complex at the University of Central Florida, students pay $655 per month for a room in a shared four-bedroom, four-bathroom unit. Living in a dorm room costs $550 per month and an on-campus four-bedroom, four-bath unit runs $800 a month. And that's without the tanning beds, putting greens, and pool.
Is luxury living the new dorm life?
Resort Living Comes to Campus [Wall Street Journal]
Photo courtesy of University House