Western Real Estate Business

SEP 2018

Western Real Estate Business magazine covers the multifamily, retail, office, healthcare, industrial and hospitality sectors in the Western United States.

Issue link: https://westernrealestatebusiness.epubxp.com/i/1027244

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Page 63 of 82

www.REBusinessOnline.com Western Real Estate Business • September 2018 • 61 In the end, robotics systems and automation are becoming increas- ingly viable solutions for the school construction industry, allowing stu- dent housing projects to be built faster and for less money while improv- ing on-campus safety by minimizing disruption. Even slight differences in operating expenses can unlock signifi- cant savings, and companies must be prepared to meet the demands of in- telligent institutions with digital tech- niques and advanced technologies or they risk not having the tools get the job done. MARKET FACTORS MUST BE CONSIDERED FOR STUDENT HOUSING, MIXED-USE DEVELOPMENTS By Dan Sheridan, Partner, Hoffman Strategy Group's Newport Beach, Calif., office As today's colleges and universi- ties evolve and expand their offerings in an effort to attract more students, off-campus student housing projects need to evolve. Students today and their families expect amenity laden projects that are safe, secure and fun. Given these conditions and the com- petitive environment, it is not surpris- ing that some student housing devel- opers are looking to create mixed-use projects around their student housing. More than putting "heads in beds" or jamming a small amount of retail on the ground floor of a student housing tower as an afterthought, these devel- opers are striving to create places that not only meet the needs of students but also the broader community. The focus is and should be on realizing the full value of the real estate with a thoughtful and market-based integra- tion of multiple uses. A successful mixed-use project re- quires student housing developers to make the effort to fully understand their market. Not only the student population. In many ways, this re- quires developers to focus on the fundamental concepts of demand and supply. This focus will not only increase the likelihood of a success- ful project but will be absolutely nec- essary in order to tell the story of the mixed-use project to potential retail, food and beverage, hospitality and other tenants and operators. The demand side of the equation consists of four components — trade area residents, students, daytime workers and visitors to the univer- sity (such as for athletic and cultural events). The developer needs to fully understand the composition of each of these components. For residents, for instance, what are population and em- ployment trends, income levels, per- centage of renter households versus owner occupied, number of people per household, median age, etc. Based on this demand knowledge, market- based projections can made. Total spending across all retail and dining categories can be estimated. The need for market rate multi-family units and for sale residential product can be es- timated. This is the information that is needed to begin to determine the right "mix" supportable by the market. The other side of the mixed-use de- velopment equation is supply. The developer and its team will need to understand retail sales, vacancy and multifamily absorption rates, rents, etc. in the market. The final step is to combine the de- mand and supply analysis. In the retail space, this step enables the identifica- tion of voids in the market or — better said — opportunities for the project. A void calls out potential opportunity and allows the developer to tailor the design and size of its project for the market. Anticipated shortages in resi- dential units can also be highlighted. Hotel demand and corresponding revenue can be estimated. The build- ing blocks for a successful mixed-use project are coming together based on specialized and focused market re- search. Student housing developers know students and what drives students and their parents to make housing de- cisions. To create a genuine mixed-use place in a university setting, however, developers must fully understand the broader market. Without this under- standing and knowledge, a mixed-use project can become a mixed-up proj- ect. Disciplined. Transparent. Consistent. www.VEREIT.com Local Roots, National Reach All data as of 06.30.18. VEREIT® is not affiliated or associated with, is not endorsed by, does not endorse, and is not sponsored by or a sponsor of the tenants or of their products or services pictured or mentioned. The names, logos and all related product and service names, design marks and slogans are the trademarks or service marks of their respective companies. Headquartered in Phoenix, VEREIT is a full-service real estate operating company which owns and manages one of the largest portfolios of single-tenant commercial properties in the U.S. VEREIT's business model provides equity capital to creditworthy corporations in return for long-term leases on their properties. Gross Real Estate Investments $15.5 Billion More Than 4,000 Properties 94.6 Million Rentable Square Feet 49 States Puerto Rico and Canada 98.8% Economic Occupancy Rate 9.1 Years Weighted Average Lease Term

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