Student Housing’s Lux 10 Percent
Real estate investors are plunging into the high tide of college enrollments, and they build luxury for the top 10 percent. Here’s what’s going up in Tuscaloosa and Auburn for the most affluent — or lavishly indebted — scholars.
Two miles from the University of Alabama campus, the Retreat at Lake Tamaha offers 1,306 beds and a shuttle service to campus, in addition to a poker room, theater and golf simulator.
Marketing phrases like “World Class Luxury” and “Student Living Redefined” are among those used in Tuscaloosa and Auburn to illustrate the distinct trend in upscale off-campus housing for today’s college students.
It’s common to find resort-style living with pools, volleyball, fitness centers, tanning beds, putting greens, dog parks, game rooms – along with more standard touches like study lounges and computer labs. Not to mention high-end finishes like granite and stainless steel in units. Security and high-speed Internet also are important.
Newer on-campus residence halls have enhanced offerings to cater to students seeking more privacy and conveniences. Individual bedrooms and bathrooms, and sometimes, flat screen TVs, queen-sized beds and washers and dryers are included.
“It’s a burgeoning industry driven by what has been perceived as tenant demand and demographics with the wave of college age kids entering the pipeline,” says Jim Andrews, an Alabama real estate expert. “It’s also driven in part by the aging housing stock of what is available.”
Even though the demographics look good and college enrollment continues to climb, he says the upscale developments are going after a small sliver, probably 10 percent of the market, in terms of affluence and affordability.
Parents pay for what they can afford. But Andrews says some critics say the more upscale offerings are in part driven by access to student loan debt, which allows students to pay more in rent.
On-campus housing at the University of Alabama ranges from $1,895 to $5,200 per semester. At Auburn, it’s between $2,500 and $5,000 per semester. Off campus pricing at the upscale communities can range from $950 per month and up.
“It’s a growing section of real estate where the money will follow a return,” Andrews says, adding that during the economic downturn, the inflow of money went to multi-family housing and student housing was particularly popular.
Andrews says off-campus student housing attracts a wide variety of investors including publicly traded companies, property developers, individual pension funds, foreign investors, life insurance companies and private wealthy individuals.
At the University of Alabama and Auburn University, on-campus housing stays at or near full capacity. It’s the same at upscale properties like The Veranda and Creekside at Auburn, and The Bluff at Waterworks Landing and The Retreat in Tuscaloosa.
Off-campus properties under construction, like 319 Bragg in Auburn, are heavily leased, months before they’re completed. Brandon Barrett, of Barrett Development Group, says there are a few leases left for 319 Bragg, set to open in August.
“We’re going for the wow factor by offering typical amenities and the extra ones that students want,” he says. “It will be one of the coolest student housing sites you’ve ever seen. It has a very modern look and feel.”
Presidential Village I. This residential community opened in fall 2012. A second phase, Presidential Village II, is under construction and is scheduled to open for fall semester 2014.
Living on-campus at UA
At the University of Alabama, freshmen are required to live on campus, says Cathy Andreen, director of media relations. And enrollment is up, increasing from 20,333 in 2003 to 34,852 in 2013.
“New campus housing is part of our planned growth to accommodate our increasing number of students,” she says.
She says the school started building residence halls with suite-style rooms — four single rooms and two bathrooms with a living area and a kitchenette — with the construction of Riverside Residential Community, which was completed in 2005.
Since then, the school has built the Lakeside, Ridgecrest and the first phase of the Presidential Village residential communities. Presidential Village II is currently under construction and is expected to open in fall 2014. It will include 871 beds, and completes the Presidential Village community. Presidential Village I opened in fall 2012 with 984 beds.
Alicia Browne, director of housing administration at Alabama, says the housing plan there is most affected by students’ desire for more privacy.
“Although not every student today is looking for more privacy in their bedroom and bathroom, many are,” Browne says. “This has guided much of our most recent building. That said, older residence halls continue to have features that students like, as well, including a lower cost and a great sense of community.”
Andreen says several of the newer residence halls have classrooms, including Presidential Village. They also have study spaces and other common areas to support community development. A new student center, including a recreation center, is under construction between the two Presidential Village residence halls. Several residence halls, she says, newer and older, have outdoor recreation areas.
The Village, which Auburn University opened in 2009, features eight buildings with suite-style units offering individual bedrooms.
Living on campus at AU
Bob Ritenbaugh, assistant vice president of auxiliary services at Auburn University, says freshmen are not required to live on campus at Auburn, but the school tries to provide enough housing for 4,000 incoming freshman each year.
He says Auburn’s Board of Trustees, some years ago, determined that a student population of 25,000 was optimum, and currently the school has just more than 25,000 students.
In mid-2005, he says, the school launched a new housing initiative, which started with construction of The Village, which opened in 2009. It features eight buildings with suite-style units that feature small individual bedrooms, two-person shared bathrooms, and common living area for up to four people. Four house co-ed freshmen and upperclassmen. Auburn’s social sororities are housed in three of the buildings, and one building houses members of the Honors College.
“Students are not as integrated as they are when living together in one bedroom in the traditional model, but a lot of our students have always had a bedroom of their own and they’re not about to share one with another person,” Ritenbaugh says. “So when looking at new construction, we’ve moved away from traditional shared bedrooms to suites with individual rooms for each person.”
When it comes to recruiting top athletes and honors students, he says the housing options are important.
“That was the genesis behind South Donahue Residence Hall. It’s not an all-athletic residence hall because the NCAA says less than 50 percent of any residence hall can be used for athletes. The rest who live there are undergrads, but that building is the cat’s meow,” Ritenbaugh says. “It’s not inexpensive to live there either, but it’s full because enough people want the best of the best.”
South Donahue opened in August 2013 with 209 rooms and 426 beds. Students get their own large bedroom with a queen-sized bed and a desk. Each bedroom has a private bathroom. Each unit shares a common living space with furniture and a 42-inch flat screen TV. The kitchenette features a microwave and refrigerator, and each unit also has a washer and dryer.
At Auburn and Alabama, most, but not all, students move off campus after their freshman year. There’s ample off-campus housing stock in both cities. But that can cause some concerns.
Jim Andrews says the City of Tuscaloosa is using planning and zoning regulations to put the brakes on housing developments geared to students because of the mushrooming growth of these facilities. (See “The Crimson Bubble” from March 2014.)
“The effect of it will be to reduce the size, scale and scope of new housing projects,” Andrews says. “It’s been a pretty big part of the student housing story in Tuscaloosa for the past year.”
319 Bragg, in Auburn, “one of the coolest student housing sites you’ve ever seen.”
Off campus living in Auburn
Among the upscale offerings in Auburn is The Veranda, located about a mile from campus.
“We’re open to anyone. We’re mainly geared to college students,” says Joseph Smith, Veranda leasing agent. The community has 96 units and 368 beds and is more than 92 percent full.
“We’ve already had 45 sign up for next year and it’s not even time for renewals yet,” Smith says. It’s because, he says, Veranda prides itself in offering not only superior apartments, but also a quality lifestyle that is designed for everyone and especially for students.
“We offer convenient individual leases, roommate matching services and resident activities,” he says.
Meradith Dunn, manager of Creekside at Auburn, says the condominium development began leasing in 2007. Currently all of the 360 cottage concept homes are privately owned, and provide 1,119 beds.
A homeowners association makes sure the Creekside amenities don’t fall behind newer developments, Dunn says.
In addition to endless amenities, Dunn says that Creekside has a homey feel, too. “We have always prided ourselves on being a front porch community,” Dunn says. “And it’s true; I see it every single day.”
Dunn says community engagement with a monthly meal and special events help bring the neighborhood together. It’s those extra touches, she says, that make Creekside special. For example, during finals week, study areas are supplied with snacks and coffee at all times.
The Retreat is the first cottage-style student development in Tuscaloosa.
Off campus living in Tuscaloosa
The Retreat at Lake Tamaha was the first cottage-style development in Tuscaloosa, built in two phases starting in 2009. Phase 2 was completed in 2010, says Rob Dinwiddie, the Retreat’s director of marketing and leasing.
Located two miles from campus, the community offers 1,306 beds. The Retreat offers a private shuttle service between the clubhouse and campus in addition to a poker room, theater and PGA-quality golf simulator. Plus it has acres of green space overlooking Lake Tamaha.
“The University of Alabama market has experienced great enrollment growth over the last 10 years, so it was an attractive market,” Dinwiddie says. “Despite the addition of thousands of beds to the University of Alabama market since 2010 our cottage units appeal to all college students and our amenity package at The Retreat is second to none.”
Then, there’s the Bluff at Waterworks Landing, located just a half-mile from the University of Alabama. Three of the apartment buildings back up to a wooded nature preserve and two buildings overlook the river. There are 162 units with 309 beds.
“It’s very important we offer the caliber of housing that top students want and have come to expect because we gave it to them,” says Bernard Harwood, Bluff manager. “If you look at the dorms on campus that they are coming out with, they are exquisite and the students now have a benchmark to work with for what they expect.”
Even more modest apartment communities offer gyms, clubhouses, study lounges and computer rooms, he says.
The Bluff, built on the site of the old waterworks plant, makes good use of the aquatic theme with an exterior fountain, natural brook, a waterfall within the clubhouse, which leads to the city’s only infinity edge pool, overlooking the river.
“It may feel like an over-the-top resort to some,” Harwood says. “But for the students, it’s what they have come to expect.”
Wendy Reeves is a freelance writer for Business Alabama. She lives in Huntsville.