Student Housing Business

JAN-FEB 2017

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MARKET PROFILE: COLUMBIA StudentHousingBusiness.com January/February 2017 69 CEO of Holder Properties, which delivered Phase II of 650 Lincoln last fall. The first phase of Lincoln 650 opened for residents in fall 2015, with all 584-beds occupied for the fall and spring semesters of that year. "We've actually developed seven buildings over the last 10 years in Columbia, both in office and student housing," says Holder. "Room for development in the market really depends on the university's growth. If they continue to grow at a fairly healthy pace, which I fully expect that they will, there will be opportunities in the future for student housing." CRG is also set to begin con- struction on a new 16-story tower in between the Central Business District and The Vista enter- tainment district in downtown Columbia in late 2018. "Over the course of last summer we received approvals for our site plan and a zoning variance from the Board of Zoning Appeals," says Russ Caplin, managing director of multifamily at CRG. "The project will be approximately 623-beds. I would expect construction to begin in late 2018 for a fall 2019 delivery." The project, which has yet to be named, will offer amenities includ- ing a swimming pool and podium deck, state-of-the-art fitness center, lounge and coffee area and a vari- ety of study spaces. "I think that there is more room for develop- ment in Columbia," says Caplin. "You have a university that has grown tremendously and contin- ues to add students, inside of a city and a state that is doing very well economically and attracting significant in-migration." The investment in Columbia doesn't stop with student housing — the flurry of on- and off-campus development has been compli- mented with a large-scale redevel- opment plan for the city's water- front, which aims to create a more pedestrian-friendly and enhanced public space for residents and stu- dents, alike. "The city has already approved, funded and is working on a fair- ly significant infrastructure and economic development project along Greene Street," says Brian Eby, senior director, head of CASA acquisitions (a series of multifam- ily housing funds) for TH Real Estate, a division of TIAA. "It is really going to connect the river- front district to the campus itself." Eby notes that the project — which played a role in the institu- tional investment firm's decision to acquire Greene Crossing, a 726- bed community located on Greene Street this year — is being con- structed in phases starting at the campus and moving toward the riverfront. "The riverfront will be the last piece of the project," he says. "It includes a new bridge, which will go over a railroad track. The development is really going to cre- ate one seamless corridor. For the city to get that funded and work in cooperation with the univer- sity, it's a great testament from our perspective in terms of their com- mitment to making sure that the university remains successful." Market Outlook The outlook for Columbia by all accounts is bright — development opportunity continues to be seen, and investor interest continues to escalate. "Our team has had tremendous success in Columbia," says Ryan Lang, executive managing direc- tor of ARA Newmark Student Housing. "In the past six months alone, we've closed over 1,000 beds and almost $100 million worth of student housing assets near the university. The supply and demand fundamentals in the market are strong and the pur- pose-built product, generally, is stabilized and garnering strong year-over-year rental growth." Lang notes that while there has been a shortage of housing in prior years, the current level of devel- opment fits the student popula- tion. "Historically, there has been a shortage of housing in the mar- ket, and therefore the city started incentivizing developers to build new housing through tax credits," he says. "Upon these new deliv- eries becoming operational, the city ended the tax breaks in 2016, which seems appropriate given the amount of beds that are now online and student competitive." Callison of Core Spaces echoes this sentiment, noting that as development continues closer to campus, properties located out- side of the core may struggle in years to come. "I think operators and developers that have a desir- able location and amenities, like our property Hub at Columbia, are going to be the most success- ful in the coming years," he says. "Properties further away from campus are going to struggle. We are currently happy with the number of beds we have in the market." Caplin of CRG continues to see development opportunity on the horizon, barring a slow down in growth from the university. "I think that there will be contin- ued demand, and the pedestrian projects close to campus will con- tinue to do better — getting bet- ter occupancies and better rents than projects not located inside of the pedestrian core," he says. "The university has growth plans of its own, including the addi- tion of new beds as well as some refurbishment or replacement of existing beds, which will only strengthen what it offers. I expect to see continued growth of the university and the student hous- ing market." "The undergraduate class, alone, over the past seven years has bro- ken enrollment records and more undergraduates than ever before have chosen to start living off- campus," reiterates Lang of ARA Newmark. "While this doesn't necessarily invite a flurry of new student developments, it bodes well for the existing housing stock and shows that measured, long- term growth is absolutely sustain- able for the university." SHB Atlanta-based Holder Properties delivered Phase II of 650 Lincoln last fall.

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