Student Housing Business

JUL-AUG 2018

Student Housing Business is the voice of the student housing industry.

Issue link: https://studenthousingbusiness.epubxp.com/i/1017338

Contents of this Issue

Navigation

Page 38 of 104

THE SHB INTERVIE W July/August 2018 StudentHousingBusiness.com 38 square footage to them as we have in the past. From a unit design standpoint, our units are a little tighter than they used to be. We used to average close to 1,400 square feet for a four-bedroom unit, but now we're building a lot of 1,250 square-feet to 1,325 square-feet four-bedroom units. Most of that space is coming from the bedrooms, where students tend to spend less time. SHB: How else are you combat- ting the high cost of construction? Rogers: We have our own general contracting firm, which we feel is a huge competitive advantage for us. We also have in-house archi- tects who manage the outside architects we use. Our develop- ment team works in conjunction with our consultants, in-house design team, outside architectural firm and our construction com- pany to create an efficient design early in the process. Being a large contractor, we have a lot of good relationships with subcontractors that we can lean on because we give them repeat business. We also have an import company we cre- ated a few years ago that allows us to import our own countertops, cabinets, and furniture. We are now also getting into plumbing fixtures and lighting fixtures and exploring other building materi- als we can standardize and buy in bulk. The affiliated import busi- ness, D12, enables us to cut out a lot of the middlemen, delivering high quality finishes at a signifi- cantly lower price than we other- wise would be able to. Given the success we've had with our own projects, D12 is beginning to offer its products and services to other developers. SHB: Have you ever considered allowing your general contracting firm to build for other developers? Rogers: We potentially would, but I don't see it happening anytime soon. Our construction guys are so busy with what we have going that they do not have the capac- ity. We have a great construction group but continue to have a hard time finding good construction talent — and we're committed to only hiring the right people — so our guys are probably running a little thin right now. Even if we wanted to, we can't effectively build everything we're develop- ing. We are the general contractor on about 70 percent of what we are building, which is down from around 90 percent or more in pre- vious years. SHB: What is on your plate right now? Rogers: Since Landmark is the developer, owner, investment manager, general contractor, and property manager, I have to spend my time on a lot of different things. Our team is doing a great job on execution, though, which allows me to spend a lot of my time focusing on new opportuni- ties and our overall strategy. I also spend a lot of time on the capi- tal markets side of our business working with our various equity partners and lenders. SHB: You have brought on a lot of strong industry executives over the past few years, and you've launched a third-party manage- ment division. Can you tell us about that division? Rogers: We started third-party management when we were still a merchant developer. Our port- folio would vary from 6,000 to 12,000 beds per year depending on what we sold each year. At that size, we had some challenges. Our on-site employees saw that we were constantly selling assets, so we had a hard time retain- ing top quality on-site and cor- porate talent on the management side of our business. We also saw that we were losing money on our management business with so few beds and were unable to have a lot of the corporate resources that some of our competitors had. We realized we needed to aver- age around 20,000 beds to have the resources we wanted while also turning a profit in that busi- ness. We set out to do third-party management to grow the scale of that business. We also aligned ourselves with longer-term capi- tal that is enabling us to grow our own portfolio. In our third-party management business, we don't just take on any client. We are gen- erally looking for larger portfolios or some type of strategic partner- ship where we can add signifi- cant value. We excel at new con- struction lease-ups because of our background in new development. SHB: Your corporate office is dif- ferent than many student housing developers; tell us about how you came up with the idea? Rogers: About a year ago, we moved into The Mark at Athens, a large, mixed-use development we built in downtown Athens near the University of Georgia. The project has about 82,000 square feet of commercial space, 928 beds of student housing and about 1,300 parking spaces. For the commercial space, there is about 44,000 square feet of office space and about 38,000 square feet of retail space. We designed the office space as the home of our corporate headquarters, which is approximately 40,000 square feet. It was somewhat of a challenge to design a truly class A office space in the context of a mixed-use stu- dent housing community, but I think it turned out well. The proj- ect has been a great success from a student housing standpoint. We are 100 percent preleased for this fall with solid rent growth, and the office space is nearly full. We've also signed on multiple new retail tenants over the past few months. SHB: What are your thoughts about the on-campus market? Rogers: We have looked at it extensively over the years. Candidly, we don't think you can generally achieve the same level of risk adjusted returns on-campus today that we see in off-campus development. If you can develop close to a major uni- versity, you are generally going to have a comparable location to what can be built on-campus — and often your location is bet- ter if you're close to the popular nightlife, retail and dining. If you are building on-campus, howev- er, there are all kinds of challeng- es. You are likely to go through a time intensive RFP/RFQ process that could take years. The uni- ARE YOU READY FOR THE ELAUWIT EXPERIENCE?

Articles in this issue

Links on this page

Archives of this issue

view archives of Student Housing Business - JUL-AUG 2018