Student Housing Business

JUL-AUG 2018

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

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MANAGING MULTIPLE ASSETS July/August 2018 94 centrated on properties that are close to campus. That means that if it has multiple assets in a sin- gle market, they are all going to be close to campus. That has led to efficiencies in leasing through having a centralized leasing center. "With a median distance to campus of 0.1 miles, most of our assets within the same market are located blocks from each other, facilitating the ability to maxi- mize leasing effectiveness while realizing operational efficiencies without sacrificing the customer experience," says Talbot. "We have experienced benefits in two distinct areas: maximization of revenue and leasing efforts, and operational savings." At ACC's centralized leasing center, the company has invested in technology that allows prospec- tive tenants to view digital and virtual tours of all of the prop- erties within the market, allow- ing leasing agents to market and showcase all properties. "If a potential resident walks in, we can show them everything from our most affordable option to our more expensive options — and everything in between — in a variety of locations and prod- uct offerings," says Talbot. "This reduces multiple tours among our property staff and allows us to have a higher initial close ratio. The centralized leasing also allows us to eliminate multiple model units and return them to revenue-producing units." Market Control In markets where there is an oversupply of student hous- ing, owning multiple properties can be beneficial, say operators. Because assets are often marketed together, the marketing budget can stretch further, and more stu- dents can be attracted to a port- folio of properties; they can be guided by leasing staff to find the one that fits their needs and budgets. College Station, Texas, has seen more than 10,000 beds delivered over the past three years and is oversupplied until enroll- ment at Texas A&M catches up. ACC controls five properties in College Station, ranging from a full-service off-campus residence hall to a townhome-style project with tons of amenities. All of the properties are walking or biking distance to campus. "In the past two years, we have significantly outperformed the market in terms of leasing and rental rate growth, in part by offering highly diverse options to potential residents," says Talbot. For several owners and man- agers, it isn't unusual to control a smaller market. Redstone Resi- dential is the largest off-campus student landlord in markets like St. George, Utah (Dixie State Uni- versity) and Logan, Utah (Utah State University). "There might not be 15,000 beds in these markets, but we control 2,000 or 3,000 of the 4,000 beds in the market," says Collard. For Redstone, sometimes busi- ness begets business in smaller university markets. Owners see how the company markets mul- tiple properties and they want their property to be part of that marketing plan. As a bonus, they often shed the duties of managing a single asset in a market. "A lot of owners have said to us, 'Oh, you guys have the market power,'" says Collard. "A number of people might think that is a conflict of interest to manage for multiple owners in the same mar- ket, but we don't think so if every property is full; additional market power should lift everyone rather than depress the market or create conflicts of interest." Managing in markets has also helped Redstone expand in new markets. The company expanded to Rexburg, Idaho, by manag- ing a few projects third-party for an owner. It liked the market so much it now owns 2,000 beds in Rexburg. Since ACH is the largest third- party manager with over 122,000 beds, it isn't unusual for the com- pany to control three of four stu- dent housing projects in a smaller market. In Mobile, Alabama, for instance, the company at one time operated three of the four pur- pose-built student housing assets. The company is also one of the largest managers in Tallahassee, Florida, San Marcos, Texas, and Denton, Texas. Intangible Benefits While having control of the market is nice, the real benefit to ACC and other owners and managers may be seen on the talent side of the equation. With smaller companies, employees who are tied to a market by a spouse's job, family obligations or other needs, often sacrifice their ability to grow their careers. Larger managers are able to grow those employees within a market because of the company's growth within the market. Talent acquisition and promo- tion becomes very important for many operators when they have multiple assets. "The ability to hire a lot of good talent comes with having multiple assets," says Smith of The Scion Group. "It's not that we are shar- ing talent resources across mul- tiple properties. In some cases, we have more staff in a market with multiple properties than we oth- erwise would have with a single property. The difference is that we can offer someone a regional man- agement role — whether that's marketing, facilities, leasing or operations — and we can't do that when we have a market with one property." That can also lead to talent retention in smaller markets, something that is often difficult with site-level employees. "With an employee who isn't able to travel or can't be gone a few days each month, but who is really talented and capable, we can leverage their skillset and tal- ents across multiple properties by giving them an area-wide role," says Smith. "That's what really drives our economies of scale. The better job we do operating, the spreads on our rents tend to out- perform our peers." Employees in a multi-site market can also help when one property in a market has an opening; employ- ees from other properties can fill in temporarily or expand their roles to fill a need in the company. "When we have open positions, it allows us to have some flexibil- ity to help out with existing prop- erties," says Bonnin. "It allows us to assist another asset until we can find and locate additional talent for that property." SHB ACH manages The Reserve at College Station, a cottage-style student housing community near Texas A&M. The company's offerings in the market range from urban to garden style. Redstone Residential also operates The Ivy in Rexburg, Idaho.

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