Student Housing Business is the voice of the student housing industry.
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TOWN & GOWN STUDENT HOUSING BUSINESS .COM JULY/AUGUST 2015 53 demand and the lack of dedicated student housing in the area. In Ann Arbor, Michigan, Berkadia recently placed under contract Spice Tree Apartments. The property is located four miles from the University of Michigan campus and three miles from Eastern Michigan University in Ypsilanti. The 550-unit property has only 20 percent of its units leased to non-students. Spice Tree is an example of a shadow student property; the complex operates conventionally, but because of its location it is able to ofer students a more afordable option than many purpose-built complexes. Leases are mainly on 12-month terms, with no leases expiring in the fall months, according to Kevin Dillon, a partner with Berkadia who focuses on the con- ventional multifamily market. "This is run as a conventional property with 12-month leases for the most part," says Dillon. "If it were half a mile from either campus, it would be 99 percent student housing and operated completely diferently. The sur- rounding market of Spice Tree is conventional, but it has been operating with some marketing to students because of its location for the past 25 years. It is a low cost provider for student housing in those markets. It is a conventional operation with a student market." Larimer adds that Ann Arbor is typical of many large college markets. When capital for tradi- tional multifamily slowed in 2007- 2008, student housing began to take of. Most of the development in the area became purpose-built student housing. "You weren't seeing much conventional multifamily devel- opment during that time," says Larimer. "What that allowed was the modernization of stu- dent housing on many campuses without having a big impact on conventional multifamily hous- ing. More housing stock was added around universities that freed up conventional space. The multifamily and student housing industries were really lucky as to how the timing worked out on that." Properties that appeal to both students and workforce rent- ers are few and far between say investment sales experts. "Generally, those markets in which there are few purpose-built options for students and where there is a large cottage industry of condos and/or rental homes as well as many multifamily options are where we see crossover most often," says Dorothy Jackman, managing director of the National Student Housing Group at Colliers International. "Those were never ideal prop- erties," says Larimer, referring to properties with both students and local residents. "The two just don't get along. Undergraduates and professionals or families just aren't a good mix." Delivering results To learn more, contact: Todd Goulet at todd_a_goulet@keybank.com or 617-385-6262 Charlie Williams at charles_h_williams@keybank.com or 720-904-4449 Jon Reible, jon_p_reible@keybank.com or 602-778-4092 Visit key.com/realestate Banking products and services are offered by KeyBank National Association. All credit, loan and leasing products subject to credit approval. Key.com is a federally registered service mark of KeyCorp. ©2015 KeyCorp. KeyBank is Member FDIC. ADL8078 20150709-5204 Freddie Mac The Lofts at City Center 1,225 Beds Tuscaloosa, Alabama CMBS Aspen Heights Portfolio 1,438 Beds Mississippi and North Carolina Bridge to Perm Fuse Apartments 489 Beds West Lafayette, Indiana Fannie Mae Supplemental Encore at Sam Houston 528 Beds Huntsville, Texas Freddie Mac 700 on Washington 489 Beds Minneapolis, Minnesota Bridge to Perm Next 389 Beds Tucson, Arizona Fannie Mae Bulk Delivery Facility Pierce Education Properties Portfolio 2,788 Beds Various Locations Bridge Loan Pierce Education Properties Portfolio 2,788 Beds Various Locations