Student Housing Business

NOV-DEC 2015

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

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NOV/DEC 2015 55 MARKETING one or the other. We need to sell the parents on safety and price, while we are marketing a lifestyle to the students. Parents want kids to succeed, and students want to have fun." Rental Concessions With new purpose-built off- campus developments popping up near university campuses each year, signing a tenant in some markets can become a competi- tive process. As a result, student housing operators have had to offer incentives like reduced rental rates for both new signees and returning tenants, gift cards for local retailers worth hundreds of dollars, and other bonuses for signing a lease. Much to the dismay of the stu- dent housing properties' owners, these concessions and the reduced income generated per unit have a negative effect on a property's bottom line. According to Byrley, The Pre- iss Co. has decided to stop offer- ing incentives and concessions. "We're trying to eliminate the smoke and mirrors and capitalize on fnding the right price point that makes the most sense for stu- dents," he says. "You're just kind of fooling yourself if you're trying to get tenants by offering high-dollar gift cards," Byrley says. "It has a negative impact and it teaches students they need gift cards and it's not healthy." Preiss' lease-up as of Nov. 20 was just over 21 percent, a 3 per- cent increase over the same time period last year. "As of the end of November," Byrley says, "we are at a 3.82 percent rental rate increase year-over-year. This goes in line with eliminating low rate renewal outliers." For Horizon, rent concessions have always been very market specifc. According to Bailey, rent concessions were never thought of at the University of Oregon, but with so much new supply having entered the market, it's a consideration. "Big markets with a lot of sup- ply are known for giving out con- cessions, and whether it's a gift card or cash depends on the mar- ket," he says.

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