Student Housing Business

JAN-FEB 2018

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

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RETAIL January/February 2018 77 order for the retailer to be success- ful in the long term." In some cases, the munici- palities in which developers are building require ground floor retail. This can necessitate creativ- ity on behalf of the developer in order to design successful spaces that are resilient through down periods like summer break, where student housing communities are sometimes largely uninhabited. "Most municipalities we devel- op in require some amount of ground level retail space for new construction projects located in areas desirable for high-density student housing," says Wes Rog- ers, president and CEO of Land- mark Properties. "The require- ments can range from as little as a few hundred square feet to over half the ground level square footage of your building. We are not retail experts and often what makes a good student housing location doesn't necessarily make a good retail location. Despite this fact, we have amassed near- ly 250,000 square feet of ground level retail in our portfolio — all of which is in the ground level of our student housing projects." Mindful Design When dealing with municipal- ity-ordered retail planning, or when a site makes an excellent fit for retail, researching and incor- porating plans for the space is important in early project concep- tualization and tenants should be carefully selected to fit the needs of both the student population and the community. "In our first projects with ground level retail, we candidly did a pretty poor job of integrat- ing the retail from a design stand- point," says Rogers of Landmark. "We didn't consider likely tenant mix, trash, loading, grease traps and exhaust the way we do today. To take all these considerations into account while designing the right student housing com- plex can be complicated and time consuming. We now have a full time in-house retail specialist who spends a lot of time working with our development team on effec- tively integrating the retail into the complex." These design considerations range from incorporating the right level of parking to even plumbing. "When including retail, you have to plan for plumbing, HVAC and electrical," says Greg Faulkner, president of Humphreys & Part- ners Architects. "Some retail ten- ants also have special loading and parking requirements; restaurants need grease traps, trash areas, and makeup air. Our student opera- tors and developers generally are not retail people, so it's an educa- tion process for them on learn- ing the scope, scale, complexity and 'mess' retail can bring to a residential project. Parking layout and numbers increase too when adding different types of retail." William Talbot, executive vice president and chief investment officer of American Campus Com- munities, agrees that careful plan- ning is imperative for success. "You can't just say the space that fits below the residential will be retail space," he says. "You need to consider in-front store park- ing if it's not an urban environ- ment; access; integration within the development itself. Being that the majority of our tenants are food or fast casual concepts, you have to build in the infrastructure for grease traps. You also have to be very thoughtful about how the food exhaust is being handled, how and where to handle trash management and how inventory delivery is handled for the retail itself, especially considering the impact to residents living above the retail space. A lot of those aspects tend to be overlooked in a student housing, mixed-use proj- ect. We work with this on the very front end if we're considering any retail." Choosing The Right Tenants Of equal importance is creating a merchandising mix that works well for the students and the com- munity. "Finding tenants who can not only pay rent but also provide an amenity to the residents is very important," says Scott Barton, senior vice president of acquisi- tions and development for EdR. "The truth is that only a few retail categories are likely to cause a prospective resident to live with us. These would include high frequency shopping experiences such as a grocery store, pharmacy, coffee shop and perhaps a popu- lar local restaurant where a resi- dent might visit more than once a week." "We also focus on concepts that will draw successfully from the surrounding area and not just the development itself," continues Barton. "If a prospective retailer describes their business plan to us and it relies on just business from our property, we tell them they likely won't be successful. The customer base for all our retailers is much broader than just our resident tenant base. In terms of knowing whether the over- all development has been a suc- cess, if you look back at the devel- opment and you feel the retail truly enhances the property, then you have been successful." Rogers of Landmark notes that a national, big box retailer — like Target — is probably the most desirable tenant for a student housing property. Outside of that, food concepts seem to be the most successful and apparel stores seem to fare the worst. "We look into the needs of the community and the students when planning to include retail in a property," says Talbot of ACC. "When you look through our portfolio, our tenant roster The Marshall, located at the University of Minnesota, was developed by EdR and is home to the country's first Target Express. WES ROGERS President and CEO, Landmark Properties SCOTT BARTON SVP of Acquisitions and Development, EdR

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