Student Housing Business

MAR-APR 2018

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

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ANCILLARY INCOME March/April 2018 60 Adding Income Through Amenities Owners are generating revenue through the addition of amenities ranging from VIP units to food markets, and through partnerships with service providers. Compiled by Katie Sloan S Student housing properties are ripe with opportunity for generating ancillary income. Residents are often willing to pay extra fees for an improved standard of living, or for simplicity in bill payment and other tasks. Owners and operators are garnering dollars by offering upgraded VIP units with top- of-the-line furnishings and surfaces; adding amenities like food markets, where a percent- age of every purchase goes to the owner; and through partnerships with service providers that run the gamut from simplifying util- ity payment among roommates to liability insurance. Student Housing Business recently inter- viewed several owners, managers and devel- opers to find out how they are gaining ancil- lary income at their communities around the country. SHB spoke with Scott Duckett, chief operat- ing officer of Campus Advantage; Anthony Magnelli, vice president of asset management and business development for Campus First; Scott Casey, chief technology officer and senior vice president of strategic business develop- ment at EdR; Mitchell Smith, chief operating officer at The Scion Group; and Dave Ander- son, president of Homestead U. SHB: What are some of the ways your proper- ties are spinning off ancillary income? Scott Duckett: One way that we create ancillary income is through added amenities like our Fresh Market con- cept. It is an added amenity for the residents where they can get sand- wiches, chips and beverages, and the property receives a percentage of the sale. It has worked really well for us in markets that are cold in the winter where students don't want to ven- ture out, and in markets with a high interna- tional population. Anthony Magnelli: Campus First typi- cally looks for ways to provide additional or improved services to our residents that would be worth the extra cost for them to take on. For example, we have been creating VIP units with a range of improvements including updated flooring, black or stainless appliances and new furniture packages. Residents are getting an improved apartment for an extra charge. We've also created ancillary income through tech fees. We generally do this when we renegotiate our Wi-Fi/cable agreements. If we are providing improved service, we can pass a monthly tech fee onto the resident to not only pay for the upgrade, but also create more income for the property. Scott Casey: We've partnered with a company for utility bill payment that has the utilities turned on, pays on behalf of the resident and individually bills each roommate their share. The residents are charged a monthly fee and we share in that revenue. More importantly, this solves roommate conflicts. We also use virtual gift cards for concessions. The resident receives an e-mail to activate their card. If a card is not activated we receive a portion of that money back. We also have rooftop cell towers at several properties where we receive rent for the space that they take on our roof, and we partner with companies like HD Sup- ply and Sherwin Williams, and add ATMs and vending machines. We get a share in the total EdR gains ancillary income by partnering with companies like HD Supply and Sherwin Williams, and through the addition of vending machines and ATMs. Pictured above is an ATM in the front lobby of The Local Downtown, located near Texas State University in San Marcos. SCOTT DUCKETT Chief Operating Officer Campus Advantage

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