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Thought Leadership
Multi-Family, Student Housing & Senior Living

Navigating P3 and Privatized Student Housing: Key Considerations for Success

With colleges and universities experiencing higher student populations and more costly off-campus housing, on-campus and near-campus housing demand is surging. Public-Private-Partnerships (P3) and Privatized Student Housing (PSH) are two approaches available to Higher Education institutions to provide housing options, often on university grounds, without public funding or debt service.  The distinctions between PSH and P3 for Student Housing lie in their ownership, management, and financing, yet their common goal resides in the solutions they offer.

P3 & PSH has emerged as a compelling and resilient sector, valuable to institutions of higher education for speed to market and market incentives, and to developers and investors for a variety of factors:

  • Student Housing is Still in High Demand: The demand for quality student housing remains strong, fueled by a steady increase in the number of students enrolling in colleges and universities as well as a more diverse student population.   
  • More Stable Than Other Housing Markets: Student housing stands out in the real estate landscape as a relatively stable and recession-resistant sector. During economic downturns, the consistent demand for education keeps enrollment rates steady, ensuring a continuous stream of potential tenants.
  • Investment Portfolios Continue to Target Student Housing: Real estate investors and institutions recognize the value of student housing as a reliable asset class. Many have incorporated student housing properties into their portfolios due to the sector’s consistent cash flows and long-term growth potential.
  • Reduced Funding for Institutions: Many states and educational institutions are facing budget constraints, reduced funding, and higher interest rates.  This often leads institutions to explore privatized housing and public-private partnerships solutions to meet their students’ housing needs without straining their own financial resources.
  • Both Ground Lease and Developer-Owned Land Options: The flexibility of land acquisition options, including ground leases and developer-owned land, allows investors to tailor their investments to suit their preferences and financial strategies.

New student housing options have maintained momentum in recent years in response to increased demand and trends in student housing offerings. Some of the notable trends in housing that have emerged include:

  • More Single Bedroom Units: Students increasingly seek privacy and independence, prompting the development of more individual living spaces. These units provide a comfortable environment for focused study and relaxation.
  • Smaller Clusters of Units: This design fosters a sense of community within the smaller groups, encouraging students to connect and build relationships with their peers.
  • Housing for All Stages: Privatized student accommodation is no longer just for first-year students. It’s now catering to graduate students, non-traditional students, families, and visiting faculty members. This inclusivity reflects the diverse nature of today’s student populations. The Broadview at Vanderbilt is a good example of this trend with its mix of unit types, conference rooms, and 13,000 square foot co-lab.
  • Student Awareness of Sustainability: Many PSH and P3 facilities are incorporating eco-friendly features such as energy-efficient lighting, renewable energy technologies, recycling programs, and sustainable building materials to align with students’ environmental values.
  • Amenities and Dining/Grocery Options: PSH and Purpose-Built Student Accommodation (PBSA) providers are upping their game when it comes to amenities. Fitness centers, study lounges, saunas, pools, game rooms, and even on-site dining and grocery options are becoming standard, offering students convenience and a well-rounded living experience.

Success, in the world of privatized student housing, hinges on a delicate balance of various factors, from financial structures to partnerships and understanding the unique demands of the student housing market. Understanding the art of the deal is key in securing a foothold in the privatized student housing sector and often demands a keen understanding of deal dynamics.

  • Rents for Off-Campus Housing: As rents for off-campus housing continue to rise in many urban areas, PSH and P3 remain competitive options and often have stipulated rental rates at or below market offerings.  This creates value for the institution and renters but put additional pressure on proforma evaluation, and requires an understanding of comparable housing products in the local market.
  • Effective Preconstruction Support: A deep understanding of student housing trends and components that drive effective investment returns is pivotal. This includes maximizing rentable square footage (RSF), aligning amenities with renter demands, and staying ahead of market trends to remain competitive.
  • Cost Modeling Consistency: Consistency in cost modeling is essential. Proforma estimates at conception should align with final construction costs to avoid unexpected budgetary challenges during project execution.  A proven track record of first cost and last cost consistency allows for reliable planning.
  • Schedule Reliability: Time is of the essence in student housing construction. Reliability in adhering to project schedules is crucial to ensure accommodations are available when students need them, and avoid the negative cost and reputation impacts of late delivery.
  • Quality Over Time: Investments in student housing should not be spoiled by excessive maintenance and operating costs over time. Quality construction and durable building elements can minimize ongoing expenses and extend the life of the property and revenue generating period, preserving investment returns.

Privatized student housing continues to flourish due to its persistent high demand, stability even in economic downturns, and the recognition of its value by investors and institutions alike. JE Dunn is a trusted partner with a proven track record of project delivery for over 150 colleges and universities across the country.

With JE Dunn you can expect innovative, efficient, and high-quality construction solutions tailored to the unique needs of student housing projects.

Multi-Family Experience
15,000+ Beds
9 Million Square Feet
150+ Institutions Across the Country
  • Customized Solutions: We offer tailored construction approaches that align with the vision and needs of educational institutions and developers, ensuring the creation of vibrant and functional student living spaces. JE Dunn Capital Partners (JEDCP) also co-invests with trusted developer partners in select real estate projects built by JE Dunn Construction. Click here to learn more.
  • Efficiency and Timeliness: Emphasizing on-time project delivery, leveraging efficient construction methodologies, and managing timelines effectively to meet strict academic schedules and deadlines.  We utilize Last Planner System throughout preconstruction and construction to ensure reliable schedule delivery and coordination of client occupation activities.
  • Quality and Durability: With over 9M square feet of student housing construction experience, we are committed to delivering durable, safe, and sustainable structures that prioritize the comfort and well-being of students while adhering to the highest construction standards.
  • Collaboration and Partnership: We employ a collaborative approach to ensure successful project outcomes. By leveraging Target Value Delivery (TVD) and Lean construction principles, we enable the owner, designer and our construction team to seamlessly integrate their expertise and ensure everyone is pulling in the same direction.  TVD focuses on the goals of client and improves any project type, schedule, and budget especially deadline driven institutional projects.
Matt Vineyard
Vice President

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