1. Project Overview 2. Objectives 3. Key Findings 4. Market - - PowerPoint PPT Presentation

Student Housing West

• 1. Project Overview
• 2. Objectives
• 3. Key Findings
• 4. Market Analysis Detailed Findings
• 5. Survey Analysis
• 6. Demand Analysis
• 7. Next Steps

• Public-Private Partnership

Capstone Development Partners, LLC

• Project is based upon demand findings

from B&D’s 2014 Student Housing Market Study

• 3,073 beds to be delivered by 2022

Undergraduate housing (2,713 beds) Graduate housing (220 beds) Family housing (140 Units)

• Project allows UCSC to de-densify

existing residence halls (773 beds due to overcrowding)

• This study has been commissioned by

Collegiate Housing Foundation for the purposes of project financing.

Project Overview

Student Housing Demand Analysis

• Update the 2014 Student Housing Market Study to secure project.
• Confirm demand for campus housing at the proposed rental rates.
• Understand demand by housing type to refine the overall project program.
• Assess the nature of the off-campus market and compare rental rates to those

proposed for Student Housing West.

• Confirm that the proposed project will not negatively impact existing housing.

Student Housing Demand Analysis

• Enrollment continues to increase while housing supply has remained constant placing significant

pressure on the UCSC community.

• UCSC has added more than 2,400 beds of residential density within existing halls, which impacts the

available community space and the overall student residential experience.

• Overall on- and off-campus housing satisfaction is low and has declined since 2014 – illustrating the

challenges the UCSC community experiences living in Santa Cruz.

• Demand exists for 13,102 students to live on campus:

⎼ 11,626 undergraduate beds ⎼ 1,066 graduate beds ⎼ 310 family units

• Unmet demand totals 1,660 after new Student Housing West beds and de-densification are factored.
• De-densification of existing residence halls can be used to mitigate occupancy risk during the

Student Housing West absorption period.

• The proposed single occupancy Student Housing West rental rates are very competitive with the off-

campus market.

• UCSC students are very price sensitive – all decisions should be made to minimize the impact on

rent.

Market Analysis

• Enrollment continues to grow, placing significant pressure on the University, its

housing system, and the Santa Cruz community.

• Housing occupancy has remained strong, operating at an average of 97% of

all available housing beds since 2012.

• The Santa Cruz off-campus housing market is challenging due to poor quality

and quantity of housing stock, high rents, and policies that are not student tenant friendly.

• UCSC has increased housing capacity by densifying existing residence halls

through the use of triple occupancy units and converted lounge spaces. Densification has created an operational challenge and impacted the student experience.

Market Analysis

15,695 16,277 16,231 16,962 17,577 1,508 1,589 1,637 1,821 1,880 5,000 10,000 15,000 20,000 25,000 2013 2014 2015 2016 2017 Undergraduate Enrollment Graduate Enrollment

+12%

Undergrad Enrollment Since 2013

+25%

Graduate Enrollment Since 2013

Enrollment growth without corresponding housing supply growth is placing significant pressure on UCSC

Source: UCSC Common Data Sets Available from UCSC Institutional Research, Assessment, and Policy Studies

Market Analysis

97% Full Time 3% Part Time 51% Female 49% Male *Full time population has been increasing over the past five years by 12%. *Percentages of female population decreased by 3%

• ver the past seven years.

6.0% Other 4.0% African American 1.0% Alaskan/Native 28% Asian 28% Hispanic/Latino 31% White 2.0% Unknown 22% Freshman 19% Sophomore 23% Junior 26% Senior

UCSC’s student academic and demographic profile are consistent with those who would likely live

• n campus

10% Graduate

90%

First to Second-Year Retention Rate

71%

6-Year Graduation Rate (up 2% from 2006 cohort)

3.75

• Avg. High School GPA

(Up 3% from 2013)

Source: UCSC Institutional Research, Assessment, and Policy Studies

Market Analysis The additional residential density impacts the student residential experience and creates logistical challenges for UCSC

Capacity 7,060 Additional Density 2,278

Total Beds 9,338 College Facility Capacity (Beds) Additional Density (Beds) Other Adjustments Operating Capacity (Beds) Cowell College 639 241 (6) 874 Stevenson College 597 305 (3) 899 Crown College 635 290 (91) 834 Merrill college 686 114 (2) 798 Porter College 705 134 (3) 836 Kresge college 385 135 (20) 500 Oakes College 565 216 (1) 780 Rachel Carson College 626 255 (12) 869 College Nine 698 340 (10) 1,028 College Ten 417 205 622 Transfer Community 408 131 539 The Village 153 153 Rewood Village 115 36 151 University Town Center 108 29 137 Graduate Student Housing 82 (2) 80 Camper Park 42 42 Family Student Housing 199 (3) 196 Subtotal 7,060 2,431 (153) 9,338

Student Housing West allows UCSC to de-densify existing housing by up to 773 beds

Market Analysis

97% 96% 98% 96% 96% 99%

2012 2013 2014 2015 2016 2017

With added residential density, UCSC operated at 127% of original design capacity within the existing residence halls. Housing Occupancy of Available Beds

Market Analysis

Population 62,752 Median Age 28.7 Non-Family Households 40% Total Housing Units 23,499 Owner Occupied 44% % Multi-Unit Structures 33%

Source: 2015 5-year census at censusreporter.org

Santa Cruz is considered a student-averse market because landlords do not have student-friendly lease terms, the limited supply of housing, high rental rates, and a challenging town-gown relationship.

• Survey of 7 comparable multi-

family properties

• 904 units
• Average property is 129 units
• 3.1% vacancy
• Multi-family properties generally

have limited amenities:

⎼ Fitness Centers ⎼ Outdoor patios with grill areas ⎼ Fenced picnic area ⎼ Washer / dryer in unit ⎼ Trash removal ⎼ Limited off-street parking

Market Analysis

Source: REIS Q1 2018 data of comparable properties to the SHW Project

Property UC Santa Cruz

Rental Rate Per Unit Per Month There is a scarcity of three and four-bedroom units within the market. Larger units are attractive to students because they can spread the cost of rent among more people.

Source: REIS Q1 2018 data of comparable properties to the SHW Project

• 420 proposed / under

construction units in Santa Cruz

• Mix of multi-unit apartments and

townhouses under permit / review

• New units are not directly

intended for UCSC students

Market Analysis

Proposed Projects UC Santa Cruz

Market Analysis

230 Grandville Street

• Address: 350 Ocean Street
• 12 3BR apartments
• Status: Under construction
• Delivery: TBD

Upper Crust Apartments

• Address: 2415 Mission St
• (8) 1BR, (4) 3BR, and (2)

2BR units

• Status: Under review
• Delivery: TBD

716 Darwin Street

• Address: 716 Darwin

St

• 15-unit apartment

building

• Status: Permits

approved

• Delivery: 2018

River Street Townhomes

• Address: 232 River St
• 12-unit residential

development

• Status: Permits

approved

• Delivery: TBD

Students are generally not the target market for new housing development in Santa Cruz.

Source: City of Santa Cruz, Planning and Community Development Market

Market Analysis

Proposed Graduate and Family units at Student Housing West are priced competitively with the average off-campus rental rates.

Survey Analysis

Importance of the availability of housing in decision to attend UCSC

3,352

Total Responses

17% of Survey Sample 89% 55%

Undergrad Graduate

Percent Complete 86% Confidence Level 95% Margin of Error 2%

Survey Analysis

The steep decline in off-campus housing rate satisfaction suggests that students do not see the value in their housing situation as evidence by the decline in all other factors. On-Campus Residents Off-Campus Residents

63% 86% 86% 88% 88% 33% 57% 60% 57% 60% Housing Rate Amenities / Services Size of Unit Physical Condition Overall Satisfaction 2018 2014 28% 71% 78% 82% 82% 29% 52% 55% 61% 64% Housing Rate Amenities / Services Size of Unit Physical Condition Overall Satisfaction 2018 2014

Survey Analysis On-campus residents are driven by convenience, cost, and the housing guarantee Off-campus residents are driven by cost, privacy and independence, and transportation to campus

Decision Driver ALL On-Campus Off-Campus 1 Total cost of rent and utilities 65% 53% 89% 2 Proximity to classes 53% 65% 31% 3 Ability to choose my own roommate(s) 30% 26% 40% 4 Housing guarantee for on-campus residents 30% 45% 3% 5 Availability of a kitchen 28% 21% 41% 6 Availability of high-speed Internet 28% 32% 19% 7 Availability of a private (single) bedroom 22% 15% 34% 8 Proximity to, or availability of, convenient parking or public transportation 21% 14% 34% 9 Access to campus dining 21% 32% 1% 10 Availability of convenient laundry facilities 19% 18% 20%

> 10% of the average < 10% of the average

Survey Analysis Affordable housing costs and additional housing options are essential elements to a successful Student Housing West project

Rank Factor Weighted Average 1 Keep housing costs affordable 79% 2 Create more on-campus housing opportunities for currently enrolled students 69% 3 Provide modern and attractive living environments to students 59% 4 Expand existing residential dining programs 53% 5 Create more theme areas around academic programs / interests 46% 6 Create living areas specifically tied to college affiliation 45%

Apartment 33% Single family home 44% Townhouse 12% Duplex/Tri-plex 7% Other 4%

Survey Analysis Housing Type

84%

Live alone or with roommates

3

• Avg. Bedrooms

per unit

54%

Share a bedroom

$87

Self-reported avg. utilities per person per month*

$853

Self-reported avg. rent per person per month across all unit types

$774

Self-reported avg. security deposit per person

* Self reported utilities include internet, electricity, water, gas, and sewer.

Survey Analysis

$812 $817 $851 $865 $911

Townhouse SFH Duplex Other Apartment

$788 $790 $816 $853 $996 $1,085

4BR 5BR+ 3BR 2BR 1BR Studio

Self reported rental rates are below the off-campus analysis due to the large number of students sharing a bedroom and wide range of units in the market

Per person monthly rent by unit size Per person monthly rent by housing type

$940

• Avg. rent + utilities

per person per month (+21% since 2014)

Survey Analysis

Mode Public Transit Drive Alone Carpool Bicycle Walk Vanpool

% Utilize 53% 27% 8% 8% 2% 1%

• Avg. minutes

to campus 33 25 28 31 21 11

• Avg. minutes

to campus (no traffic) 26 21 21 26 21 11 Transportation to and from campus is a significant barrier for off-campus students

Survey Analysis

Rank Feature / Amenity Composite Score 1 Foodservice 71% 2 Quiet study space 67% 3 Group study rooms 57% 4 Cardio 57% 5 Social lounge 56% 6 Multipurpose space for community events 51% 7 Active gaming / recreation 48% 8 Group fitness 48%

Survey Analysis

1% 11% 37% 54% 73% 77% 91%

Other Gaming Television Lounge seating Communal dining table Individual food storage Fully stocked kitchen

6% 51% 56% 63% 67% 78% 81%

Other Moveable furniture Under bed storage Small food storage / pantry Desk Small refrigerator Microwave

Unit Amenities Communal Kitchen / Common Area Amenities Graduate students indicated that they would want to share the common area with no more than nine other people

Survey Analysis

95%

Of respondents do not believe meal plans should be mandatory

Aversion to a mandatory meal plan is reflective of students’ desire for flexibility and independence Interest in a meal plan by student type

Demand Analysis

• Demand analysis is a combination of qualitative and quantitative methods

that are used to inform B&D’s demand model.

• Model projects demand through the extrapolation of survey unit type

preferences to the likely target market of UCSC’s student population.

Demand Analysis

• A. 4BR / 1BA

(Single)

• B. 2BR / 2BA

(Double)

• C. 1BR / 1BA Studio

(Triple)

• D. 2BR / 2BA

(Triple Conversion) $1,621 / person / month $1,424 / person / month $1,143 / person / month $1,084 / person / month

*Tested unit types provided by Capstone and are reflective of the proposed program and representative of 2018 dollars.

Demand Analysis

• A. Studio Apartment

(Graduate)

• B. 2BR / 1 BA Suite

(Graduate)

• A. 2BR / 1BA Apartment

(Family) $1,249 / unit / month $986 / unit / month $1,658 / unit / month

*Tested unit types provided by Capstone and are reflective of the proposed program

Undergraduates

• Demographic Filters

Enrollment full-time Age 18-24 Single, no children

• Housing Filters

All on-campus residents If off campus, students who do not live with parents Currently rent and pay more than $700/month

Graduates / Families

• Demographic Filters

Enrollment full-time

• Housing Filters

All on-campus residents If off campus, currently rent and pay more than $700/month

Demand Analysis

Demand Analysis

Significant increase in potential capture rate of junior, senior, and graduate students.

Demand Analysis

Sufficient demand by unit type exists to support the proposed program at Student Housing West. Demand Analysis