LAKE TAHOE COMMUNITY COLLEGE S T U D E N T H O U S I N G M A R K - - PowerPoint PPT Presentation

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LAKE TAHOE COMMUNITY COLLEGE

S T U D E N T H O U S I N G M A R K E T A N A L Y S I S P R E S E N T A T I O N O F F I N D I N G S D E C E M B E R 1 3 T H , 2 0 1 6

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SCOPE & SCHEDULE

S T U D E N T H O U S I N G D E M A N D A N A L Y S I S

Phase 1: Operational Assessment Phase 1: Operational Assessment

Project Initiation  Demographic Analysis Off-Campus Market Analysis 

June-August Phase 2: Detailed Market Analysis Phase 2: Detailed Market Analysis

Student Focus Groups Survey Implementation + Analysis Market Demand Analysis

October September October Phase 3:

Synthesis + Recommendations

Phase 3:

Synthesis + Recommendations

Financial Analysis Support Facility Analysis 

November November - December Phase 4:

Documentation

Phase 4:

Documentation

Decision Support + Documentation Final Presentations Final Report

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MARKET ANALYSIS

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2,409 2,354 2,063 2,038 1,633

Fall 2012 Fall 2013 Fall 2014 Fall 2015 Fall 2016

TOTAL ENROLLMENT

D E M O G R A P H I C A N A L Y S I S

32%

Decrease in fall enrollment

• ver the past five years

*Figures only reflect fall 2016 in-person enrollment.

Overall college-wide demographic makeup is positive Total enrollment must be monitored during the life of the project to ensure its viability

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FINDINGS

F O C U S G R O U P A N A L Y S I S

 Campus life

– Students chose LTCC for its natural beauty – Highly satisfied with educational experience

• Small student-teacher ratio

– Indicated that small campus population limited sense of community on campus

 Off-campus market

– Process of finding housing very difficult

• Limited offerings – forced into motels/homeless
• Competition from vacationers
• Predatory property managers

– Available housing in poor condition – Impactful on ability to work and study

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INTEREST IN HOUSING

F O C U S G R O U P A N A L Y S I S

 Interest in LTCC Housing

– Overwhelmingly in support of campus housing – Students are very price sensitive

• Currently pay $300-$500

– Interested in whichever version allowed LTCC to keep the cost of housing low

• No need for apartments, double occupancy

 Amenities and Features

– As few amenities as possible if it kept the price of housing down – Basic amenities

• Lounge and study space were most critical

– Academic year leases

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OVERVIEW

O F F - C A M P U S M A R K E T A N A L Y S I S

15

Multi-Family Properties Surveyed

1.6 Miles

Average Distance of Properties from Campus

51

Average Age of Multi-Family Properties

Years Old

$785

Average Rental Rate per Person per Month

45

Average Age of Multi-Family Properties

Years Old

10

Single Family Properties Surveyed

1.7 Miles

Average Distance of Properties from Campus

$615

Average Rental Rate per Person per Month

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MARKET TYPE

O F F - C A M P U S M A R K E T A N A L Y S I S

Student Averse

 Discourages Students  Requires Credit Check  12-Month Leases  Few Student Amenities  General Market Focused

Student Friendly

 Welcomes Students  Many Student Residents  Some Student Amenities:

– Fitness Center – Swimming Pool – Some Flexible Lease – Parental Lease Guarantee – Some Furnished Units

Student Focused

 Built for Students  Only Students Residing  Student Amenities  Individual Lease  Roommate Matching  Academic Term  Full-furnished  Community Space  Walk to Campus

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ATTAINING HOUSING

S U R V E Y A N A L Y S I S

 Market Conditions – How easy was it for you to

attain housing?

Nearly 66% of students found it difficult to attain housing

10% 25% 39% 26%

Very easy Easy Difficult Very difficult Off-campus Renters

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IMPACT OF HOUSING

S U R V E Y A N A L Y S I S

 What kind of negative impact has renting in the off-

campus market had on your academic pursuits?

53%

Of students felt a severe/moderate negative impact on their studies

13% 40% 23% 24% Severe negative impact Moderate negative impact Minor negative impact No impact Off-campus Renters

51% of students living at home felt no impact on their studies

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 Market Conditions – Rental Rates

1% 1% 11% 23% 15% 14% 10% 7% 6% 3% 4% 2% 1% 2% 1%

< $99 $100 - $199 $200 - $299 $300 - $399 $400 - $499 $500 - $599 $600 - $699 $700 - $799 $800 - $899 $900 - $999 $1,000 - $1,099 $1,100 - $1,199 $1,200 - $1,299 $1,300 - $1,399 $1,400 - $1,499

$569

Average Rent

$111

Average Utilities

$680

Average Monthly Cost of Living

RENTAL RATES

S U R V E Y A N A L Y S I S

Nearly 40% of students are in a lease of one year or more Students indicated in focus groups that $300-$500 was affordable

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INTEREST IN HOUSING

S U R V E Y A N A L Y S I S

How likely would you be to live in LTCC student housing if it were available?

26% 24% 22% 8% 21% 32% 24% 21% 10% 13% Very likely Somewhat likely Neutral Somewhat unlikely Very unlikely

Off-campus Renters Lives with Guardians

Approximately 42% of PT students would change to FT-status if housing was present More than 50% of neutral students were unlikely to raise their rent to live on campus

Which year(s) would you choose to live on campus (Select all that apply)? 1st Year 2nd Year 3rd Year +

71% 56% 46%

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FUTURE ON-CAMPUS HOUSING

S U R V E Y A N A L Y S I S

68%

Flexible payment terms

67%

Flexible occupancy terms

62%

Ability to retain the same living unit from year to year

Which personal preferences would be the most important to you?

26%

Availability of maintenance and custodial services

Factors LTCC Should Consider When Developing Housing Most Important Physical Features to Consider with New On-campus Housing

62% 60% 47% 41%

99%

90% 86% 84%

Keep Housing Costs Affordable Academically-focused communities Make LTCC attractive to new students Provide attractive living environments

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DEMAND ANALYSIS

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PROCESS/METHODOLOGY

D E M A N D A N A L Y S I S



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 unit type preferences to the LTCC population.



Students were shown sample unit types and price points to indicate preference.



A series of filters are then used to isolate a likely target market to project a range of demand



An Occupancy Coverage Ratio is applied to mitigate

• ccupancy risk.



Students not interested in housing had the ability to decline all housing options on survey

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Age Current Enrollment Capture Rate Total Demand Occupancy Coverage Ratio Recommended Program 17or under 42 3% 1 1.20 1 18-19 258 15% 38 1.20 32 20-24 434 13% 55 1.20 46 25-29 230 21% 49 1.50 33 30-50+ 669 19% 125 1.50 83 Total 1,633 16% 269 195

RECOMMENDED PROGRAM

D E M A N D A N A L Y S I S

Target market demand can accommodate between 80 to 95 beds

Target Market Demand (beds) 79

“Living with guardian(s)” did not meet the criteria to be included Semi-suite (double) units and cooperative housing were most popular

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DEMAND CONSIDERATIONS

D E M A N D A N A L Y S I S



Sufficient overall demand for new housing on campus across all age ranges (269 beds)



Recommended program for target market is 80 to 95 beds, potential for capturing non-target market students exists



Students living at home with parents did not meet the criteria to be considered in our demand analysis



A facility of approximately 100 beds allows for a more conservative project, while stimulating demand for future phases



LTCC should reevaluate the scope and scale of the project if in- person enrollment continues to decrease

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FINANCIAL ANALYSIS

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MODEL OVERVIEW

F I N A N C I A L A N A L Y S I S

50-Year Operating Pro Forma – Three Scenarios

• Designed to test feasibility for individual project
• Allows for testing of various ‘large scale’ assumptions
• Fee increases
• Revenue Assumptions
• Cost Assumptions
• Program Strategies
• Tests the implications of three financial delivery scenarios
• Self-finance Model
• 501(C)(3) – Foundation Model
• Equity Model

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PROJECT PROGRAM

F I N A N C I A L A N A L Y S I S

Units Unit SF Total NASF Total Beds NASF/Bed Semi-Suite - Double Unit A: 2 Bed / 1 Bath Semi-Suite (single) 15 450 6,750 30 225 Unit A: 2 Bed / 1 Bath Semi-Suite (double) 17 630 10,710 68 158 RA Unit 1 450 450 2 225 Total 33 17,910 100 Community Space (i.e. laundry, study, lounge, etc.) 3,970 Administrative Space 670 Custodial 280 Maintenance 300 Total Building NASF 23,130 Non-assignable Space 8,995 Building Core & Circulation Efficiency 72% Total GSF 32,125 GSF/Bed 321

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FINANCIAL MODELS

F I N A N C I A L A N A L Y S I S

District / College 501(c)(3) Equity Owner of Improvements District / College 501(c)(3) Developer Control of Improvements High Moderate Low Control of Operations High Moderate to High Low to Moderate Residence Life District / College District / College or 3rd Party District / College or 3rd Party Construction Type Steel to Masonry Wood to Masonry Wood to Masonry Speed of Delivery Can be Slower Typically Faster Typically Faster Cost of Capital Low Low to Moderate Moderate to High Tax-Exempt Debt Yes Typically No Real Estate Taxes No Typically No Yes Ground Lease None 30-40 Years 50+ Years Balance Sheet Impact Yes Maybe No Maybe No Credit Impact Yes Yes Likely Yes Financial Return Waterfall Waterfall Ground Rent + Net Revenue Share Financial Constraints 1.0x DCR 1.2x DCR IRR of ~10%

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VALUE FOR MONEY

F I N A N C I A L A N A L Y S I S

Cash flow to College is lowest in an equity-financed project

$0 $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 $3,500,000 $4,000,000

2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 2050 2051 2052 2053 2054 2055 2056 2057 2058 2059 2060 2061 2062 2063 2064 2065 2066 2067 2068 2069

Self-finance 501C3 Foundation Model Equity Model

Rental rates to students are lowest under the equity-financed project

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CONSTRUCTION SCENARIOS

F I N A N C I A L A N A L Y S I S

Variance in hard costs are due to potential premiums of DSA review and Tahoe region. Market responses to this project will provide a greater understanding of potential costs

Cost per Square Foot Scenarios Hard Cost / Square Foot $200 $275 $350 Project Budget $9,816,000 $12,457,000 $15,099,000 Rental Rates 2 BD / 1 BA Semi-suite - Single $1,000 $1,120 $1,280 2 BD / 1 BA Semi-suite - Double $815 $913 $1,043

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CONSIDERATIONS

F I N A N C I A L A N A L Y S I S

 Housing rates to students are lowest in an equity

model

 There is no guarantee the College will receive a ground

rent due to how the deal is structured

 Rates can be lowered through:

– Master leasing community space in facility – Receiving financing from US Department of Agriculture

 Project may be too small for larger developers, but not

smaller regional practices

 Preliminary analysis of additional support costs range

between $300,000-$400,000

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NEXT STEPS

S T U D E N T H O U S I N G D E M A N D A N A L Y S I S

 If the Board moves forward with the project:

– Issue Request for Qualifications from potential developers (February – April 2017) – Begin selection of qualified developers and invite them to complete a Request for Proposals (May – August 2017) – Engage with development team whose proposal best meets the goals and needs of LTCC (September – October 2017) – Projected opening fall 2020

 This process is non-committal until agreement is

established with development team

 Additional analysis should be considered related to

campus foodservice