New Campus Complexes Offer Luxury But Remain Half-Full For Fall
Tyvek homewrap flaps over the unfinished wooden beams of the Luxe Belle, as a sign proclaims "Now Leasing." Another sign entices the first 20 renters with free Taco Bell for a year, a tie-in with the fast-food chain that will occupy the mixed-use development’s first floor.
Right now, though, that first floor is just a large concrete atrium. Like four other luxury apartment complexes near The Ohio State University, this six-story development at North High and 8th Avenue is set to open next fall.
Local developers are building it--will students actually come?
For junior Kiersten Ahrens, who’s still searching for housing for next year, the answer is a definitive "no."
“I would love to live them. They’re in great locations," Ahrens says. "But it’s just so expensive, it’s not even worth it.”
Indeed, rents for the swanky complexes can top $1,500 for a one-bedroom. Managers like Tom Heilman, with Hometeam properties, still think the market is there.
“Let’s just say they’re $1,000 beds when the market’s used to $500 a bed, but you’re getting High Street locations and views, you’re getting amenities, you’re getting granite countertops, flat screen TVs, low utilities, safety, workout areas, and all the other amenities," he says. "And it’s just a fun experience for students that may are gonna experience this for a year or two and the parents are more than happy to do that.”
Other towers plan to offer things like movie theaters and 24-hour doormen. Still, occupancy rates for Hometeam’s two new properties on Lane Avenue - Wilson Place and The Point - are just now reaching 50 percent for next year. Another developer, Edwards Communities Development Co., reports similar numbers for a tower under construction at 15th and High.
Heilman says they’ve had to offer discounts for the first year in an effort to lure students, but he’s confident the market will stabilize when students can actually tour the complexes.
“They’ll meet their budgets. They’ll be fine. Everybody’s gonna be happy. University’s growing, so there will be more demand than less in the next 5 years," Heilman says. "But everything’s short term - people look at things like, ‘Oh what’s going to happen here, what’s going to happen there?' And I think, you have to look, and it’s hard to look, a little bit longer term.”
Heilman says once they’re built, the new luxury units will only make up about 5 percent of the entire campus housing market.
Wayne Garland, president of Buckeye Real Estate, has been in the business for nearly 40 years. He says the shift toward luxury student housing comes in the midst of the most competitive market he’s ever seen at Ohio State.
“Well, I wouldn’t say I’m not worried about losing any business, but I’d say we’re primed to compete very well,” he says.
Of the 1,000 or so apartments Buckeye Real Estate owns, only 10 need to be filled for the coming school year. Garland says that means he doesn’t plan to follow in Hometeam’s footsteps and build luxury apartments any time soon.
“No, that’s not our model. I’m not going to leave our model," Garland says. "We’re going to be at a price point, in general, that’s significantly lower than those properties. And we won’t have the workout facilities or pools or theaters. But we’re going to give you an apartment that has everything you need.”
That’s a sentiment echoed by student Kiersten Ahrens. Her current place is rented through InnTown apartments, and falls under the $600 cap she and her parents agreed on.
“This place has everything I need," Ahrens says. "And yeah, it’d be nice to have a fitness center and a pool and stuff, but they literally say all the time, like, ‘You’re in college, you need the college experience, you don’t need to be living like that when you’re in college, you need to save up and do that later on.'"
Still, developers are betting that enough college students will forgo that classic college experience and fill the thousand-plus beds they’re adding to the Ohio State housing market.