Student Housing Surviving Pandemic Hit

John Kendrick, director of business development for Landmark Properties Inc., which operates Cottages on Hollywood in Fayetteville, said the student housing complex is faring relatively well despite the pandemic.

Flo Johnson said the University of Arkansas at Fayetteville started making contingency plans for the COVID-19 pandemic way back in March.

Johnson, the university’s assistant vice chancellor for university housing, is responsible for the oversight of some 6,000 students who live on campus in a regular year. This year has been anything but regular, but so far the pandemic’s effects on student housing have not been unmanageable.

Johnson said the university has seen a drop of about 8% to 10% in its student housing numbers. Other student housing operations not affiliated with the university said their drops in occupancy have similarly been modest, and in cases where campuses have closed residence halls, occupancy has increased.

“We began to plan for that back in March when it looked like things were going in this direction,” she said. “It is what we expected. It is not our normal level of occupancy.”

Johnson said the university’s numbers weren’t normal but were good under the circumstances. John Kendrick, the director of business development for Landmark Properties Inc. of Athens, Georgia, didn’t say specifically how occupancy has changed at the company’s two student housing complexes in Fayetteville but said the numbers were consistent with previous years.

Landmark operates Cottages on Hollywood and The Avenue in Fayetteville, complexes that total 369 units and more than 1,200 beds.

This consistency “speaks to the relatively recession proof nature of the student housing industry as a whole,” Kendrick said in an email to Arkansas Business. “At the end of the day, higher education is extremely important and students also want a true collegiate experience. So, even with concerns, we think students want to be in close proximity to their friends, their universities, and still have as much of a collegiate experience as possible during these times.”

Maggie Owens, portfolio manager of Specialized Real Estate Group in Fayetteville, consults with companies that specialize in student housing. She said student housing is much more than a simple apartment complex because developers work hard to blend the college life experience into the facility.

“They’ve done a really good job of establishing a sense of community and providing programming opportunities,” Owens said. “There is not as much of a gap between living on-campus and off-campus now as there was years ago.”

Temporary Adaptations

Johnson said the university took the initiative in its response to the coronavirus’ potential impact on housing.

She said UA Chancellor Joe Steinmetz temporarily suspended the university’s requirement that freshmen students live on campus.

The requirement was for single students under the age of 21 who didn’t have a waiver to live with a parent or legal guardian within 70 miles of campus.

Enrollment at the university was unofficially 27,549 on the 11th day of fall semester classes (Sept. 8). It is the fourth consecutive year the university has had more than 27,500 students; 4,780 of the fall students are freshmen.

The concern was that when classes resumed at UA in the ongoing pandemic, many students would remain home and take online classes from there. As it turned out, high school graduates were, as Kendrick said, looking to experience campus life.

“What I will tell you is we have been contacted by students who said they want to remain home in the fall but they want to live in campus housing in the spring,” Johnson said. “Everybody is kind of riding the wave.”

The university planned for mostly full housing facilities, too.

Johnson said a third-party cleaning service was hired to sanitize high-touch and common areas and bathrooms at the university’s housing units, something she said was a “large investment.”

The university also denied visitors to residences until relaxing those restrictions in the middle of September. Now, each resident is allowed one visitor, as long as that visitor is another student or an immediate family member.

The dining areas have capacity and space limitations, but the university allows students to take meals back to their rooms. That is in addition to the masks and social distancing requirements the university implemented.

“I think things went as well as we could hope,” Johnson said. “We were very heavy on education. It wasn’t a punishment conversation. Staff and faculty have been very compliant, so everywhere they go they’re seeing it.”

So Far, So Good

Lyndy Lindsey of Lindsey Management in Fayetteville was worried in May about whether universities would reopen.

Lindsey’s apartment complexes are in a lot of college towns and, while not specifically student housing, many of the units are rented by college students.

He estimated that nearly one-quarter of Lindsey Management complexes are rented by college students.

Lindsey said vacancy is up at his company’s properties but not nearly to the levels he feared when the pandemic first rolled in.

“For a pandemic, it is probably pretty good,” Lindsey said. “All in all, it has been better than we thought it would be. We were really nervous, but school came back and we’re OK.

“Honestly, by looking at our numbers you couldn’t tell we were in a pandemic. You couldn’t look at our numbers and say, ‘Oh, gosh, what happened here?’”

But Lindsey said the pandemic has affected the company’s new development in Bentonville, Walton Crossing, which caters to the professional crowd associated with Walmart Inc. and its satellites of vendors. Walmart has allowed its new hires to work from home rather than requiring them to move to Bentonville, which has kept Walton Crossing from filling up, Lindsey said.

Owens, the consultant with SREG, said many of the national top student housing companies have complexes in Fayetteville.

Landmark has two and the Cardinal Group of Denver manages three properties and owns a fourth in Fayetteville. Scion of Chicago and Peak Campus of Atlanta also have large properties in Fayetteville.

Owens said vacancy had been higher than normal even before the pandemic. She said that was because, even with all the student housing available, more was being built but the university’s enrollment wasn’t keeping pace.

Occupancy was below 90%, Owens said, which isn’t terrible, but operators would prefer the sweet spot of 94% to 95%.

“There’s a lot of new product coming online for 2021,” Owens said. “It is going to be an evolving market with the dynamics of COVID, and I think we will see a little more vacancy than in years past, unless the university is really aggressive in trying to grow freshmen enrollment.”