Frat house … just whisper those two little words and watch the neighbours cringe. For many, the mere idea of having a group of university students sharing a home on their street conjures up images of John Belushi’s wild and crazy antics at Delta Tau Chi in the classic 1978 comedy Animal House.
But have no fear, condo developers are doing their best to put drunken toga parties on the back burner. Judging by the new offerings, student living has gone upscale as brand new mid-rise and high-rise buildings sprout up in university towns. Not only are the suites furnished but the amenity spaces boast fitness studios, outdoor lounges and catering kitchens on par with condo buildings typically built for these kids’ parents and grandparents. To boot, investors can snap up a suite or two and then hand them over to a management company that will secure the tenants and cater to their every need.
“It’s an opportunity to own a piece of real estate that is revenue-generating from Day One and we expect it will be occupied for all time,” says A.J. Keilty, president and CEO of Varsity Properties of purpose-built student housing. “Universities are a fairly permanent thing. They don’t really move around or close down that much. In fact, I don’t think I’ve ever seen one [do that]. So when you have well-located real estate — in this case directly abutting and touching campus — you are always at the doorstep of a willing audience and people who need your product.”
Keilty knows of what he speaks, having studied commerce at Queen’s University in Kingston, Ont. while living in a typical frat house: seven bedrooms, one bathroom and masses of garbage. The landlord lived three hours away and didn’t respond quickly when repairs were necessary, he recalls, and that awakened a business idea. For the past 12 years, Varsity Properties has been “building communities for students and providing hotel services,” with 1,333 beds in hundreds of suites currently being managed at purpose-built student condo projects in three Ontario cities.
Right now, Keilty’s team is gearing up for University Studios (universitystudios.ca), an eight-storey, 308-unit building set to rise steps from Oshawa’s Durham College and University of Ontario Institute of Technology (UOIT). The bachelor units, co-developed by Podium Developments and Building Capital, will have suites ranging from 274 to 376 square feet (hence their “SmartStudios” moniker) though each room promises a private bathroom, study area, bed-table combo, storage space plus shared kitchen and washer-dryer. There’s a lounge and kitchen area on each floor for entertaining company, plus ground-floor amenities with four meeting rooms, a fitness facility, outdoor lounge and barbecue area. Once sales launch, in early 2016, parents or investors can pick up units starting at $149,990 and with maintenance fees starting at $115 per month. It’s anticipated each suite will net an average monthly rent of $1,000. Occupancy is Summer 2018.
“So when you have well-located real estate … you are always
at the doorstep of a willing audience and people who need your product.”
With 10,000 undergraduate and graduate students at UOIT and many seeking accommodation nearby, administrators are pleased with the action. Says Murray Lapp, UOIT’s vice-president of human resources and services: “The private sector is providing housing options that meet a variety of UOIT students’ needs, choices that complement the residence options they have on campus. It would be also be prudent for developers to ensure the availability of grocery and other service outlets on the ground floor of new off-campus facilities, where students can work and shop.”
Interestingly, it’s proud Moms and Dads who are pushing developers to build new digs for their kids.
“As parents, if we’re going to invest in our children, we want to give them the best chance of succeeding by putting them in an environment that’s safe and has all the student life programs to make them do well,” says David Choo, owner of Ashcroft Homes, which is behind the 26-storey, 329-unit Capital Hall Condos (capitalhallcondos.com) project, managed by Envie, near Ottawa’s Carleton University. “We see Envie as the brand that takes them from … second-year right to graduation to grad school to young professionals. It’s condo-style living with a ton of amenities all geared to that young adult.”
Choo is heavily invested in Ottawa, having topped off the 30th floor of a student rental building set to open in the spring. He’s now marketing Capital Hall next door, featuring furnished studios, one- and two-bedrooms ranging from 317 to 645 square feet and priced from $179,900 to $350,000 (its three- and four-bedroom units are rentals only). There will be 25,000 square feet of amenities including fitness, party and games rooms, courtyard, bicycle spaces, café, convenience store and a food market. Students will be able to walk, cycle or take the O-Train to school and access a social calendar of cooking classes, skating club and more. Occupancy is May 2018. Envie manages the building, which is 50 per cent sold.
“… If you invest in student condos,” says Choo, “you don’t have to worry how the economy is doing. There’s a steady stream of demand.”
Darryl Firsten, president of In8 Developments, is convinced that investing in student condos is a money-maker. His company has put up eight purpose-built student projects in Waterloo, Ont. Now In8 is touting a 20-storey, 223-unit project called The Capitol Condos (thecapitolcondos.com) near Queen’s, complete with gym, rooftop terrace, study lounge and restaurant. Suites range from 453 to 1,118 square feet and $239,900 to $449,900 with occupancy in September 2018. It’s 50 per cent sold and it’s managed by In8.
“[Investors] get a brand new condo, Tarion warranty, it’s managed, it’s fully rented and furnished,” Firsten says. “It’s a worry-free investment.”
This has Ali Naqvi intrigued. The Markham, Ont., resident, 43, owns several condos and uses a certain calculation to determine worthy investments. This one seems like a good buy, especially because it’s managed by an outside company. Though Naqvi admits he’s a tad wary of renting to students, “I have enough comfort to know that some of the lease agreements that we’re going to do will tie in students and their parents to be responsible for XYZ. So if they destroy the apartment, they’re going to be responsible for it. That’s how I’m going to structure it.”
Source: Suzanne Wintrob, Special to National Post | January 18, 2016