University of Missouri Columbia Student Housing

Analysis

Defining “Student Housing”

• Primarily an Undergraduate clientele (95+%)

• Graduate students mostly do not live in Student Housing

• Non-students mostly do not live in Student Housing

• Student Housing Complexes that were built in the past 10 years are almost all “purpose-built” for Undergraduates

• Includes amenities such as exercise, study center, pools

• May include constant transportation to and from campus and downtown

• Significant percentage of units are 4-bedroom

• Older Student Housing includes:

• Well located, old houses and apartments

• Older duplexes and apartments that are marketed to Undergraduates

Defining Student Housing Current Demand

• Student Housing demand cannot be determined by MU total enrollment.

• Mizzou could grow to 38,000 and not create new Student Housing demand

• 95+% of Student Housing demand is Sophomores, Juniors, and Seniors, therefore enrollment by class must be analyzed.

• MU has published current enrollment of 34,658 of which 32,456 are on campus students. (MU Division of Enrollment Management)

• 7,449 Freshmen live in the dorms

• 1,251 First Professionals (Do not live in Student Housing)

• 4,636 Graduate Students (Do not live in Student Housing)

• 2,473 Greek Students (Live in Greek Housing)

• Real Total Demand for Off Campus Student Housing is 16,647 undergraduate students (Columbia and Stephens Colleges students do not significantly inhabit Student Housing)

Defining Student Housing Current Supply

• Rather than list each and every Student Housing Complex, we look to an independent, third party Moore & Shyrock Fall 2013 Vacancy Report

• They report 4.72% Student Housing Vacancy which equates to an oversupply of 902 beds Fall 2013

• Real Total Supply for Off Campus Student Housing is 17,549 beds

State of Fall 2013 Student Housing Market

16647

17549

902

13000

14500

16000

17500

19000

2013 Student HousingDemand

2013 Student HousingSupply

Over Supply

Projecting 2014 Student Housing Demand

• Existing 2013 demand was 16,647

• There are 257 fewer Freshmen graduating 2014 (Refer to University of Missouri’s Registrar )

• Estimated 2014/2015 School Year demand is 16,390 • Note: Other factors such as transfer students, retention rates, etc are assumed to be the same as

2013.

Projecting 2014 Student Housing Supply

• 2013 Existing Supply was 17,549 beds

• New Supply: • 552 beds - Den

• 184 beds - Bengal Ridge

• 224 beds - Midtown

• 108 beds - Log Hill Off College

• 43 beds - Beals on 9th

• 1,111 Total New Beds for Fall 2014

• Real Total Supply for Off Campus Student Housing in 2014 is now 18,660 beds.

Projected Fall 2014 Student Housing Market

16390

18660

2270

13000

14500

16000

17500

19000

2014 Student HousingDemand

2014 Student HousingSupply

Over Supply

The Projecting Student Housing Demand 2015 and Beyond

• MU recently stated the desire to grow to 38,000, but this does not necessarily equate to an increase in student housing demand.

• Frankie Minor, Director of Residential Life at the University of Missouri, stated at Mizzou’s 2014 Off Campus Student Housing Forum that they are planning for flat growth and will only be adding a net of 200 beds to dormitories in the foreseeable future.

• Vice Chancellor Cathy Scroggs stated at the same forum that Mizzou is looking to graduate students to provide the growth they’re after. These students do not usually reside in purpose-built student housing.

The Projecting Student Housing Demand 2015 and Beyond

• The state of Missouri population by age paints a bleak picture for increasing Student Housing demand

Source: US Census Bureau

70,000

72,000

74,000

76,000

78,000

80,000

82,000

20

15

20

16

20

17

20

18

20

19

20

20

20

21

20

22

20

23

20

24

20

25

20

26

20

27

20

28

20

29

20

30

Missouri 18 yr olds

The Projecting Student Housing Demand 2015 and Beyond

• MU has been successful in increasing out of state enrollment for the past decade

• More schools are now committed to recruit out of state as well, unfortunately the available pool to draw from is decreasing

Source: US Census Bureau

3,800,000

3,850,000

3,900,000

3,950,000

4,000,000

4,050,000

4,100,000

4,150,000

4,200,000

4,250,000

20

15

20

16

20

17

20

18

20

19

20

20

20

21

20

22

20

23

20

24

20

25

20

26

20

27

20

28

20

29

20

30

United States 18 yr olds

Conclusion and Strategy

• Every University market we have visited for the past 2 years state they will increase enrollment by recruiting out of state. Obviously, not all Universities are going to be successful due to the decreasing pool of graduating high school Seniors nationwide.

• Mizzou has a great track record and is definitely attractive, but as it pertains to Undergraduate growth we need to wait and see what happens.

• With over 2,000 vacant beds it does not make sense to add significant supply

• Cancel 1,200 beds planned for South of campus indefinitely

• Be very selective, A+ locations only for any additional small bed-count projects

• Wait for obsolescence of older properties (4-8 years) before considering any large projects

• Be ready to purchase distressed properties that may be operating at a loss

Sources

• US population by age:

• http://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?src=bkmk

• Missouri Population by age:

• http://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?src=bkmk

• MU Enrollment Statistics:

• http://enrollment.missouri.edu/Reports_and_Data/enrollment_summary_fs2012.php

Sources

• Moore and Shryock Fall 2014 Apartment Survey