Decrease prices or increase amenities? Developers have weighed these options to attract millennials for years now, tending to choose luxury amenities over budget-friendly rates. But those days may be over. Our Chief Investment Officer, Paul Perkins, spoke as a panelist at Bisnow’s Higher Education Real Estate Summit on May 1. The panel discussed the need to engage with Generation Z and find out how their needs and wants differ from those of millennials.
Gen Z Preferences
Millennials are still the talk of the town, but student housing developers need to move on. The fact is, millennials (ages 23-38) are mostly done with college, Perkins pointed out. Generation Z students don’t seem as concerned with luxury. In general, their focus is on schoolwork, and they’d like to see student housing that is supportive of that focus with prices to match.
To address this preference, NB Private Capital is looking through our housing portfolio to see where we can add study spaces. We’re also encouraging student housing providers to work on creating a community. Because while adding study spaces is helpful, that doesn’t address college students’ desire to be part of a larger community. Student housing properties need to feel like neighborhoods.
How to Address These Preferences
What can student housing providers do to help their residents feel part of a community? The panelists had a couple of suggestions.
One idea is to pay attention to which study areas a lot of your residents are involved with and then build relationships with professors in those areas. For example, perhaps several of your apartments happen to be occupied by communication majors. You could invite a few communication professors and host a meet and greet at your clubhouse where students can get to know the professors and other communication students in their apartment complex.
The panelists also strongly urged student housing providers to monitor their social media reputation, including international sites like Weibo, which is popular with Chinese residents. When international students are deciding where to live, your online reputation may be the only factor influencing their decision. And even local students will use social media reviews to make their decision.
Demand for Student Housing May Increase
The panelists discussed a hopeful point: unlike office, industrial and retail spaces, for which we expect demand to decline, demand for student housing may increase when the economy turns south.
“Enrollment is actually negatively related to the economy, because when the job market sags, more people decide to go back to school, so theoretically you will do better in a downturn than with other asset classes,” opined Bisnow attendee Jason Schwarts*, head of student housing for Blue Vista Capital Management.
Generation Z students have different preferences from millennials. By focusing on affordable pricing, study-friendly spaces, and creating a community, student housing providers can help make their properties part of a great collegiate experience for their residents.
* This is the opinion of Mr. Bisnow. While NBPC believes that this statement is historically accurate, there can be no guarantee that future economic cycles or market events will not impact student housing.