Colliers’ John Neal Manning Provides State of the Student Housing Market at CAPRE’s Carolinas Student Housing Forum

RALEIGH, NC – Student Housing is a vertical that’s ripe for the picking, but not all markets were created equally. That’s why CAPRE invited John Neal Manning, Vice President for Multi-Family Advisory, RDU, at Colliers International to provide a morning keynote address titled “State of the Student Housing Market: By the Numbers” at CAPRE’s Carolinas Student Housing Forum.

John Manning, Vice-President, Colliers International

According to Manning, the biggest driver of rents in North Carolinas, as far as multi-family goes, is that the region is seeing a huge amount of development in student housing. “Raleigh is one of the largest drivers in the state, and the economy is balanced on our universities,” he shared. “So obviously we have student housing. And student housing is a far cry from the post-war era, ranch style homes, garden style, updated apartments, and the fraternity houses that we lived in when we were in school. There is a cold war of amenities going on as well as the discussion of proximity.”

Next, Manning zoomed out to chat about the national conversation. “As far as new development around the country in 2018, 2018 was relatively flat,” he asserted. “Over 2015, 2016 and 2017, there were about 47,000 beds, on average, delivered. So that’s fairly flat. The development pipeline was also pretty strong and it probably came out about the same, between 45,000 and 47,000 beds, depending on how you look at it.”

“Student housing is obviously in its infancy – well, more of in its teenage years, I guess,” continued Manning. “You had a number of properties in North Carolina that were developed as a drivable campus. If you look at Greenville, North Carolina, there were a significant number of properties that were built on the outskirts of town. Typically, you’d drive a mile or a mile and a half to school. NC State saw the same amount. Because you had a surplus of land. And these were communities that were based around a lot of those campuses.”

However, that wasn’t the case everywhere. “Look at some of the other universities, like Chapel Hill,” suggest Manning. “There wasn’t a whole lot of excess land around campus. Or Appalachian State has a topography problem. So all of the properties that really came out in the early days were much more destination-focused. And it was kind of an emerging market.”

“But what we’ve obviously seen [more recently] is a re-urbanization,” he countered. “Students want proximity. They want everything at their fingertips. Millennials want bigger, better, faster, stronger. And they’re not paying for it, a lot of the times. And so to get the highest rents, they want to be right next to the bars, the restaurants, the things going on in their community, as well as the school that they’re attending.”

At that point, Manning got down to the nitty gritty details “I think that when you see the lack of supply coming online, versus 2013, when we saw it really peak, is the fact that there’s no more dirt. God’s not making anymore,” he mused. “And that dirt has gotten a lot more expensive. The growth overall in North Carolina was some of the strongest in the country. The fact of the matter is, there are more students coming in, there’s more demand, but the locations certainly aren’t there. The best locations are typically re-development opportunities, at this point. It’s not that there’s a lack of demand driving that supply issue, it’s more of choosing projects more wisely. I think that most folks would understand that and agree with me.”