Big time home building and construction companies are expanding their portfolios and providing housing for college students, reported The Wall Street Journal.
It's a big change for companies such as the Lennar Corporation and Toll Brothers who are working to be better equipped during the next housing market crisis and economic recession. Both companies learned the hard way that that the prices of single-family homes dropped and that it took a lot of effort for the residential housing sector bounce back.
Lennar Corp. is reportedly the country's second largest home builder that constructs family housing in 17 states including New York, California, New Jersey. Their new venture, which launched this month, is building the first ever off-campus apartment for college students in Austin near the University of Texas.
Toll Brothers Inc., primarily known as the go to for single families and elite luxury community homebuyers, is expected to buy two properties of land: one near the University of Maryland in College Park and another plot by Penn State University in State College, Pa., reported The Journal. The company is planning to build more expensive student housing by the Penn State campus and they're enthusiastic about opening both projects, which will include 3,100 beds, by 2015.
Perhaps one of the strongest team of players to embark on a student housing project now is partnership between the Brandywine Realty Trust, a real estate investment trust best known for its practices in commercial projects, and the Campus Crest Communities Inc., which according to Zolmax News is "a self-managed, self-administered, vertically-integrated developer, builder, owner and manager of purpose-built student housing." They intend to build a 33-story tower for the students of Philadelphia, which include the University of Pennsylvania and Drexel University.
Since the real estate crash, businesses like these have figured that student-loan programs and parental support is helping pay for housing, so landlords would have no problem raising rent. However, there is concern about the rising cost of tuition today and the burden student face with loans after graduation.
According to National Student Clearinghouse Research Center, college-enrollment has dropped 1.8 percent between 2011 and 2012, reported The Journal.
