BRAILSFORD & DUNLAVEY Comprehensive Housing Market Analysis DRAFT - Executive Summary December, 2007.

BRAILSFORD & DUNLAVEY

Comprehensive Housing Market Analysis

DRAFT - Executive SummaryDecember, 2007


Scope & Schedule Review

Goals & Objectives

Market Analysis Summary

Recommendations

Presentation Agenda


Scope & Schedule ReviewOriginal Schedule

Phase I - Institutional Analysis

Strategic Asset Value Analysis (Visioning)

Existing Conditions Analysis

Concept Development Focus Groups

Phase II - Market Analysis

On-Campus Market Analysis (Survey)

Off-Campus Market Analysis

Peer Institution Analysis (Benchmarking)

Competitive Context (Price Point Analysis)

Concept Refinement Focus Groups

Phase III - Financial Analysis

Phase IV - Comprehensive Program Plan

Site Visits

J uly August SeptemberMarch April May June

*

Kickoff Meeting

Survey Implementation

*

cc

Survey Analysis*

Market Analysis

c

Financial Analysis

Plan Developmen

t

Final Presentation

*

*

Plan Refinement

FinancialWorksession


Presentation Agenda


Goals & Objectives


Recommendations


SAV Work Session– Educational Outcomes– Enrollment Management– Campus Community– Financial Performance

Guides Decision Makingi. Quantity and Location of Housingii. Target Market and Unit Types / Programmatic

Prioritiesiii. Financial Accessibility & Quality Reconciliationiv. Level of Service / Underwriting Criteria &

Institutional Will

Low High

0Current Conditions: xAspirations: O

I. Educational Outcomes a. Supervision Through Maturity

b. Proximity to Educational Resources

c. Personal Development

d. Direct Curriculum Enhancement

e. Development Continuum

II. Enrollment Management a. Housing Market Supplement

b. Competitive Amenity

III. Campus Community a. “Residential Campus” Designation

b. Out-of-class Activity

c. Neighborhood Creation

d. Quality of Life System Integration

IV. Financial Performancea. Balance Sheet Utilization

b. Revenue/Occupancy Risk Tolerance

c. Financial Accessibility

d. Level of Service

e. Sustainable Design and Operations

Targeted Strategic Value

10

Goals & ObjectivesStrategic Asset Value (SAV)


Goals & Objectives SAV Review

Educational Outcomes Freshmen focus and facilities appropriate for freshmen through senior students Encourage greater faculty participation

Enrollment Management Provide enough housing for 100% freshmen and guarantee Sophomore housing

Community Creation Increase density of students on northeast campus (Hill Square) to establish

critical mass Out of class activity focused at the College House level

Financial Performance New developments should implement sustainable practices per University

standards Achieving occupancy is more important than achieving debt coverage


Presentation Agenda


Goals & Objectives


Recommendations


a. What’s the market (student perspective)i. Rental rates / occupancy performanceii. Market focus & servicesiii. Measure impact of location, product type,

condition, amenities on prices & occupancy

b. Consider the dynamicsi. Demand shifts (student & non-student)ii. Projected & potential additions to supply

(reductions?)iii. Impact of zoning & land-use policyiv. Market concentrations

Market AnalysisOff-Campus Housing

$558$578

$401

$470

$364

$668

$462

$427

$550

$646

$747

$0

$100

$200

$300

$400

$500

$600

$700

$800

ST. 1-BR 2-BR 3-BR

Walking Distance (under 2 miles) 2 to 5 Miles Greater than 5 Miles

Avg: $409Avg: $454

Avg: $688

Avg: $577

$0

$200

$400

$600

$800

$1,000

$1,200

ST. 1-BR 2-BR 3-BR

$600/month for on-campus 2-BR


Comparable Product Evaluation Low

1 2 3 4

High

5

Chestnut Hall

Domus The Hub The Stratum

The Radian

Individual Leases X X X O O

Roommate Matching X X O O O

Academic Year Leases O O X O O

Social Programming and student focused amenities

X O O O O

Transportation and proximity to campus

O O O O O

Balanced unit configuration X X O O O

Liberal credit requirements/ Co-signers O O O O O

Critical Mass of Penn and Drexel students/ Marketing focus

X X O O O

Off-Campus Housing Development


Review of key apartments in the University City district

Name Zoning Type

Year Occupancy rate

Total # of beds

Chestnut Hall

(3900 Chestnut)

High-rise apartments

& retail

1918 90% 318

Domus High-rise apartments

& retail

Fall 2007

20%

pre-lease

464

The Hub High-rise apartments

& retail

Fall 2006

100% 146

The Stratum

Student apartments

& retail

Fall 2007

55% 255

The Radian

Student apartments

& retail

Fall 2008

70%

pre-lease

500

Off-Campus Housing Development12% of Undergrad & 8% of Grads prefer New Luxury Unit Proximate to Campus


The RadianLandlord First Worthing

Unit type 1 bed 2 bed 3 bed 4 bed 4 bed Total

# of beds 22 16 102 316 44 500

Average square footage

560 755 1013 1269 1426

Target rent/ person

$1350 $1200 $1050 $1025 $1175

Co-sign policies

Key signatories for the lease may be the applicant & co-signer (s). No minimum income requirement.

Lease terms Individual leases. Academic year lease.

Amenities Shops & restaurants on the first floor, clubroom, Wi-Fi, washer-dryer in each unit. Eco-friendly construction. Rent includes furniture

Utilities All utilities are included in the rent.

Residents The Radian is focusing on Penn students as the primary target market. Other students from Drexel and University of the Sciences will be part of the secondary target market.


a. Information goal is qualitativei. What students care about (identify issues)ii. Why they care about itiii. How much they care about it

b. Format & Processi. Groups of eight to twelveii. Planned strategy (macro => micro)iii. Test prevailing wisdom, intercept information &

concepts

Market AnalysisStudent Focus Groups


Market AnalysisStudent Focus Groups - Undergraduates

• 3 focus groups, 30+ participants– 2 undergraduate on-campus focus groups, both with 10 students each

» Students were a diverse group, all academic years, varying majors, and with good representation from RAB as well as other students drawn at random to participate.

– 1 undergraduate off-campus focus group, with 12 students • Students typically look at Penn and other Ivy League Schools• Student are familiar with the College House system• Freshmen use the Residential Programs to get preferred housing• Navigating the College House system is difficult

– Overall, students enjoyed living on-campus but were turned off by the housing selection process, decentralization of administration and the disparities in College House conditions and policies

– Sophomores feel stuck: stay in current hall or move off campus• About ½ have changed College Houses

– Many because Quad and Hill are freshman focused and offer facilities that are less appealing to upper class students

• Satisfaction higher for students at smaller College Houses• College House system isn’t perceived as 4 year experience• Off-campus leases begin in November & December

– Risk the system or go off campus


a. Quantitative measurei. Current housing choicesii. Views of existing housing operationsiii. Preferred housing optionsiv. Demographics

b. Data analysisi. Sample size & integrityii. Cross-tabsiii. Demand modeling

Market AnalysisStudent Survey


Market AnalysisStudent Survey

4,669 Surveys– 20% of student population– Closely match student demographics– +/- 1.44% margin of error (95% confidence level)

Survey Significance

1.00%

3.00%

5.00%

7.00%

9.00%

11.00%

13.00%

15.00%

100

300

500

700

900

1,10

01,

300

1,50

01,

700

1,90

02,

100

2,30

02,

500

2,70

02,

900

3,10

03,

300

3,50

03,

700

3,90

04,

100

4,30

04,

500

4,70

0

Survey Response

Su

rve

y M

arg

in o

f E

rro

r


Market AnalysisSurvey Analysis - Undergrad

87% of students said sense of community was important to their college experience 63% prefer to have freshmen-only halls

– 77% felt it was important to have freshmen-focused communities 23% prefer to living in mixed communities

– 60% felt is was important to have mixed communities 94% felt is was important to guarantee freshmen & sophomore housing 91% felt is was important to provide suitable junior & senior housing 64% of off-campus students live in 4+ bedroom units 80% of off-campus students found living conditions convenient to class, work, etc. Median Rent $750/mo incl. utilities (83% 12.mo lease - $9,700/year incl. deposit) 25% prefer a 4-bedroom single on-campus (all other units 2-8% each)


Market Analysis Peer Institution Analysis

College House Peersi. Brownii. Riceiii. Harvardiv. Yalev. Princetonvi. Columbiavii. Cornellviii. Chicagoix. Wash U.x. Stanford

Levels of Researchi. Programsii. Policiesiii. Unit Design & Amenitiesiv. Community


Market Analysis College House Drivers

Key Policies: Random Assignment to College House

– Harvard has Freshmen House System followed by So.-Sr. College House Commitment thru Sr. Year (Princeton expand Jr & Sr. by 2009)

Key Facility Requirements: Dining halls in each College House Common Rooms 300-500 Students

Other Key Factors: High percentage of students living on campus 70 - 98% History: College House Systems are 60 - 100years old No Greek System (Yale is an exception)


Presentation Agenda


Goals & Objectives


Recommendations


Demand-Based Program (DBP)Capture Rates






Demand Based Program (DBP)_Undergraduate Demand (includes impact of Radian)


Demand Based Program (DBP)_


RecommendationsExisting Conditions

Risks:– 500 bed Radian comes on line in 2008

• Analysis shows that 168 undergrads from on-campus will relocate to Radian– New 340 Bed Complex 2010

• Will dilute on-campus demand for, and impact occupancy of, less desirable units and houses

Risk Mitigation Strategies:– Strengthen College House System with Key Policy Changes

• Create Freshmen House system (with appropriate bed type and amenities)• Create link to College House for freshmen to matriculate as sophomores• Guarantee Sophomore Housing• Provide market responsive housing to upper-class students

– Convert Sansom to College House or Graduate (not current hybrid)– Develop New Housing as Market Responsive College House Model


RecommendationsCollege House Goals

Goals:– Enhance identification with House– Retain both first and second year students – Retain all upper-class students wanting to remain on campus– Make the best use of existing facilities

• Small Traditional Houses for Freshman– Ideally with Separate Dining and Programming Areas

• Larger Houses with more amenities to attract Upper-class students• Graduate Housing based on Market Demand


RecommendationsKey Policy Changes

Institute Freshmen College & Upper-Class College House System– 2009 Freshmen in traditional-style houses

• Fisher-Hassenfeld, Hill, Kings Court / English, Riepe, Ware• Capacity: 2,349 beds 2006-07 Freshman Class Size: 2,385 students

– 2009 Creation of two university-wide College Houses• Gregory, Du Bois• College Houses that accommodate Freshmen through Senior Students

– 40 Freshmen in Du Bois / 40 Freshmen in Gregory

– 2010 Sophomores, Juniors, and Seniors in mixed-unit College Houses• Stouffer, Rodin, Harnwell, Harrison• Balance between Sophomore and Upper-Class students so that both groups

represent no less than 30% and no more than 70% of the House population


RecommendationsKey Policy Changes with New Development

Institute Freshmen College & Upper-Class College House System– 2010 Sophomore Housing Guarantee

• Bed assignments can accommodate 62% of Sophomores – the maximum number of beds demanded by surveyed students

– 2010 Sansom remains primarily Graduate Housing with approximately 300 Undergraduate Beds

– 2010 New College House is Developed• Balance of Sophomore and Upper-Class Students• Suggested configuration based on Demand:

– 140 Private Suite beds– 200 Three- or Four-Bedroom Apartment Private beds


RecommendationsKey Policy Changes & New Development

Capture Rates / Assignment Reconciliation

House Configuration




RecommendationsScenario I – Sophomore Guarantee & Sansom as Graduate Housing








Renovate Sansom for Graduate Housing– 2010 Sansom is renovated to accommodate Graduate Housing Demand

• Efficiency / One-Bedroom Apartment Private Beds

• Two-Bedroom Apartment Private Beds

• No Undergraduate Students Remain in Sansom

– 2010 New College House is Developed• Balance of Sophomore and Upper-Class Students• Suggested configuration Based on Demand:




House Configuration






RecommendationsScenario II – Sophomore Live-on Requirement & Sansom as College House








– 2010 Sansom is converted into a College House• Balance of Sophomore and Upper-Class Students

• No On-Campus Graduate Housing

– 2010 Sophomores Live-On Requirement• Approximately 85% of Sophomores are required to live on campus

– 2010 New College House is Developed• Balance of Sophomore and Upper-Class Students• Suggested configuration based on Demand:


RecommendationsScenario II – Sophomore Live-on Requirement & Sansom as College House



House Configuration

RecommendationsScenario I – Sophomore Live-on Requirement & Sansom as College House





Comprehensive Housing Market Analysis

DRAFT - Executive SummaryDecember, 2007

BRAILSFORD & DUNLAVEY Comprehensive Housing Market Analysis DRAFT - Executive Summary December, 2007.

Documents

campus slide

campus housing slide

target market

market student perspective

location of housing

market focus services

northeast campus hill

density of students