Quote:
Originally Posted by Hayward
It's a good article. Even building closer to campus doesn't always mean higher construction costs and land acquisition / taxes is a bad thing if you charge higher rents. The problem with amenity communities is they really need to fill up those apartments. They can't just raise rents as easily like a building with a good location. Because with a good location, residents won't leave until they graduate, and if they leave before that, there will always be someone else next in line ready to pay more.
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Exactly. Location will always bringer longer returns than amenities since the popularity of certain amentities change with the times. It's why you see places like Chandler both redoing the older central section of the complex and adding tons of new units. It's the only way to make the business model work, because the location certainly isn't prime. At a certain point, though, these huge complexes are going to collapse unless the urban areas grows into them. Otherwise, these colonies along the fringe will begin to cannablize themselves.
People will always pay for location, but you get the rents too high in these fringe amenity complexes, and the students simply move on to the next trend. It's a quick way to make money, but it ain't sustainable unless it's built close enough to a real neighborhood to sustain it, if not even at its peak size.
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