Right now in downtown Chicago, a new segment of the residential market is emerging: student apartments. We aren't talking about plywood bunk beds in a concrete-bunker style dorm here, these are high-end apartments with designer furnishings and all of the amenities you'd expect in a modern downtown residence, but tailored for a student's lifestyle. It's a bold new concept that you probably aren't familiar with unless you've spent a lot of time around various college campuses, and it's now hitting the Chicago scene hard with two standalone concepts: Infinite Chicago, at Jackson and Wabash, and Arc at Old Colony, in the historic Old Colony Building at Van Buren and Dearborn which we recently toured, two projects that both involved major rehabs of landmarked, run-down office buildings. With two projects springing up at once, we've been curious to find out what the story is behind this high-end student housing concept, and where it came from.
Both of these downtown projects are the work of Chicago-based real estate management firm CA Ventures, formed 10 years ago as Campus Acquisitions. They've been developing these upscale student residence concepts all along, but always at major university campuses and college towns. They don't affiliate with the universities they cater to, instead they look for promising real estate near an existing school and develop them as upgraded alternatives to college-owned housing. In any housing market, there's always a range of price points and values that residents are looking for, and that's no different in student housing. Dorms and low-cost housing operated by the universities may meet the needs of most students, but there's a segment willing to pay extra for better digs, and that's who CA Ventures targets with their developments. "If a university is charging $1,000 a month for a room with a bed, for example," CA Ventures Chief Operating Officer JJ Smith tells us, "we'll try to be just a little above that for a private unit with a full kitchen and washer/dryer." So far, it's been highly successful. Since 2007, they've built out about 10,000 beds at campuses across the country.
Chicago's Loop isn't exactly a university campus, but with at least 16 colleges within walking distance and roughly 70,000 students between them, it's not hard to imagine why CA Ventures is interested in the area. Most likely, they aren't the only ones to have noticed the growing population of students and young adults in the Loop area, even the city itself is embracing the shifting demographic with a brand new, world-class skate park that's just opened nearby in Grant Park.
So how does a high-end student apartment downtown differ from a usual high-end downtown apartment? Probably most pertinent is that the student apartments are all furnished. Aside from the things you'd expect in any dorm room, like seating and beds, these student apartments are also outfitted with wall-mounted HDTVs, in-unit washer/dryers, and the buildings feature student-focused amenities like rooms for studying and working on art (think SAIC and Columbia College students). The buildings can even offer certain housing amenities like cookware, serveware, towels, linens, and even wall art for the units as a service upgrade on a per-unit basis, blurring the line between residential and hospitality.
The payment model is even optimized for students. Rents are calculated per-person, rather than per-unit, so people sharing an apartment can each pay their portion of the rent individually, so no awkwardness in asking roommates to chip in their part of the rent every month. Both Infinite and Arc at Old Colony feature studios, 1, 2, 3, and 4-bedroom units. And as you'd expect, privacy will cost more.
Will this concept work downtown? Infinite Chicago, which just recently opened, is already at 90% occupancy according to CA Ventures, and expects to hit 100% when the next semester starts, and Arc at Old Colony is already taking pre-leases before construction begins. People are definitely buying into the idea now, but in a central business district, real estate markets can vary wildly. When asked about the possibility of student housing no longer being a feasible use of these historic buildings, they have their bases covered: CA Ventures also has a market rate residential portfolio, so they could easily convert the properties from student apartments to traditional apartments.
Whether or not this high-end student apartment concept is here to stay, the diligent restorations the developer is performing with these two projects is a great service to the city in itself, but the infusion of more young people in the downtown area with money to burn is likely to be a helpful step toward restoring a sense of culture to an area of the city that could definitely use it.
·To Bring the Old Colony Building Back to Life, It's The Little Things That Matter [Curbed Chicago]
·Old Colony Building Ready for New Life as Student Housing [Curbed Chicago]