The recent construction of numerous apartment complexes and condos around campus has sparked competition between existing complexes as they all compete to win over students.
Students may find themselves questioning if so many new complexes are actually needed, does the student need to support so many complexes?
According to Wesley Moore, local commercial real estate appraiser and market analyst, the market does appear to support the new facilities which seem to be springing up right and left.
Moore said since 1995, LSU has welcomed over 8,000 more students, this consequently established a significant real estate market.
Strong growth on campus does warrant additional units being built in order to meet the student body’s needs, Moore said.
Since 2000, 330 condo units have been constructed and more are to come.
Moore said currently there are 75 condo units under construction on Burbank Drive alone. River Road welcomes 85 new units which are pending
and should be completed shortly.
While the number of condo units seems to be growing at an alarming rate, Moore said all the units are pre-sold and are very much in high demand.
“They simply can’t build them fast enough.” Moore said.
The growth and construction is rampant around campus, and student need continues to support this growth. It is an issue of supply and demand, Moore said.
Steve Smith, former president of the Baton Rouge Apartment Association, said he believes in the area and is confident that the new complexes certainly will be utilized.
“Investors wouldn’t be investing millions into these complexes if they didn’t believe they were needed,” Smith said.
While the market seems to be inviting of these new additions, one can not help but wonder if this need will remain consistent.
As LSU attempts to raise the bar on admission standards, it is speculated that admissions may decrease. If student enrollment decreases, the demand for student housing will follow.
When addressing this issue, Moore said it is yet to be seen if future elevated standards will play a major role in the performance of the market.
Moore said he thinks this will not present an immediate problem judging by past behavior of the student market.
Moore said since 1996, the University has raised its admission standards twice. Each time the students met the challenge, as enrollment was steady and the demand for student housing continued to be consistent.
An even more competitive market would most likely result if admissions were to be significantly cut, Moore said.
While it could present trouble in the future there is no solid way to predict or pinpoint potential problems, he said.
The market has yet to see a diminishing affect regarding demand, Moore said.
With the issue of demand being met, students now have their pick from a plethora of complexes from which to pick.
If you build it they will come, quite literally.
Moore said in recent years, some students have chosen to relocate to areas further from campus so they may attain a more attractive, controlled environment at a reasonable rate.
Moore said in theory if you build more attractive facilities closer to campus, they will attract these students who have ventured away.
While fresh facilities may attract students who have gone astray, the remaining student market must be enticed to either relocate to a more hospitable complex or stay put.
As more complexes are introduced to the game, fellow contenders are finding it harder to compete and draw new tenants into their complexes.
Glenda Ricord, Varn Villa Apartments manager, said there definitely is more competition recently, due to the construction of apartment complexes near campus.
Veteran complexes look to be the underdog in the race to snag tenants.
Complexes which are older and in disrepair have two options Moore said, rehabilitation or replacement.
Depletion of older apartments also is a factor which drives the construction of new facilities.
Moore said it is survival of the fittest, and those complexes which cannot contend will be left behind.
The older complexes are not expected to dissolve, as each complex appeals to a different demographic, Moore said.
Older complexes offer more of a home-like atmosphere Ricord said.
“The older complexes tend to have larger rooms and offer students more space, at a cheaper rate,” Ricord said.
Complexes such as Varn Villa are ideal for more serious students because they offer a more subdued and regulated atmosphere, Ricord said.
The older complexes will continue to appeal to students who support themselves and cannot afford to live in many of the newer complexes, Ricord suggested.
Regardless of what appeal individual apartments or condos possess, they will all be affected in some way by the fresh competition and will have to find some way to stay on the map.
Complexes must adjust and shift until a balance is found, Moore said.
New units may be stepping on the toes of existing apartments, this is when the competitive pressures are felt, Moore said.
“Every complex is affected when new competitors in the industry are introduced, it’s inevitable,” Moore said.
“Complexes must dress up for the dance or they will be left out,” Moore said.
Some complexes are beginning to offer potential customers incentives to compete with the heavy competition. The complexes which surround the University are essentially fighting for the same tenants — students.
Varn Villa Apartments have jumped on the wagon, as they now offer credited cable bills to new customers.
Ricord said each month residents are able to bring a copy of their cable bill into the office and receive a $40 credit, therefore paying less for rent. This incentive, unlike many others is
offered every month, versus
being only a temporary incentive.
Moore said some complexes are offering incentive such as one month worth of free rent or no deposit in an attempt to pull customers in.
Moore said temporary incentives will most likely be offered to new customers for the next year or two until the complexes get comfortable and reach 90 to 95 percent occupancy.
In addition to incentives, some older complexes are receiving a facelift in hopes that they will not be left behind.
Highland Plantation Trace, previously Fontainbleau Plantation Trace is a prime example of a complex reinventing itself in the face of competition.
The complex recently was bought by R.W. Day and Associates and currently is being renovated.
Beginning in May, residents will see an increase in rent when cable and internet services will be included with residents’ monthly rent expense, Moore said.
Construction also is taking place on the outside of the apartments, as the complex is being “nipped and tucked” so that it may welcome new customers and be up to par with its fellow competitors.