Rents of the Big Ten: Ann Arbor luxury student housing market among most expensive in Midwest
Melanie Maxwell | AnnArbor.com
Rental rates ranging from $800 to $1,745 per bed a month.
Three new luxury apartment complexes that cater to students are opening in Ann Arbor this year, accompanying the sleek 411 Lofts and Zaragon Place that changed the Ann Arbor landscape, and student housing market, in 2010.
There's no shortage of luxury options for students in Ann Arbor.
The Ann Arbor luxury student housing market is among the most expensive in the Big Ten, according to an informal survey by AnnArbor.com. A survey of luxury housing rates in other cities with Big Ten schools turned up rates as high as $1,350 per bed.
At the newly built Landmark Apartments on South University studios can cost as much as $1,745 whereas a bedroom in a six-bedroom apartment costs $975. Landmark features an outdoor entertainment center, two hot tubs, a sauna, steam room, yoga studio, gym, free tanning and a study room.
Melanie Maxwell | AnnArbor.com
The same company that owns Landmark also owns luxury complexes near Purdue University and the University of Illinois' main campus. According to Landmark property manager Rick Hill, apartments at those complexes have similar amenities but are less expensive than apartments in Ann Arbor.
Landmark is a few steps up from your average dormitory.
"You look at some of those prices and you wonder how they find people to afford it — but they do," said Amy Khan, president of local property management company CMB.
"There is a point by which you wonder how much more does the market need, but right now it seems to be doing well," added Peter Logan, director of communications for university housing at the University of Michigan. Logan said the influx of luxury housing hasn't affected demand for on-campus housing units. U-M is expecting roughly 9,700 students to live on campus this year.
According to local commercial real estate agent Peter Allen, the local market can take in even more luxury beds. Allen's company has a listing for the air rights above Pizza House, which was built to hold a 15-story high-rise.
Allen is in talks with interested developers, and he says there's been a common theme: Ann Arbor is expensive.
"I hear this from some people who are here looking at doing some student housing. They want to do housing in the Big Ten and they’ve told me that Ann Arbor rents are the highest," he said.
Jeff Smith | AnnArbor.com
Other markets in the Big Ten
Rates for luxury apartments in the 24-story Park Evanston, just blocks from Northwestern University, can reach $1,300 per bed in a three-bedroom apartment and $1,350 for a studio. That apartment includes a dry-cleaning service, gym and heated outdoor pool with a sweeping view of Chicago.
"A lot of students come here for housing," says property manager Beth Dote.
Another high-rise at the edge of Evanston, 415 Lofts, has two bedroom apartments available for $1,050 a bed. Sheila Swanson, property manager of 415 lofts, says that including her property and Park Evanston, there are three high-rise luxury apartment complexes in Evanston and none of them cater solely to students.
"We cater to whoever can afford to live here," she said.
In Columbus, the home of Ohio State University, there are at least five luxury apartment complexes, although are high-rises and many are much smaller than the new Ann Arbor offerings.
Built in 2010, rent at East Village, near OSU, ranges from $550 to $650 per bed in apartments with four bedrooms. Nearby East Village are a community of townhouses built for student living, each with a three-car garage, and a loft building with a gym and one bedroom apartments. Each has rents reaching $1,000 a month. All three were built within the last seven years.
The majority of tenants in each community are undergraduates at OSU, says Legacy Management Services property manager Ryan Chapman, who estimates that about 340 students live in the three communities.
"There's a small handful of apartment [complexes near OSU] that care about luxury," said Chapman. "For the price and the surroundings, it doesn't really take much to be a gem in the area."
Here's a look at a sampling of listings for high-end apartments near Big Ten schools:
- Penn State University, State College, Pa.: Centre Court and Campus Towers apartments are fully furnished, newly constructed four- and three-bedroom units with electronic locks and use of a gym. Rent is advertised as between $800 and $825 per bed.
- Purdue University, West Lafayette, Ind.: Luxury apartments at Chauncey Square range from $660 to $1,175 per bed, depending on the unit size. The apartment includes a fitness center, business center and study lounge, theater, game room and free tanning.
- Indiana University, Bloomington, Ind.: With units titled 'Manhattan' and 'Soho,' rent at Smalltown Plaza, built in 2004, can be as high as $640 per bed. The eight-floor complex, including two floors of retail space, is near IU's campus and features a study lounge and free gym membership.
- University of Illinois, Champaign, Ill.: The 24-floor high-rise on Green Street is the tallest building near UI. Built in 2008, the building mostly houses undergraduate and graduate students. It has an indoor gym and outdoor pool and rent is advertised as $900 for a four bedroom.
- University of Minnesota, Minneapolis, Minn.: Rent at luxury apartment complexes Sidney Hall, The Edge and 412 Lofts, near campus, can be as high as $1,000 for a one-bedroom apartment and $600 a bed in a three-bedroom apartment. Those complexes include a mix of community spaces with fireplaces, on-site garage parking, gym facilities and are furnished.
- University of Wisconsin, Madison, Wis.: There are more than a dozen apartment complexes near the campus area, many of them high-end. Rent at one of the Equinox's 115 furnished units can range from $500 to $875 per bed in a multiple-bed unit, according to the property manager of the 12-floor high-rise. The nearby Humbucker high-rise opened this year and a two-bedroom goes for about $1,500.
- Michigan State University, East Lansing, Mich.: Developers are building an eight-floor complex, the Residence, which is set to open in fall 2013. It will be the newest, largest apartment complex near MSU and the tallest building in East Lansing. Rates for the 42 loft style apartments haven't been released.
- University of Iowa, Iowa City, Iowa: Developers are building a 14-story, $10.7 million high-rise in downtown Iowa City that will include 12 floors of apartments and condominiums.
- University of Nebraska, Lincoln, NE.: Although not newly constructed, the Chateau Terrace high-rise is a short drive from campus and includes a pool, gym and clubhouse. A two bedroom apartment is advertised as high as $900 per month.
Why so expensive?
Angela | Cesere | AnnArbor.com
A somewhat laborious city approval and permit process, expensive air rights and a relatively affluent U-M student base all contribute to Ann Arbor's costly rental market.
Developers of luxury high-rises have to charge high rents to absorb the cost of construction and still make the desired profit, Allen said.
"Ann Arbor has a reputation for being very difficult for out of town developers," Allen said, adding the cost of acquiring land and air rights brings another dimension to the table. "The only way to make your high land cost work is... to go into (high-rise construction) and that is 50 percent more expensive."
High-rise construction requires steel, whereas a building of four or five stories can be built with lumber, a less costly material.
Students at U-M also can absorb the cost of a bed in a luxury high-rise more readily than students at other schools, Allen surmised.
"The profile of students can afford these super ammenized, very convenient locations," he said.
At U-M there are roughly 27,000 undergraduates and 15,000 graduates, one of the largest student bodies in the Big Ten. According to a survey of incoming freshmen students in 2011, the majority of students at U-M come from middle-class and wealthy backgrounds.
According to student responses, 21.3 percent of incoming freshman households make more than $250,000, 9.4 percent of parents make between $200,000 and $249,999 and 31.6 percent of parents earn between $100,000 and $199,999.
Added Logan of Ann Arbor's luxury complexes: "They have been marketing to a more, I suppose, affluent student and they don't seem to be having problems attracting leases."