New apartment complexes will add to competitive market

More choices are generally a good thing. But in the case of student housing availability, new options could come with repercussions.

Despite enrollment only increasing by 257 students from 2007, Sydney Hall and Campus Crossroads are scheduled to open in 2010, with the complexes offering at least 1,000 beds combined.

Since 2005, the largest increase in University of Minnesota-Twin Cities enrollment from one fall to the next was 481 students.

Doran Companies Vice President of Development Jim LaValle said the Sydney Hall location is superior for a new apartment complex, especially since other complexes operate at or near capacity.

“I think it will add another option for students; with the waiting lists that we’ve seen in the property, we believe that the University can survive on a low vacancy rate,” he said.

LaValle said new housing can help the University compete with other schools.

“We also feel that the University needs to compete with other universities, and this gives the University a competitive advantage to have new housing,” he said.

But competition might not be a good thing.

Melrose Student Suites managing director Michael Wilde said the overpopulated market could result in increased rents for students. Each month apartment complexes have a mortgage to pay, and if a complex has fewer occupants, it will need to charge occupants more to meet the payment.

Currently, Melrose is 97 percent full, and Wilde said 2009 is the best chance for the building to reach capacity in the seven years it has been open. When the two new complexes open, however, some apartments may be affected.

“There’s the little ripple effect from the individual houses that rent to people, but this is more of a giant splash in terms of the number of people that would be available out there as potential renters,” he said. “I think that it could affect Melrose, and it could affect all of the other complexes.”

While the new complexes could take some business from existing apartments, John Bilski , 1301 University manager, said he thinks the competition is good for the community.

“We’re not concerned about it,” he said. “We’re really happy about it; if it’s good for the students, it’s good for us.”

The 1301 University building has been full since it opened in 2005 and has a significant waiting list, which Bilski said he does not expect to change.

Wilde said it is also possible for some students living in houses to move into the new complexes, allowing permanent residents to move into those homes. Commuters may also move to campus and into the new complexes. These scenarios could mean complexes will remain near capacity.

As far back as she can remember, Dinnaken Properties Vice President Yvonne Grosulak said, both Dinnaken House and Argyle House have been at capacity. Although Dinnaken will be located across the street from the new Campus Crossroads project, Grosulak said both complexes should remain competitive.

Location is a reason Sheena Smith , Keeler Apartments assistant manager, remains confident Keeler can remain full following the addition of nearby Sydney Hall.

A lot of residents are student athletes, and Keeler is close to many athletic facilities, she said.

Across the river, Grand Marc at Seven Corners marketing and leasing manager Chris Lamprecht said the new complexes could add to an already tackled market.

“I do think that it will somewhat over saturate the market for the amount of people in the market,” he said.