Tuesday, September 2, 2014

Rental market shows new units swiftly occupied


A Unitrans bus picks up students on the central green at West Village, a neighborhood being developed on the UC Davis campus west of Highway 113. The Solstice complex opened this fall, with furnished apartments for undergraduates in two-, three- and four-bedroom configurations, and is already 99 percent leased. Sue Cockrell/Enterprise photo

From page A1 | November 01, 2013 |

Nearly all of the units in the undergraduate-oriented Solstice Apartments — which UC Davis opened this fall in West Village — are occupied. And most of the student-oriented off-campus apartment complexes in Davis are either leased up or nearly so, as UCD continues to add undergraduate students.

Solstice opened this fall, with furnished apartments in two-, three- and four-bedroom configurations.

“If you count bedrooms, it’s 504 beds,” said J.D. McCleod, senior community manager with Carmel Partners, the company that manages the West Village units. “And if you count front doors, there are 156 of them. Solstice is 99 percent full.”

In brochures designed to attract student residents, Solstice stresses its amenities. Bedrooms come furnished  with a desk, a night stand and a dresser; each bedroom also has a private bathroom and a walk-in closet, plus a ceiling fan. The living rooms come with a flat-screen TV, and a kitchen area that includes a fridge (with icemaker), a stovetop/oven, dishwasher and microwave, and a countertop dining area with bar stools. There’s also a full-sized washer and dryer for laundry.

The complex has a fitness center with yoga room, sand volleyball court, outdoor kitchen and fireplace with barbecue grills and seating; also “resort-syle” recreation pool, heated lap pool and hot tub; plus study lounges and conference rooms. Electricity and high-speed Internet are included.

West Village also emphasizes energy reduction (high-performance glass, high-efficiency lighting and sun shades) and energy production (lots of solar panels). The West Village project aims for zero net energy used when all factors are taken into account.

A summer brochure for Solstice listed monthly prices ranging from $988 per bedroom in two-bedroom units to $814 per bedroom for some four-bedroom units. Leases specify one person per bedroom.

Enrollment rising

Solstice came online as the university is boosting enrollment.

“UC Davis has been making progress toward its goal of increasing enrollment of undergraduates as part of the 2020 Initiative,” said campus spokeswoman Julia Ann Easley. “The university aims to add about 5,000 undergraduates beyond the three-quarter average of undergraduates in 2011-12.”

Fall 2013 enrollment figures won’t be released for another week or two, but it is safe to say that some of those additional 5,000 undergrads are already here. UCD is also recruiting more international students, who pay upwards $45,000 in out-of-state tuition as compared to the roughly $15,000 per year charged of California residents. With more students on the way, and no major additions to the pool of student apartments in the planning pipeline, competition could become more intense in the next few years.

The Solstice Apartments completes the apartment-style housing that the university has planned for West Village; the other complexes are The Ramble (oriented toward undergrads) and Viridian (aimed at faculty, staff and graduate students). The Ramble and Viridian opened in fall 2011, with a combined 1,482 beds. The Ramble has 645 front doors (each serving two or more bedrooms) and  Viridian has 192 front doors.

The Viridian units do not come furnished, while The Ramble has a mix of furnished and unfurnished units. McCleod said The Ramble and Viridian are about 98 percent full.

The West Village apartments include about 40 residents who are full-time students at the Sacramento City College Davis Center, located in West Village, and plan to transfer to UCD when they complete their community college coursework. About 60 West Village bedroom units were made available to community college students as a pilot program this fall, and both UCD and Sac City College seem satisfied with the first-year response.

But the university isn’t entirely done adding new student beds. UCD will add new residence halls next year, and at the same time decommission some older dorms, a trend that has been under way for several years.

“Next fall, we’ll be opening new residence halls that will accommodate about 1,200 students,” Easley said. “After the current academic year, UC Davis will close Leach Hall, which has about 175 beds.”

Built in 1970, Leach Hall has single-occupancy rooms with twin beds, with one bathroom serving each group of four or five bedrooms. The bedroom groupings at Leach do not come with a kitchen.

Off campus

Off-campus apartment complexes also are doing a brisk business this fall. Tandem Properties has more than a dozen complexes in Davis. Tandem partner John Whitcombe told The Enterprise “we’re pretty full up (this fall). I think things are coming back in terms of the overall economy in California.”

Whitcombe acknowledged that the past five years have included “a few ups and downs” for the company, “partly because of the new supply in West Village, but mostly because of the Great Recession. We had students whose mom and dad didn’t know if they were going to have a job, and tuition was going up pretty fast. There were some students who just had to drop out of school.”

He said the vacancy rate in Tandem’s complexes inched up to around 5 percent at one point, but is much lower now.

“It’s the new normal,” Whitcombe suggested.

The most recent apartment survey conducted on behalf of UCD, released in April, found a vacancy rate citywide of 1.7 percent. That compares to a vacancy rate of just 0.7 percent in 2007, when the recession began. What constitutes a “normal” vacancy rate for apartments in a given community is a subjective judgment, but a national survey conducted by Reis Inc., a firm that regularly tabulates statistics for the industry, reported a vacancy rate of 4.2 percent for the nation as a whole during the third quarter of 2013.

A spot check of a few apartment complexes in Davis, managed by other companies, likewise reported few, if any, vacancies. Greystone Apartments (managed by the Stonesfair company) said apartments are “100 percent leased, but with a few sublease situations” available. The College Square apartments (FPI Management), reported being 100 percent leased, but with some residents seeking a roommate. The Edge (Riverstone Residential Group) likewise indicated there were no vacant units.

Like the new units at West Village, many of the newer apartment complexes in Davis boast amenities like swimming pools and spas, a clubhouse, dishwasher and laundry facilities. Rents for newer apartment complexes can range between $1,100 and $1,400 a month for a two-bedroom unit; the cost per bedroom falls a bit for three- and four-bedroom apartments.

The long view

Whitcombe, who grew up in Davis, earned an undergraduate degree at UCD and then earned an MBA at Harvard before founding the company that became Tandem. He offered a long view of the changing market for student-oriented apartments in Davis:

“All in all, I’m cautiously optimistic. West Village is an interesting place, but has never developed as being the competitor that we were concerned about in the beginning. The tuition increases are moderating.”

And with the economy on the mend, “there seems to be more of an upbeat feeling out there. We’re happy about that.”

— Reach Jeff Hudson at jhudson@davisenterprise.net or 530-747-8055. Follow him on Twitter at @JeffHudsonDE



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