timthumbMajor US Developer Capitalizes on Chronic Shortage of Student Housing in MontrealCampus

Crest, the second largest provider of student housing in the U.S. has responded directly to ease the critical undersupply of housing for university campuses in Montreal. Two former hotels have been converted into off-campus student housing by Campus Crest and private equity firm, Beaumont Capital.

Formerly the Delta Hotel and the Holiday Inn, the new developments called Evo Square Victoria and Evo Centre-Ville, offer over 1,000 single and double occupancy units, along with amenities that include a fitness centre, library and study space.

Continuing high demand for student accommodation

For Campus Crest, the Montreal projects are its first foray outside of the U.S. But based on ROCK Advisors research, the timing is right. Canada is ripe for new student housing. While approximately 1 million students attend more than 80 major post-secondary schools across the country, a chronic shortage of on-campus university housing and off-campus accommodation persists.

In its regular monitoring of the student housing market, ROCK estimates just 130,000 on-campus beds across Canada, and even fewer off-campus beds. The situation has created a high and continuing demand for student accommodation.

Of the major post-secondary institutions in Montreal, McGill, Concordia, and Universite de Montreal have over 94,000 students enrolled in full-time courses, but fewer than 500 off-campus beds existed in Montreal prior to Evo Square Victoria and Evo Centre-Ville entering the market. Because many students are only guaranteed on-campus housing in their first year, students in four and five year programs are left to fend for themselves.

Housing must be location-sensitive

“When ROCK conducts student housing feasibility studies, we look at all facets of the student population and the supply of housing,” says ROCK research coordinator Scott Midgley. “That includes both university-operated and off-campus housing, and the conventional rental apartment market, which could absorb a high proportion of students.”

“The real estate mantra of ‘location, location, location’ is crucial to student housing,” says Derek Lobo, CEO of ROCK. “Housing has to be close to schools for it to work. Since accommodating a student population is so location-sensitive, you have to be prepared.”

That preparation could involve tearing down buildings, converting hotels, assembling land or building new housing, all accessible to campuses.

ROCK is actively involved in student housing consulting and brokerage, and has worked on many high profile projects in Canada. ROCK conducts feasibility studies on student housing and recommends ways to optimize a particular project. For more details, contact Scott Midgley at smidgley@rockadvisors.ca