VR Accelerates Preleasing of Student Housing During Market Slow Down
Student housing markets are experiencing slower preleasing rates than in prior years due to the rapid expansion of new student housing at a rate of roughly 50,000 off-campus beds per year since 2015.
“Oversaturation is more to blame than demand in most markets, and many will rebound as development activity moderates,” says Taylor Gunn, Vice President of Research & Analytics at CA Ventures, LLC (formerly Director of student housing for Axiometrics, a RealPage company based in Richardson, Texas).
According to Axiometrics, properties closest to campus aren’t necessarily seeing this impact and are still outperforming the rest of the market.
As documented in our previous blog “Virtual Reality (VR) Gives an Edge in a Competitive Student Housing Market” using a Virtual Reality Showroom, IPA was able to prelease 93% of their units in its first year. When compared against industry norms, new properties typically expect a prelease rate of 89%, while existing properties target an occupancy rate of 95%. By achieving a prelease rate 4.00% higher than the industry norm, IPA greatly decreased their holding costs and vacancy rates, as well as the need to reduce rates later in the rental season.
In addition to the immediate financial benefits, during the construction phase of IPA’s Latitude property, the Virtual Showroom allowed families to freely walk throughout the entire property including all of the unit floor plans and cutting-edge amenities (e.g. coffee shop, study areas, roof top lounges, exterior pool with raised cabanas) by simply using a large interactive touchscreen and 3 Oculus Rift Head Mounted Displays. The Virtual Showroom provided comfort and confidence to clients being asked to sign a lease for an unfinished property. “We had tenants who came to move and said, ‘This looks exactly like it did in Virtual Reality.’” Said Dave Klein, Director of Asset Management and Development Design for IPA.
Furthermore, IPA was provided with countless renderings and videos for use in their traditional marketing materials… at a fraction of the cost of traditional architectural renderings… long before a single photograph could be taken.
These benefits also spread into earlier phases of the project’s rezoning process “The ability to present a visual representation of the proposed buildings and outdoor amenities and how they would interact with the surrounding properties was invaluable to the rezoning process.” Said Dave Klein.
According to AppFolio, “The future of leasing is changing as many tasks are now handled online. In addition to property descriptions and pictures, consider adding a video tour to draw attention to popular student housing amenities.”
However, photos, videos, and even 360 spherical-photo based tours can ONLY be created after construction is complete. But, all of this is possible using VR. The Virtual Showroom Experience can be reformatted for streaming over the web, providing remote and international students the same level of confidence as those who are able to physically visit the property.
Rather than risking a less than full first year, call or contact us and let your future residents experience your property before it’s built!