In conjunction with the Winona State University (WSU or University) Foundation and McDough Development Company (McGough), engaged The Scion Group to perform a Student Housing Market Study and Demand Analysis (Market Study) for a proposed first-year student housing development.
The University was ready to embark on a plan to right-size the housing portfolio, upgrade or decommission residence halls beyond their useful life and develop new housing. As a first step, WSU closed West Campus in 2021, where nearly 500 students previously lived. WSU was able to accommodate all students wanting to live on campus, as enrollment had declined since 2017, and the pandemic further impacted enrollment and housing occupancy. The purpose of the 2021 Market Study was to confirm demand for a proposed 340-bed first-year residence hall and solicit feedback on proposed unit types, features, and estimated rents. Scion also gauged the impact the new housing would have on the existing housing stock.
Scion used qualitative and quantitative data to achieve the goals of the Market Study. In collaboration with the University, Scion collected and synthesized relevant information through stakeholder meetings with administrators and student focus groups. Analysis of a student survey, the off-campus student rental market, peer benchmarking, and other quantitative data informed Scion’s calculation of demand and understanding of first-year students’ housing preferences and expectations.
The Market Study considered existing housing offerings and the proposed housing, which was tested at a higher housing rate than existing units. Scion’s analysis identified surpluses and deficits of unit types that may occur once the new first-year housing opened. The analysis showed adequate demand for the proposed first-year housing. For existing housing, it indicated there was more demand than capacity for suites; a shortage of single traditional bedrooms and single apartments, and a surplus of double bedrooms in the older traditional halls.
Following the market study, Scion characterized and analyzed the WSU housing portfolio finances, recommending capacity adjustments to accommodate future demand. The total demand for housing, identified in the Market Study, was 1,748 beds. Scion recommended adding more beds to achieve a 3% frictional vacancy across the housing portfolio to allow for average turnover – a total of 1,802 beds. Scion also recommended systematically decommissioning older assets with a focus on buildings with traditional double bedrooms. These recommendations, right-sized the University’s portfolio and supported the development of the new 340-bed residence hall.