WHAT GIVES? Top CoMo developer predicted 'distressed, obsolete' student apartments in 4-8 years

"A terrible deal for a college town like Columbia"

COLUMBIA, Mo 5/20/16 (Update) -- You might think the sky was falling with all the hullabaloo over a 6-month moratorium on student apartment construction.

But the temporary halt should have been permanent at least two years ago, according to findings and predictions from Columbia's leading student apartment developers. 

 

Bruce, Jon, and Nathan Odle published a 14-page report in 2014 that painted a grim picture of college enrollment and student housing.    The trio is famous for its "Brookside" student housing.  

Leaked to the Columbia Heart Beat, the report predicted "obsolete, distressed properties" in just 4-8 years.   

"Missouri population by age paints a bleak picture for increasing student housing demand," the report explained.   "Unfortunately," the out-of-state student pool is "decreasing" too. 

Yet student housing construction has continued, even accelerated.  

What gives, especially as the Odle report's predictions come true?   Perhaps its findings are being ignored, even by its own authors, who recently tore down Shakespeare's Pizza and plan to demolish Bengals Grill and Casablanca restaurant, all for more student apartments.      

Authored by Brookside sales and customer service representative Sarah Backhaus, the Odle report claimed "it does not make sense to add significant supply."   It also faulted a widely-used indicator of student housing demand:  University of Missouri enrollment. 

"Student housing demand cannot be determined by MU enrollment," the Odle report explained.   "Mizzou could grow to 38,000 and not create new student housing demand."

Even Mizzou housing officials were circumspect.  "Frankie Minor, Director of Residential Life at the University of Missouri, stated at Mizzou’s 2014 Off Campus Student Housing Forum that they are planning for flat growth," the report said.  

The report predicted an oversupply of 902 beds three years ago.   The oversupply rose sharply by Fall 2014, to 2,270 beds -- an astonishing 150% increase in one year. 

Among projects adding supply at the time:   552 beds at the Den; 184 at Bengal Ridge; 224 at Midtown; 108 at Log Hill; and 43 at Beals on 9th. 

Three groups of college students tend to rent student apartments:  sophomores, juniors, and seniors (most freshman live on campus).    

Their numbers are not growing, the report said, a prediction borne out today as Mizzou enrollment plunges. 

Jon Odle made similarly pessimistic prognostications in 2013, when his family cancelled a 1,200-unit student apartment at Discovery Ridge south of town.   The student housing market, he told the Tribune, was overbuilt.

"It’s institutional investors chasing higher return and having no knowledge' of whether the Columbia 'student housing market’s economics are imbalanced," Odle said. 

"The market is more about flipping than looking at market dynamics," he added.  "Anybody from out of town can come in and fill up [their apartment project] and sell it...one month after finishing. 

 

"It’s a terrible deal for a college town like Columbia because they don’t care how healthy the market is, if the market’s in equilibrium or not."

ODLE/BROOKSIDE STUDENT HOUSING REPORT


-- This story updates a 9/14 Columbia Heart Beat article.