It's interesting in that the super-majority of what's been built in the last five years has been very urban, pedestrian, mid-rise projects. Land is very scarce at major universities, so people have been working on those assemblages for years. The urban environment remains the in-vogue location to develop new ground-up student housing, but generally speaking, those urban projects don't have as nice amenities as the garden-style housing of the 2000s that is a bit away from campus because it offers more land. With more land, you can have a resort-style swimming pool and sand volleyball courts, but in an urban location, you the amenities are nice but more compact.

What's driving rents in new student housing is the fact that they're going into mid-rise, steel and concrete construction, which is way more expensive than wood-frame construction—there's more brick-and-mortar and land per bed than amenities, although those amenities remain super-nice.

Nevertheless, whether in a super-highly amenitized property a mile from campus or in an urban setting that has not as many amenities, but cool buildings with state-of-the-art finishes, students are living in unprecedented luxury compared to the college housing of prior generations. Are they getting spoiled? Well, they certainly have a quality of living unlike those students before them.

The interesting thing is that students are moving back in with their parents after graduating from school, and in many cases, their homes don't have as nice amenities as the student housing they lived in at school. It certainly is creating a housing-quality expectation for students once they graduate. They've lived in something this nice, and they want to continue that. And, it dovetails nicely with the larger part of population—especially the 21-to-35-year-olds, which has a higher percentage of renters than ever before—who are waiting to get married, buy houses and have kids. They're living in nice apartments if they don't move back home. So, there may be some correlation. There's a combination of demographics and lifestyle choices at work here, but perhaps they're getting a taste of the quality of life they want in college and it's translating to wanting a greater quality of life when they graduate.

GlobeSt.com: It's been said that students are fickle, and it takes nothing at all for them to pick up and move year after year to a new community. How does this affect the market?

Pierce: It is true, but in part it's less to do with being fickle than it is to do with other factors—namely, a changing student lifestyle translating to a changing student preference for housing. As they move from being freshmen and mature, their desires evolve. Also, the single most important factor in determining where students live is where their friends live. As their friends live elsewhere, they will move into the same complex or community as their friends. Friends follow friends; these are migration patterns.

Renewal rates are between 30% and 40%, so every year as an owner of a student-apartment complex, new residents represent 60% to 70% of those that live with us. The turnover in our rent roll higher than in other types of housing.

In our student housing, it's important to us to have a balance between students having a good time and students succeeding in school. I believe both are critically important elements and takeaways from going to college: you get educated in the classroom, but you're also “educating the whole person”—basically, growing up. Part of this is maturing as a young adult and balancing time to succeed in school, develop a social life and develop good interpersonal skills. Sometimes, seniors move out to live in a somewhat quieter environment. Some students move into Greek housing and move into independent housing after a year or two. If they didn't evolve, we'd have a housing crisis in higher education—we wouldn't have enough of it.

GlobeSt.com: The cost of attracting students is higher every year. Where are these monies spent to attract new students?

Pierce: This effort has been continually changing and has dramatically shifted to social media. The average operator spends between $100 a bed and $150 a bed per year on marketing. That does not include concessions; in strong markets there are no concessions, and in softer markets there are concessions. These are largely giveaways: gift cards, rent credits, giveaway items—things not dealing with placing advertising and promotions and holding leasing events, etc. The majority of markets don't have measurable concessions.

So, how do you reach students? Word of mouth; owners have often paid referral fees to residents because friends live with friends. Upwards of 40% to 50% of leases can come from friends of residents. Otherwise, it is social media: a combination of SEO to make sure through the various search engines that we show up on the first page. We've found that students start their search for student housing on the web, then they go to the website, and then they go to the property. Social media is ultra-critical.

GlobeSt.com: On a different topic—but one with which you are closely involved—what's your view on the SDSU West ballot initiative?

Pierce: I see it leading to victory for SDSU West. As you know, I'm an active member of the Friends of SDSU Steering Committee that supports the initiative. The initial polling that was done the day the initiative was announced showed that 67% of those polled were in favor of SDSU West and 33% were in favor of Soccer City. It shows how important higher education and SDSU are in our community. It's not just another development, but an education-driven development. SDSU West will insure the future growth of SDSU; conversely, Soccer City will close the option. It's no controversy that SDSU is one of the main economic engines in San Diego County, and there's almost no room for the university's growth on the mesa. It will have to grow elsewhere. To be optimal and synergistic, growth has to be proximate to the main campus, and it needs to have transportation linkages. It wouldn't be practical to be in Chula Vista or Carlsbad. Here, adjunct professors can keep their cars parked on the main campus and take the trolley to and from their research office.

We as citizens should never grant land-use entitlements through a ballot initiative. This is different. It's a matter of selling land to SDSU, and the community gets input on the master plan. It goes through a full CEQA analysis. It's the right way to do it.