The off-campus housing concept, though, is not for everybody. It's only attracting the institutional investors, who have the capital to push the “big projects.” JPI's Jim Truitt, vice president, says the average 750-bed apartment complex runs in the $20-million to $25-million ballpark, coming in $3 per sf to $5 per sf less in construction costs than a traditional project. With costs pushing the $90,000 mark for a four-bedroom, two-bath unit, it's definitely not a game for everyone.

Truitt estimates JPI's student housing component comprises about 20% of the company's portfolio. On the return side in the off-campus sector, “it's 50 to 100 basis points premium in yield over conventional apartments,” says Truitt. The average monthly rent brings $425 per bed plus utilities.

JPI is always looking for new markets to bolster its 23,000-bed portfolio and advance its plan to build three or four such developments per year, according to Truitt. The problem is, he says, some markets are now edging closer to the “overbuilt” stage. Those in the game follow the 18- to 24-year-olds, making the West Coast and South fertile development ground. Truitt, like others in the industry, says student housing will become even more of a development opportunity in the next eight to 10 years as more first-time freshmen enter academia's gates.

Truitt credits the success of the niche market to more than just the innovative shared-living concept. Functional obsolescence of the competition and deferred maintenance share in the success ratio, he says. JPI is as aggressive as its competitors in its bid to corner the market. “We continue to think it's a good opportunity going forward,” he says.