By Tyler Perlmutter
I remember sitting among my fellow classmates on graduation day for the class of 2014 at the University of Denver. My family had traveled from Chicago to celebrate this major milestone in my life. However, all I could think about was, “where did the time go?” and, “has all the fun come to an end?” It was very bittersweet for me. On one hand, I was happy to not have to study for any more tests (at least in the interim); on the other hand, the idea of getting up early every day to go to work was daunting.
When the first Friday of my first semester in college came along, I calculated exactly how many weekends I had remaining to enjoy myself before entering the real world. I figured out approximately how many weekends I would have to go to the various ski resorts throughout Colorado to snowboard. I was very strategic in my scheduling of classes to make sure that I never had class before 10 a.m., I never had class on Friday and I always had breaks between classes. Let’s just say I was a natural at enjoying every second of my time in college. But all the fun seemed to come to a screeching halt. No more would I be in control of my schedule, no more would I be surrounded by the college lifestyle that I had come to love. How could I possibly be forced to sit at a desk from 9 a.m. to 5 p.m. every day for the next 50 years of my life? I was doomed, or at least that’s what I thought.
A few months after graduating I went to work for Pinecrest in Chicago. Pinecrest is a student housing owner and developer and is an affiliate of the Perlmutter Investment Company, which was founded by various members of my family in 1998. Prior to graduating college, I had completed two summer internships with International Airport Centers (IAC), another affiliated company of Perlmutter Investment Company that focuses on the development and management of modern distribution warehouse facilities through- out the United States. IAC was my first taste of real estate and I was hooked. I loved the challenge of sorting through the various pieces to the puzzle that are necessary to turn an idea into a profitable asset.
Around the beginning of my junior year, my dad came to me for some insight into what students living in purpose-built housing projects would want or need. He want- ed to know about amenities — pools, hot tubs, sinks, showers, connectivity, social events, TVs, parking, counter tops, bedrooms, bathrooms, furniture, security, proximity, views, management, balconies, and on and on. Fortunately, I have three siblings and he asked them too, along with their friends and their friends’ friends. Immediately I realized my age and current experience of living in a college environment could be extremely valuable for a student housing development company. I started to take a hard look at the purpose- built projects around the University of Denver to see what students liked and used. I paid attention to the layouts of my friends’ units and discussed with them both the pros and cons of their experiences in living in purpose- built projects.
Fast forward three years, and my main role at Pinecrest today has evolved into sourcing potential development deals for the com- pany, and helping to make key operational decisions with the college student in mind. I do this by creating and maintaining genuine relationships with key developers, owners, managers and brokers in the sector; identifying markets where student housing investment is attractive; visiting markets where student housing projects have been positively absorbed and perceived as the ideal place to live; and, of course, by using natural instinct to think like a student, absent the beer. When we find a project that sparks our interest, I do extensive market research into the university in which the project is located near, study the competing projects in the market and run financial models on the economic feasibility of the project.
Many of these pre-development steps are likely consistent with how other organizations in this sector look at a deal, however my small gap in age to our potential residents has helped Pinecrest understand how to evaluate a development beyond the numbers on a computer screen. First, my age has allowed me to visit many buildings in markets to take a look at which community amenities are used, what type of apartment amenities are desirable and whether or not a project’s proximity to cam- pus and the social scene makes it the most desirable place to live. I have found that there are a lot of amazing assets in almost every market we identify, which must be attributed to the passion for excellence we see in many organizations in this sector. It is extremely valuable to walk through an existing purpose- built community to understand the vibe of the project. You will get a real sense of how well the project is perceived by the look on the faces of the staff and residents. If the staff isn’t happy, the residents won’t be happy.
Another advantage of being a recent graduate is that I know many people that either attend or have recently graduated from almost every school we visit. This has allowed Pinecrest a firsthand look into which communities are most desirable and why, and gives Pinecrest insight into the preferred hot spots on and off campus. While we are looking at the supply/demand and location fundamentals, we also learn about what drives students towards attending the university. As it wasn’t too long ago that I was applying to schools myself, I remember what was important as a prospective student.
All of us who work in student housing are extremely lucky. We all aim to develop, own or manage facilities that are built to create a positive experience for our residents. If you are like me, you care how your residents and staff feel about where they live and work. While there are various sectors within real estate, student housing is evolving quickly. It is innovative — and certainly provides the most fun business trips.