Scion Group is leading a joint venture that will transform a student housing complex near DePaul University, in Chicago, into a 580-bed co-living space aimed at students and recent graduates, according to Crain’s Chicago Business.
Located on the city’s north side, 1237 West, which rents from $964 a month per bed, comprises two-, three-, and four-bedroom furnished apartments. Community amenities include a 24-hour fitness center, bike storage room, business center and social events.
The joint venture, which also includes the Canada Pension Plan Investment Board and GIC, recently completed $1.9 billion in deals for 29 student housing projects. Along with 1237 West in Chicago, the purchases included properties in the college towns of Chapel Hill, NC, Madison, WI, and Charlottesville, VA.
Depressed wages and student loan debt have left many 20-somethings on uncertain footing immediately after graduation, so 1237 West and communities like it around the country offer an additional housing option that may fall below traditional rates. For example, recent estimates by real estate brokerage Nested place average single-person rents in Chicago at roughly $1,047. Rents at 1237 West start below that, including utilities, while also offering housing in the sought-after neighborhood of Lincoln Park.
Student and young professional-focused projects like 1237 West tend to include amenities that millennial renters may not find at other properties in their price range. According to Building Design and Construction, must-haves for young renters include a sense of community, options that support healthy lifestyles beyond physical fitness, and communal areas that can supplement smaller living spaces.
The Scion Group’s moves in the space come at a time of peak demand for student housing, with many schools lacking sufficient inventory and looking to bring more privately owned, purpose-built beds into the surrounding community. A report this past fall from property-management company AppFolio and Axiometrics forecast that 47,800 beds would be added in fall 2016 with the count for fall 2017 expected to be on par with or ahead of that figure.
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