BRAILSFORD & DUNLAVEY

Comprehensive Housing Market Analysis DRAFT - Executive Summary December, 2007 BRAILSFORD & DUNLAVEY

Presentation Agenda Scope & Schedule Review Goals & Objectives Market Analysis Summary Recommendations

Scope & Schedule Review Original Schedule

Goals & Objectives Strategic Asset Value (SAV) SAV Work Session • Educational Outcomes • Enrollment Management • Campus Community • Financial Performance Guides Decision Making • Quantity and Location of Housing • Target Market and Unit Types / Programmatic Priorities • Financial Accessibility & Quality Reconciliation • Level of Service / Underwriting Criteria & Institutional Will

Goals & Objectives SAV Review Educational Outcomes • Freshmen focus and facilities appropriate for freshmen through senior students • Encourage greater faculty participation Enrollment Management • Provide enough housing for 100% freshmen and guarantee Sophomore housing Community Creation • Increase density of students on northeast campus (Hill Square) to establish critical mass • Out of class activity focused at the College House level Financial Performance • New developments should implement sustainable practices per University standards • Achieving occupancy is more important than achieving debt coverage

Market Analysis Off-Campus Housing • What’s the market (student perspective) • Rental rates / occupancy performance • Market focus & services • Measure impact of location, product type, condition, amenities on prices & occupancy • Consider the dynamics • Demand shifts (student & non-student) • Projected & potential additions to supply (reductions?) • Impact of zoning & land-use policy • Market concentrations

Off-Campus Housing Development

Off-Campus Housing Development 12% of Undergrad & 8% of Grads prefer New Luxury Unit Proximate to Campus

The Radian

Market Analysis Student Focus Groups • Information goal is qualitative • What students care about (identify issues) • Why they care about it • How much they care about it • Format & Process • Groups of eight to twelve • Planned strategy (macro => micro) • Test prevailing wisdom, intercept information & concepts

Market Analysis Student Focus Groups - Undergraduates • 3 focus groups, 30+ participants • 2 undergraduate on-campus focus groups, both with 10 students each • Students were a diverse group, all academic years, varying majors, and with good representation from RAB as well as other students drawn at random to participate. • 1 undergraduate off-campus focus group, with 12 students • Students typically look at Penn and other Ivy League Schools • Student are familiar with the College House system • Freshmen use the Residential Programs to get preferred housing • Navigating the College House system is difficult • Overall, students enjoyed living on-campus but were turned off by the housing selection process, decentralization of administration and the disparities in College House conditions and policies • Sophomores feel stuck: stay in current hall or move off campus • About ½ have changed College Houses • Many because Quad and Hill are freshman focused and offer facilities that are less appealing to upper class students • Satisfaction higher for students at smaller College Houses • College House system isn’t perceived as 4 year experience • Off-campus leases begin in November & December • Risk the system or go off campus

Market Analysis Student Survey • Quantitative measure • Current housing choices • Views of existing housing operations • Preferred housing options • Demographics • Data analysis • Sample size & integrity • Cross-tabs • Demand modeling

Market Analysis Student Survey • 4,669 Surveys • 20% of student population • Closely match student demographics • +/- 1.44% margin of error (95% confidence level)

Market Analysis Survey Analysis - Undergrad • 87% of students said sense of community was important to their college experience • 63% prefer to have freshmen-only halls • 77% felt it was important to have freshmen-focused communities • 23% prefer to living in mixed communities • 60% felt is was important to have mixed communities • 94% felt is was important to guarantee freshmen & sophomore housing • 91% felt is was important to provide suitable junior & senior housing • 64% of off-campus students live in 4+ bedroom units • 80% of off-campus students found living conditions convenient to class, work, etc. • Median Rent $750/mo incl. utilities (83% 12.mo lease - $9,700/year incl. deposit) • 25% prefer a 4-bedroom single on-campus (all other units 2-8% each)

Market Analysis Peer Institution Analysis College House Peers • Brown • Rice • Harvard • Yale • Princeton • Columbia • Cornell • Chicago • Wash U. • Stanford Levels of Research • Programs • Policies • Unit Design & Amenities • Community

Market Analysis College House Drivers Key Policies: • Random Assignment to College House • Harvard has Freshmen House System followed by So.-Sr. College House • Commitment thru Sr. Year (Princeton expand Jr & Sr. by 2009) Key Facility Requirements: • Dining halls in each College House • Common Rooms • 300-500 Students Other Key Factors: • High percentage of students living on campus 70 - 98% • History: College House Systems are 60 - 100years old • No Greek System (Yale is an exception)

Demand-Based Program (DBP) Capture Rates

Demand Based Program (DBP)_ Undergraduate Demand (includes impact of Radian)

Demand Based Program (DBP)_

Recommendations Existing Conditions Risks: • 500 bed Radian comes on line in 2008 • Analysis shows that 168 undergrads from on-campus will relocate to Radian • New 340 Bed Complex 2010 • Will dilute on-campus demand for, and impact occupancy of, less desirable units and houses Risk Mitigation Strategies: • Strengthen College House System with Key Policy Changes • Create Freshmen House system (with appropriate bed type and amenities) • Create link to College House for freshmen to matriculate as sophomores • Guarantee Sophomore Housing • Provide market responsive housing to upper-class students • Convert Sansom to College House or Graduate (not current hybrid) • Develop New Housing as Market Responsive College House Model

Recommendations College House Goals Goals: • Enhance identification with House • Retain both first and second year students • Retain all upper-class students wanting to remain on campus • Make the best use of existing facilities • Small Traditional Houses for Freshman • Ideally with Separate Dining and Programming Areas • Larger Houses with more amenities to attract Upper-class students • Graduate Housing based on Market Demand

Recommendations Key Policy Changes Institute Freshmen College & Upper-Class College House System • 2009 Freshmen in traditional-style houses • Fisher-Hassenfeld, Hill, Kings Court / English, Riepe, Ware • Capacity: 2,349 beds 2006-07 Freshman Class Size: 2,385 students • 2009 Creation of two university-wide College Houses • Gregory, Du Bois • College Houses that accommodate Freshmen through Senior Students • 40 Freshmen in Du Bois / 40 Freshmen in Gregory • 2010 Sophomores, Juniors, and Seniors in mixed-unit College Houses • Stouffer, Rodin, Harnwell, Harrison • Balance between Sophomore and Upper-Class students so that both groups represent no less than 30% and no more than 70% of the House population

Recommendations Key Policy Changes with New Development Institute Freshmen College & Upper-Class College House System • 2010 Sophomore Housing Guarantee • Bed assignments can accommodate 62% of Sophomores – the maximum number of beds demanded by surveyed students • 2010 Sansom remains primarily Graduate Housing with approximately 300 Undergraduate Beds • 2010 New College House is Developed • Balance of Sophomore and Upper-Class Students • Suggested configuration based on Demand: • 140 Private Suite beds • 200 Three- or Four-Bedroom Apartment Private beds

Recommendations Key Policy Changes & New Development Capture Rates / Assignment Reconciliation House Configuration

Recommendations Scenario I – Sophomore Guarantee & Sansom as Graduate Housing Institute Freshmen College & Upper-Class College House System • 2009 Freshmen in traditional-style houses • Fisher-Hassenfeld, Hill, Kings Court / English, Riepe, Ware • Capacity: 2,349 beds 2006-07 Freshman Class Size: 2,385 students • 2009 Creation of two university-wide College Houses • Gregory, Du Bois • College Houses that accommodate Freshmen through Senior Students • 40 Freshmen in Du Bois / 40 Freshmen in Gregory • 2010 Sophomores, Juniors, and Seniors in mixed-unit College Houses • Stouffer, Rodin, Harnwell, Harrison • Balance between Sophomore and Upper-Class students so that both groups represent no less than 30% and no more than 70% of the House population

Recommendations Scenario I – Sophomore Guarantee & Sansom as Graduate Housing Renovate Sansom for Graduate Housing • 2010 Sansom is renovated to accommodate Graduate Housing Demand • Efficiency / One-Bedroom Apartment Private Beds • Two-Bedroom Apartment Private Beds • No Undergraduate Students Remain in Sansom • 2010 New College House is Developed • Balance of Sophomore and Upper-Class Students • Suggested configuration Based on Demand: • 140 Private Suite beds • 200 Three- or Four-Bedroom Apartment Private beds

Recommendations Scenario I – Sophomore Guarantee & Sansom as Graduate Housing Capture Rates / Assignment Reconciliation House Configuration

Recommendations Scenario II – Sophomore Live-on Requirement & Sansom as College House Institute Freshmen College & Upper-Class College House System • 2009 Freshmen in traditional-style houses • Fisher-Hassenfeld, Hill, Kings Court / English, Riepe, Ware • Capacity: 2,349 beds 2006-07 Freshman Class Size: 2,385 students • 2009 Creation of two university-wide College Houses • Gregory, Du Bois • College Houses that accommodate Freshmen through Senior Students • 40 Freshmen in Du Bois / 40 Freshmen in Gregory • 2010 Sophomores, Juniors, and Seniors in mixed-unit College Houses • Stouffer, Rodin, Harnwell, Harrison • Balance between Sophomore and Upper-Class students so that both groups represent no less than 30% and no more than 70% of the House population

Recommendations Scenario II – Sophomore Live-on Requirement & Sansom as College House • 2010 Sansom is converted into a College House • Balance of Sophomore and Upper-Class Students • No On-Campus Graduate Housing • 2010 Sophomores Live-On Requirement • Approximately 85% of Sophomores are required to live on campus • 2010 New College House is Developed • Balance of Sophomore and Upper-Class Students • Suggested configuration based on Demand: • 140 Private Suite beds • 200 Three- or Four-Bedroom Apartment Private beds

Recommendations Scenario I – Sophomore Live-on Requirement & Sansom as College House Capture Rates / Assignment Reconciliation House Configuration

Comprehensive Housing Market Analysis DRAFT - Executive Summary December, 2007 BRAILSFORD & DUNLAVEY

BRAILSFORD & DUNLAVEY