Real Estate Development of Off-Campus Student Housing Harvard Case Solution & Analysis

Benefits of luxury student-housing development

There was a high demand of houses build near the University of Florida. After the analysis, Lenard knew that there is a shortage of housing near the University In 2010 the population of the Madison, capital of Wisconsin is 568,593. Since 2000, the percentage of population of Madison was increased by 12.1%. Madison became the main hub of the education and the government activities. But within the past 20 years, this city also became the hub of highly technologies companies. For the job and academics growth, Madison was considering as one of the top ten cities according to the Forbes magazine. The increase number of entrance of technology based businesses and the increased in the local employment growth would create strong and positive impact on the rental housing.

After completing the market analysis, it was concluded that the rent in these area has been enhancing and growth rate is between 2.5% and 5%, each year. So the average of the rentals off-campus bedrooms was reach up to $520 to $760.This becomes the benefit for most of the real estate businessman to make profit by building houses near the university.

Furthermore, for the students the housing campus is not enough in the area of university. That’s why the student start to looking towards the multifamily properties that is near to the campus. The trend shows that the real estate businesses are growing strongly.

Real Estate Development of Off-Campus Student Housing Harvard Case Solution & Analysis

Cost of luxury student-housing development

Slater and Lenard have limiting leases to the students’ use. In leasing the house only for the students they cannot use the limit facilities. Because the small portion of students could not afford the charged rental fees.

Slater and Lenard might face some of the problem in building the off campus houses. Because they are using the same theme and the model of developing student housing at the University of Florida for developing student housing In Madison.

The climatic change can also impact negatively on the success of the model of developing student in Madison. The construction cost also different in Madison as compare to the cost of construction near to the University of Florida.

Slater and Lenard use the previous model for the construction of housing in the Madison with little changes. The cost is $109 per square and $75,000 is the demolition cost. So the total estimated cost of soft was approximately 3.25% of the total estimated hard cost. The vacant land is not much available to build this new project. The tax rate in Madison is much higher than in Florida.

  1. Explain the feasibility analysis provided in the case and critique it as a basis for decision- making. Your critique should include both a discussion of what is wrong with the technique as well as what may be wrong with the assumptions within the specific application of the technique.

Feasibility analysis and critiques

The financial feasibility is shown in the table # 1. It starts with NOI. This suggested NOI would be produced when the student housing project developed and existed. The calculation of all the financial feasibility is based on the NOI of the property and some assumptions related to the mortgage finance aspects.................

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