Stony Brook University - Student Affairs

EXECUTIVE SUMMARYB&D further analyzed the Target Market and identified demand for 100-150 professional studentbeds:Potential MaximumOn-Campus Housing Type: Distribution of DemandEnrolled Capture Potential Studio Apt 1 bd Apt 1 bd Apt 2 bd Apt 2 bd Apt 4 bd Apt 2 bd AptPopulation Rate Demand Single Single Double Single Double Single FamilyTotal Demand (# beds) 8,416 1.2% 103 8 68 0 0 12 0 16Existing On Campus Beds 0 0 0 0 0 0 0 0Surplus/(Deficit) (103) (8) (68) 0 0 (12) 0 (16)Based on the findings of the market analysis, B&D worked in conjunction with the Graduate andProfessional Student Housing Steering Committee to develop a housing program that wouldaccommodate both graduate and professional student demand. The program offered a maximumof 400 beds in one- and two-bedroom, single occupancy apartment configurations and alsoincluded high-quality amenities such as air conditioning, in-unit washer and dryer, dishwasher,convenience store, storage space, a computer lab / printing station, fitness room, and communityroom.The financial analysis conducted by B&D includes assumptions related to construction costs(hard and soft costs) provided by Sasaki Associates, Inc. and Vermeulens Cost Consultants aswell as operating costs, occupancy rates, and inflation rates that were confirmed by Stony BrookUniversity’s Financial Services Administrator.As a part of the financial analysis, B&D determined that revenues supporting the proposed projectwould primarily be derived from room rentals. Rental rates for the proposed project were set at$1,679 / month / student for a one-bedroom apartment and $1,158 / month / student for a twobedroomapartment (at opening). The resulting financial scenario indicated that the proposedproject does not meet the desired debt coverage ratio (DCR) level of 1.10 and is not financiallyfeasible. Based on the financial model, a financially viable project could support a total projectcost of $61.5M and meet the preferred DCR of 1.10 by Year 3.Next StepsB&D’s analysis indicated that there was sufficient demand for a high-quality, amenity-rich housingfacility that would cater to graduate and professional students. However, a self-sustaininggraduate and professional student housing project is difficult to achieve due to limited rentalrevenue. As is the case with many graduate and professional student housing projects, theproposed project did not prove to be financially feasible at the current time.Upon presenting the results of the market analysis to Stony Brook University, B&D worked closelywith Sasaki Associates, Inc. to provide recommendations that will “narrow the gap” between thefinancial scenario presented and a financial scenario that will allow the project to “break even” (avariance of $8.5M).Stony Brook UniversityGraduate & Professional Student Housing StudyPage 5