Three Essential Steps for Getting the Best Bulk Services on Student Housing Properties

Students using Technology

Choosing the right bulk and premium services for a student housing community is not always a piece of cake. The process requires three essential steps: First, determine what services are necessary to meet the majority of residents’ expectations. Second, obtain apples-to-apples bids from multiple providers. Third, choose the solution that maximizes value for the community. The true measure of success in this process is how cost-effectively the service meets residents’ expectations – realistic or otherwise.

Complicating matters further, expectations shift rapidly with advances in technology and service offerings.

Identify Necessary Student Housing Services

Choosing “one-size-fits-all” solutions either fail to meet resident expectations or wastefully exceed them. Each student housing community is unique and requires its own solution. Even adjacent communities with the same providers, unit mixes, rent levels, and management companies can require slightly different bulk services.

Because residents’ expectations are not always realistic, owners must attempt to influence those expectations from the outset – for example, by explaining that wireless Internet is unlikely to be as responsive as a wired connection. Students typically consume bandwidth with little understanding of the underlying technology. If a service fails to perform as they feel it should, their satisfaction with the community plummets. And retention and reputation suffers.

Compare Apples to Apples

The second challenge is to obtain apples-to-apples proposals from the service providers. Getting proposals is usually not a problem. But getting proposals that allow for direct, point-by-point comparison takes significant effort. Providers have different technologies, programming lineups, service tiers, rate structures, financing costs, contracts, and so forth. All these variables affect the value proposition.

To make matters worse, some providers understandably promote services and comparisons that emphasize their strengths. In recent years, many providers have tried to undercut competitors’ prices by bidding lower service levels or excluding equipment. Cable television can be much cheaper without favorite channels such as ESPN or the digital converter boxes needed to actually receive the channels.

Maximize Value with Your Solution

Do your best to obtain proposals that are roughly equivalent and, if possible, discount the monthly expense to current dollars and add the result to any up-front costs to obtain a total value for each provider.

Total value = (up-front costs) + (present value of monthly expense over contract term)

Don’t forget that “cost” has multiple components. The cost of Internet services, for example, includes infrastructure, bandwidth, upgrade management, legal and other liabilities, PLUS taxes and fees. Many video providers charge more than 14 percent of base costs in taxes and fees alone. Determining which solution maximizes value is also complicated by differences in infrastructure, existing contracts, budgets, ownership structures, and other factors.

Short Term Not Good for the Long Run

Don’t be fooled by short-term fixes, either. Bulk service agreements are long-term contracts in markets where the services constantly evolve. Short-term fixes, especially those focused on immediate cost reduction, often lead to greater long-run costs. Owners of student housing properties should evaluate these services strategically.

Though no one solution will both meet student residents’ expectations and be cost-effective for every community, by identifying expectations, obtaining apples-to-apples bids, and strategically analyzing options, owners can maximize the value of bulk services to their apartment complexes.


Vice President, Technology Services, RealPage
henry.pye@realpage.com

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Henry Pye is vice president, Technology Services. His team provides advisory services related to voice, video and data services, access control, audio-video and lifestyle technologies, and other low voltage amenities to multifamily developments, acquisitions, and existing communities. Henry has managed resident technology services for hundreds of communities in the U.S. and Canada. Previously, he led the JPI Resident Solutions team providing expertise and advice internally to JPI and third-party multifamily owners. Prior to that, he worked in JPI’s Luxury Multifamily Development, Luxury Multifamily Acquisitions, Student Living Development, Student Living Acquisitions, Market Research, Project Finance, and Information Services departments. Henry authors the “Owners Corner” series for Broadband Properties Magazine and co-chairs the Multifamily Education Series for the Broadband Properties Summit. He has authored numerous articles and is active in industry organizations and conferences. In 2002 and 2006, Broadband Properties Magazine included him in its quadrennial listing of the Most Influential People in Real Estate & Technology. Henry graduated with a Master of Business Administration degree from the SMU Cox School of Business and a Juris Doctor degree from the SMU Dedman School of Law in 1997.

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