Diamond Green, a $20 million, 92-unit private apartment complex at 1000 Diamond St., was constructed last summer as high-end student housing. But for the past four months, it’s been listed for sale for $31 million. And recently, speculation has emerged that the complex has a high vacancy rate. “I heard [Diamond Green] was 50 percent [occupied], but I’m not sure,” says Michael Petri, head of Blackstone Development, which has constructed student housing around the university for the last seven years. A source with knowledge of the Diamond Green development, however, said the occupancy rate was closer to 80 percent. In any case, Diamond Green is not the only Temple-area, off-campus housing facility that reportedly has some unoccupied rooms. And that raises the question: Is the neighborhood’s student-housing-driven construction boom about to go bust?
“We still think there is a high demand for student rentals,” says Corey Lonberger at Rittenhouse Realty Advisors, listing agent for Diamond Green.
Temple, for one, may be edging out the competition. The university recently completed a 1,275-student dorm, Morgan Hall, at Broad and Cecil B. Moore. It also terminated its longstanding lease with The Edge, an 800-unit apartment complex constructed by real-estate developer Bart Blatstein in late 2006 and now managed by the international Campus Living Villages Corp.
A decade ago, a shortage of dormitory space and a profusion of vacant land led to an explosion in construction of student rentals. The rapid pace of the development was not without pain: Neighbors complained about illegal dumping of construction materials and there was an increase in crimes involving student victims just off-campus. Temple estimates that half of its 12,000 student residents live in private, off-campus units. Morgan Hall was built to rein in that growth.
So is student housing reaching a saturation point? Developers, like Petri, say the vacancies at The Edge and Diamond Green are off because of the units they offer. “The Edge has pretty small rooms and the Diamond Green is at the edge of the campus area, at Diamond and 10th. Everybody else who I talk to is pretty much full. … It all depends on the size and location of the units,” said Petri. However, he later added that he had a few buildings on the east side of Broad Street that were only 60 percent to 70 percent full.
Statistics can at least confirm that developers are still confident the area will continue to grow. New construction permits in the area are at an all-time high: Ninety-two have already been pulled around Temple this year, compared to 64 for all of 2012, according to L&I records. It’s possible that Temple’s 25,000 non-resident students could continue to fuel the real-estate market around the university for years to come, buoyed by actual homeowners from the growing neighborhoods around Center City. But if students are already balking at living in tiny, expensive apartments at centrally located complexes (a “large” studio measures 268 square feet and costs $999 per month at The Edge, a significantly higher per-square-foot cost than most Center City offerings) or “remote” dwellings at 10th and Diamond, it seems unlikely that many non-students would be lining up to take their place.
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