Another student apartment building is planned on East 13th Avenue near the University of Oregon campus. This time, it will be a 15-story high-rise called Alder Chapter.
KLCC’s Rachael McDonald spoke with Eugene Weekly reporter Christian Wihtol who wrote about this project in his “Bricks $ Mortar” column.
McDonald: As a University of Oregon graduate, this project caught my attention since the construction will entail razing one of my favorite coffee shops from student days, the Espresso Roma. Tell us about the building and where it’s going to be?
Wihtol: Well, first, I'm sorry to hear about your sadness about Espresso Roma, but change seems inevitable. This project is going to be on, the footprint is going to include the Cafe Roma spot and then two properties that are on Alder– the closed Maple Garden Restaurant and a small old apartment house.
The apartment complex will not be right on the corner, which is a building that now has Dave's Hot Chicken and Jersey Mike's subs, so you can go there instead.
These buildings are owned by different investors and CRG Group of Chicago, which is the developer of the project, apparently has purchased deals for these properties.
This project is interesting because it probably will be the tallest student housing high rise so far in Eugene at fifteen stories. The plan is for there to be commercial space and some parking on the ground floor and then student amenities on the second– because students need their amenities– apartments on floors 3 through 14, and then more amenities on the top floor, a total of 491 beds. It's actually not that big in terms of bed count compared to some of the other projects.
McDonald: You reported that this will be the 2nd building by this developer near campus, and the first one—I'm going to sound really sentimental now—the first one entailed displacing another favorite of longtime Eugenians, the Excelsior restaurant. So do you know how well that building is doing?
Wihtol: I do not know. It opened just last fall, and in the apartment rental industry, projects typically are given a year to what's called stabilize, to achieve their realistic market occupancy level. And we do know there's competition among many of these new high rise, mid-rise student apartment buildings that all have very expensive rents.
McDonald: I think many of us who've been watching the transformations along 13th near campus may wonder if there's really a need for yet another student apartment building. Is there a demand for more apartments by campus?
Wihtol: Well, this really is a very dynamic situation with a number of moving pieces and it's also a numbers game. So, there's a big surge in student enrollment at the U of O from 1999 through 2012. Student numbers, enrollment went from 16,700 to 24,600. A big increase that spurred this initial drive to build more and more student housing. Then, enrollment dipped quite a bit during the pandemic, and now it's gone back up to pre-pandemic levels, and the new student developments seemed to be filling up for the most part. But, a local appraiser told me that the real test point will be this fall when enrollment numbers are clear and new ones like Chapter Eugene will have been open a full year and stabilized. And, at that point we'll see whether there are enough students to go around.
So an important thing to remember here is that this marketplace, it's very dynamic with moving parts. Anybody can live in these purpose-built student high rises. So, there's a case in point here that's interesting, which is the big Capstone Project which is now called 13th and Olive. It was built 10 years ago. It was the first big purpose-built student housing complex, 1,300 beds started off purely as student tenants.
But it is 10 blocks from the U of O and as new ones have been built closer into the U of O, the tenant makeup at 13th and Olive has changed. I've talked to renters there, and they tell me that there are a lot of non-student renters, just regular working folk, renting at 13th and Olive. So the marketplace is dynamic. Student renters looking for the best deal, and apartment and house owners looking to attract the best tenants and charge them the very highest rents they can.
McDonald: Well, speaking of high rents, do you expect with this glut of student apartments near campus, rents might go down?
Wihtol: Rachael, we never see anything getting any cheaper, so a decline wouldn't seem in the cards, but flattening out would be, kind of in the cards.
The student population of the U of O seems unlikely to grow vigorously, and Lane County as a whole has had only marginal population growth for the last few years.
And at the same time there's been a huge amount of residential construction here, not just the student high rises, but lots of multi-family apartment complexes and further out areas of Eugene and Springfield and also a lot of single family home subdivisions.
So at some point the supply will come more in line with demand and lead to some kind of flattening of rents.
McDonald: Well, you mentioned enrollment at the University of Oregon plateauing in recent years, and with the economic slowdown and political pressures and threats to higher education, do you anticipate there may be a drop in enrollment in the coming years?
Wihtol: The university tells me they expect only a slow gradual enrollment increase over the next few years, but you know, unexpected things happen unexpectedly. No one predicted the pandemic and the pandemic really hurt U of O enrollment and then enrollment bounced right back. One big factor that seems to be looming is. just the flattening out in the number of out of state students at the U of O.
The enrollment boom that took place back in 1999 to 2012 was due in large part to a lot more out of state students signing up for the U of O. That has leveled off and there's some anxiety that the out of state enrollment is actually dropping a bit.
And anecdotally, you hear that many of the out of state students who can afford the high rents are the occupants of these big new developments.
Note: Construction on the new Alder Chapter Building is expected to start in September.
Christian Wihtol is a reporter for the Eugene Weekly. He’s previously reported for the Eugene Register-Guard.
