A Student Housing Renaissance

Nick Zaferes is director of engineering and facilities management for College Park Management and GMH Communities Trust, owners and operators of apartment complexes and commercial buildings throughout the United States. Zaferes’ responsibilities include engineering, facilities management and construction. On the engineering side, the company determines engineering needs for its properties, including disbursement of capital dollars and capital accounting. Facilities management includes maintenance and operational needs for the properties. The company handles architectural and engineering services and builds apartment complexes that can be done on a GC or CM level. Zaferes received a Bachelor of Science degree from Temple University in Business Administration.

School Construction News: Tell us about GMH Communities Trust’s student housing. What kinds of amenities are becoming standardized?

Nick Zaferes: GMH Communities Trust was formed in October of 2004. We are in both student housing and military housing. Our start, 20 years ago, was in student housing and we’ve entered military housing in the last few years. In the trust we own and manage properties. We also, on the College Park side, have about 25 properties we manage outside of the Trust. GMH Communities Trust is traded on the New York Stock Exchange under GCT. We are looking to expand those portfolios. We want to acquire college housing and we have just closed on two properties in State College, Penn., which we previously managed.

We’re a little closer to the College Park assets here in engineering, and we own about 60 apartment complexes and deal with the daily duties of running the properties. From the bigger picture, we deal with the banks and lenders to make sure that we have the proper cap-ex dollars to run these properties. Our average property is about 200 units, but they go up to 1,000 units. They are large complexes with multiple buildings and big budgets. A lot of my job is properly allocating money to keep our product in Triple-A shape, and our portfolio is definitely a Triple-A portfolio. We don’t own mom-and-pop operations. These are properties that you and I would be comfortable living in. We furnish our properties with nice furniture; they have clubhouses, pools and amenities such as tennis and volleyball courts, and DVD theaters. We are real cutting edge.

SCN: How many properties do you manage? What is the average number of units per property? Number of beds?

NZ: I believe we have approximately 60 properties in about 30 states. We have 40,000 beds.

SCN: What are some of your biggest challenges when it comes to facilities management?

NZ: Putting the right people in place. That’s one of the highlights of our facilities management side. I’m at the top as director, but I have six great guys that work as area and regional facilities managers. They are all very experienced with 10 to 20 years in apartment facilities. They each have about 10 properties. What we do is have a multi-tiered level ofmanagement. It starts on Monday morning with the maintenance supervisor and the property manager at the property level talking about their problems. On Tuesday, the maintenance supervisor gets together with his or her regional manager and they sort out what is a real property level problem and what is a regional problem. On Thursday, we discuss national-level problems. Those could be problems that require a lot of funding.

Yes, we are student-level housing and 19-to-24-year-old people act a little different than older residents, so our facility side is quite busy. Another thing that goes along with marketing to the younger folks, which I absolutely love, is that they are really high-tech.

We’ve experienced a technical renaissance in the last several years and they expect their complexes to be Triple-A, resort-style properties with all the technical, Internet, online, wireless capabilities that a 20-year-old would want. We have Xbox live, wireless Internet, huge download capabilities and computer labs. We are always looking to keep the insides and outsides of our facilities cutting-edge.

SCN: What surprises you most about your job? About the students you serve?

NZ: I really like working with the younger residents for the reasons I’ve mentioned. I also enjoy multiple locations. I’m on the West Coast as much as I’m on the East Coast, and when I’m not there, I’m in the middle. I enjoy getting out and talking to our clients and residents. If you don’t like young people, you shouldn’t be in this business. I like providing the young residents with a springboard for their future.

SCN: Lets talk about maintenance. How does your online work order system work?

NZ: We have some very advanced systems in the engineering department. The work order system is one of them. The resident actually goes on his or her computer, logs on to our Web site, clicks on work orders, and enters the work order, which electronically goes to our maintenance supervisors who sort them out. They dispatch someone within 24 hours to fix the problem. It’s closed out the same way. Many other of our management systems are also online. We report our maintenance protocol online, along with all of our capital budgets. That way our people on the regional level can understand how much they have spent out of their capital appropriations. We’re very automated. We don’t use a lot of paper.

SCN: How do you administer facilities management or your CMMS system? What kinds of systems work best online and on a national scale?

NZ: Of course we have the work order system and our capital expenses are all online. Our safety systems are all nationalized and online, and that includes HAZMAT processing and our safety and OSHA awareness. Our purchasing systems are online. We are also proud of national companies with whom we have exclusive buying rights, including Home Depot, Sherwin Williams, University Loft, Wal-Mart — there are 10 or 12 of them.

SCN: Can you tell us about your online capital management?

NZ: There are three sources of funding for most of these properties. One is operational, the second is capital reserve dollars and the third is institutional reserves. It’s my job to manage the monthly reserves so that the monies go into the things they should. We are actually buying depreciable assets. It’s part of my responsibility to make sure we’re moving depreciable assets out of the income stream and into the balance sheet. That’s something we look at on a quarterly basis.

We are also involved in institutional capital. When we purchase an asset we deal with the banking institution to make sure we have enough reserve in pocket. That reserve can either be held by the institution or by the trust; we want to make sure we have enough money to ensure the asset is College Park branded and College Park standard. It’s not unusual for us to take $1 million to $2 million when we buy a property and allocate those monies to bring apartment complexes up to our standards.

We consider ourselves in the marketing department as very involved in our "branding," such as the way things like our entrances are supposed to look, and our clubhouses and our maintenance facilities.

SCN: Since CPC’s inception in 1992, more than $275 million in residential and student housing construction has been completed. What types of housing comprise the bulk of it? What kinds of housing do students want? Are dorms a thing of the past, even for freshmen?

NZ: I would say that the predominate thing that we build is a garden-style apartment complex: a three-story, breezeway-type structure. They aren’t much different than other luxury apartment complexes, they are just a little plainer and simpler. More emphasis is placed on the amenity package. Our typical scenario is a four-bedroom apartment with four bathrooms in about a 1400-square-foot complex. There is a common area with a kitchen and living room. We supply all the furniture and we provide a complete state-of-the-art system.

There is still a need for a dorm-style product. That’s for our younger residents, our freshmen and sophomores. Their family members are probably more comfortable with them living in a dorm setting. That’s about 10 percent of what we do. The norm seems to be going to the typical rolling hills, garden-style type of community with 15 buildings, 200 units and about 600 beds.

SCN: Is design/build a preferred construction delivery method? Or do you go with a traditional design-bid-build?

NZ: We’ll definitely put the parameters out. We will use some design/build in the actual design/development process. My opinion is when you get to the final construction drawings, I don’t like having too much design/build there. I like to get to the construction drawings, bid the job and get it done. I don’t like having that uncertainty at the end with design/build.

SCN: What kinds of student housing renovations have CPC completed?

NZ: We had two last year. One of them was College Park at State, in downtown Chicago. It’s not far from the Sears Tower. We took a luxury high-rise apartment centrally located to several universities and converted it to a student complex. It’s a 29-story building with all the associated issues. Our renovation included complete exterior renovations, a new office building and office front in the lower levels, renovations to the indoor pools and clubhouse, kitchens, fitness centers and corridors. All the interiors. Today it’s one of our biggest success stories and something I’m very proud of.

SCN: Is deferred maintenance a large portion of the renovation work or a separate areaentirely?

NZ: We like to try to keep up with deferred maintenance on a quarterly basis. In our leases we are allowed to enter the apartments, with notice, on a quarterly basis. The property manager and maintenance supervisor enter and that gives us a good clue about what has to be done. From these inspections maintenance lists are posted and work orders are generated. This way we don’t have a big surprise a year later when a student moves out. We know what problems are happening on a quarterly basis.

SCN: What types of student housing do you envision in 2020?

NZ: Construction materials will be changing. Carpeting and flooring will be changing to more durable surfaces. That’s one of the things we change out most often. You can imagine: Our residents are very rough on carpet. I’m looking forward to the changes in roofing and framing technology. I think finishes will also be more of a polymer finish. I envision a world, some day, when recyclable steel and plastics will be making up the structure of these buildings.

SCN: Are there plans to expand operation and management of student housing into new states?

NZ: I’m on my way to Chapel Hill, N.C., to look at a new complex there. We are aggressively seeking housing that is designed for students. We look for key components — private bathrooms and bedrooms, for instance. I’d say that 97 percent of student housing is fragmented, with a lot of individual owners. We are looking to consolidate and buy land in close proximity to a college or university.

SCN: Do you find similarities between student housing and military housing, in terms of maintenance and construction?

NZ: Yes, very much so. I was involved at the inception of military housing and have been involved in the design. Our work order systems are very similar and our property management systems are similar. I believe we have experienced success on our military side because our structures and systems have been set up for multi-family housing. Servicemen and women have different needs than college students, but there is a similarity between the 22-year-old college students and the younger families who are serving our country now.