Living in the lab of luxury. If you’re looking for rooftop swimming pools, in-building gyms and shiny rec rooms, then a luxury student apartment may be your first option. Characterized by a $1000 rent minimum, luxury student apartments dot W Gorham St., State Street and University Ave. Well-known names include the James, the Hub, Lucky and the Towers on State.
And if developers have their way, then there will be plenty more luxury high-rises on the horizon.
When a developer proposed “Hub II”, a seven-story student apartment building with a rooftop swimming pool to be built on Langdon Street, then-student and District 8 Alder Sally Rohrer remembered being “sketched out.”
“It felt so strange when something’s happening that’s going to affect students, but it’s not being advertised to them. It wasn’t being widely talked about on campus,” Rohrer recalled of the 2019 project proposal. “There was a lot of sketchy business with the developers getting students to testify in favor of the development. ”
The 124-unit building — slated to be nicknamed “The Langdon” — was designed to occupy the empty lot at 126 Langdon St. and serve as Core Spaces LLC’s third student apartment building in Madison alongside the James and the Hub. Its location would situate the apartments within a historic downtown neighborhood between the University of Wisconsin-Madison fraternity and sorority houses.
Sure enough, when Greek life heard about the project, many were less than pleased.
“We found out, once you started telling people what was happening and talking to Greek life, that the majority of people didn’t want this to happen. It was one of those experiences where you realize that stuff like this can fly under the radar,” Roher said.
In the end, the question of cost wasn’t what put the project on hold. The Madison Plan Commission ultimately voted to reject the Hub II construction proposal, pointing to safety concerns and an “unrefined aesthetic.”
“Langdon is a very special street in this city and I think even though it is not a local [historic] district, people view it as a local district,” Commissioner Bradley Cantrell said at the time. “I don’t think this project is there yet … I’m struggling with the rhythm and the mass of this building that we’re looking at.”
But the idea of Hub II didn’t just go away. It resurfaced not two years later as “Oliv Madison,” a new student housing project from Core Spaces that is slated to offer 10% of its beds at a discounted rate. A discounted bed is expected to be rented at the average price of $740.
Core Spaces is surely making its mark on Madison’s downtown, but UW-Madison students aren’t its only target.
Core Spaces is one of the nation’s leading developers, owners and operators of luxury properties in educational markets. As a vertically integrated company, Core Spaces purchases land, develops plans, builds and then rents its spaces to students directly. By managing its own supply chain, which is also owned by the company, Core Spaces cuts out the middleman.
On Nov. 4, Core Spaces announced a partnership with Ares Management Corporation to acquire a portfolio of five apartment buildings valued together at over $400 million. The news serves as the “initial transaction” for the partnership, as the two entities will further seek to grow their respective student housing portfolios centering on college and university markets across the country.
“We’re excited to partner with Core Spaces and add these five newly constructed properties to Ares’ strong and growing U.S. multifamily portfolio, which today includes approximately 25,000 units across over 85 properties,” said David Roth, the head of U.S. real estate equity at Ares Real Estate Group. “This transaction highlights Ares’ ability to transact across the risk/return spectrum.”
Meaning, student housing is a rising market, and more and more investors are becoming interested in getting their own slice of the luxury dorm pie.
Their projects extend from coast to coast, with multiple cities finding themselves home to one or more Core Spaces properties. In September, the LLC secured construction financing for the development of its second property serving students at the University of Southern California — Hub on Campus II. Some of its other locations include Hub Lexington (catering to the University of Kentucky), Oliv Tucson (University of Arizona) and the Hub Tuscaloosa (University of Alabama).
We can’t afford the next generation of student housing, but that won’t stop it from being built coast to coast.
While student groups in Madison have been quick to raise the alarm on the LLC’s new developments, other cities have provided incentives to the company. The State College’s Borough Council, which is a town dominated by Pennsylvania State University, passed a resolution in October approving a performance bond for Core Spaces. The Daily Collegian reported that the project will utilize the borough’s Green Certified Incentive, which enables LEED-certified or equivalent buildings the ability to reduce required minimum parking at the development site.
A bond amount of $191,000 was passed unanimously by the council to benefit the construction of Hub State College.
Core Spaces’ current downtown project, Oliv Madison, has not been received positively by the State Street community, many of whom are concerned with potential changes to the street. Some have cited both the design of the apartment as well as the removal of several small businesses as concerns regarding the project.
District 4 Alder Michael Verveer shares many of these concerns. Verveer oversaw the planning of Hub Madison, a similar high-rise luxury apartment located near campus that was also built by Core Spaces.
Verveer explained in an interview with City news reporter Charlie Hildebrand that the end result of the Hub Madison was noticeably different from the proposed plan. Verveer went on to state that he feels that the Core Spaces development detracts from the State Street area.
“I was horrified at how the Hub ended up in terms of its design. It looked a hell of a lot better on paper than it ended up looking being built, especially the blank walls of the tower. Whenever I’m on Gilman or State, I get sick to my stomach. I feel like it’s my fault that we didn’t force them to have better quality materials or more windows, that sort of thing,” Verveer said.
But businesses have received the shorter end of the stick.
A Room of One’s Own, a bookstore previously located on West Gorham Street was one of several stores that were forced to relocate after their landlord sold their building to Core Spaces. A spokesman associated with A Room of One’s Own expressed their discontent with losing their State Street location to the Daily Cardinal.
“[We were] surprised, sad and scrambling to find a new place. We hoped to stay downtown but didn’t find any spaces that would work for us,” A Room of One’s Own said in an email. “We did not have any say in the process and would not have chosen to relocate.”
A Room of One’s Own believes that gentrification plays a role in the stores being sold to Core Spaces. A Room of One’s Own explained that the bookstore was “sad and frustrated that some long-standing local businesses in historic buildings were pushed out.”
So what’s in store for the future of State Street?
In the past decade, the city of Madison has grown substantially, having gained an additional 75,361 residents with much of that growth being centered in the downtown area.
Such changes have caused the local community to question what the historic area will look like as Madison continues to grow as a city — not just its campus area. City news reporter Francesca Pica reports that as State Street looks to its future, two proposals in particular look to transform much of Madison’s retail, dining and cultural center.
One of the two proposed changes potentially coming to state street is to develop the 400-600 blocks of the area into a pedestrian mall. Pedestrian malls are streets lined with storefronts that only allow foot traffic, closing off all access via automobiles, including buses.
The proposal aims to turn the streets into a large walkway inaccessible to cars for pedestrians and allow businesses to take up more space outside. Additionally, it would facilitate the planting of trees as well as create more space for public artwork. The pedestrian mall proposal would not complicate current plans to create bus routes on the upper part of State Street, as no routes are slated to be built along the 400 through 600 blocks.
In January, the Wisconsin State Journal editorial board advocated for removing vehicles from blocks 400 through 600 on State Street for this very purpose. According to the board, turning part of State Street into a pedestrian mall will have a profoundly positive impact on Madison’s local economy by encouraging individuals to shop at and dine on state street.
“Madison should multiply this successful effort by removing buses and cabs from State Street and letting pedestrians take over,” the board wrote. “Doing so will bring back business and jobs. It will excite shoppers, diners and attract more tourists and events.”
The second biggest factor to weigh is, of course, even more luxury housing. Developers will looking to construct housing units on State Street, with additional apartment complexes likely to be constructed along a part of the upper end of the street to address Madison’s housing shortage.
Oliv Madison would turn much of the 300 block of State Street into housing.
According to Core Spaces senior development manager Mark Goehausen, the redevelopment is expected to attract more students and young professionals to the area.
“Core continues to be a very big believer in the city of Madison and the market for student housing in town,” said Goehausen. “This site, being centrally located between the university and the Capitol building, should draw both student and young-professional residents.”
Tim Kamps, chair of the Mifflin District of Capitol Neighborhoods, voiced his support for the development of housing in the downtown area but also raised concerns about the large size of the project.
“The workforce and affordable units being proposed are a huge positive,” Kamps said. “But there will be concerns around displacement of businesses, especially those on Gorham Street, as well as the size and height.”
It’s a difficult choice, to approve a project and risk businesses or deny a development and lose precious living space. It’s not a decision that will be made easy, but housing must be built.