The Truth about Student Housing in Ann Arbor

When residents and visitors comment on the changing face of Ann Arbor they’re most commonly referring to the proliferation of high-rise student housing projects that have popped up along South University, Huron and Washington over the past decade or so. Too often these projects are misunderstood. In addition to my running commentary on the development of these buildings here in Ann Arbor, I work in the student housing business on a day-to-day basis (brokerage across the country) so I wanted to shed a little light on how they work, the supply-demand dynamic at the University of Michigan, and why they’re a necessary evil here in town.


Zaragon Place, with 248 beds, was one of the first high-rise student projects in recent years, opening in the fall of 2010.

First, it’s important to note these are private housing projects, built by developers and marketed towards upperclassmen students. The university maintains its own housing system, the bulk of which is meant for first year students, and it has also built new housing in recent years including North Quad and the Munger Graduate Residences. The private off campus buildings lease by-the-bedroom typically with parentally guaranteed annual leases and often in larger 4, 5 and even 6 bedroom configurations. The developers have been almost exclusively out-of-town companies and thus far all but Zaragon have sold their projects soon after completion. The characterization of these developers as being profit-motivated and not long-term stakeholders in our community is unfortunately largely accurate.

Second, love it or hate it, these buildings are filling a huge housing need. The first vertical student housing development in recent times was Corner House at State and Washington, which opened in 2003 with just 154 beds. Since that time the university has grown by 8,135 students. Between the university residence halls (1,080 beds) and all of the private development (3,730 beds), there has been approximately 4,810 beds added to the current stock in that time. Not even close to keeping pace. The flurry of new development looks to add an additional 1,241 beds in 2018 and a total of 2,384 over the next 4 years, still not keeping up with anticipated demand. We could argue all day about whether the university needs to or should grow but it has. If there are not new buildings to house students on or off campus, it presents an entirely different set of problems.

Lastly, if it’s clear that the students have to live somewhere, they can live near campus in mid to high rises, we can re-zone some areas a little further from campus for mid-rise development, or they can live way further out and commute in from garden style apartment complexes. To date, the vast majority of new projects have been vertical in D1 zoning areas within a couple blocks of campus. The exceptions would be The Courtyards on North Campus and the new project on Main Street, The Yard. A new development, The Cottages at Barton Green up on Pontiac Trail, would be the first commuter style complex in Ann Arbor although most universities have a plethora of this type of housing. I am generally opposed to this type of student project here in Ann Arbor, it encourages car ownership and places a concentration of students in residential neighborhood. However, it would provide additional much-needed new construction housing at a more affordable price point than downtown.


Six11 will bring 343 beds to East University in the fall of 2018.

For those that question the need and demand for housing, feel free to peruse my company’s research report on the market:


The quick stats: university enrollment is 46,002, a new record, and the freshmen class of 6,847 is the largest in school history. Average occupancy across the market is north of 99%, the highest rate we have ever surveyed at a university. Rents increased over 3.5% year over year although demand for 4 bedroom unit types seems to be waning. All those new buildings?  They’re all full. The worst occupancy was 96%. It’s pretty evident that the student housing market at the University of Michigan is extremely healthy.

What does that mean for the future? The university is likely to pump the brakes on growth in coming years, they’re essentially at capacity to house incoming students on campus. There seems to be a good chance that the university will explore building a new residence hall in coming years, the rumor is a larger replacement for aging Mary Markley Hall. Private development is likely to continue as well, mostly in the South University corridor but I’m hearing whispers of a new project on Washington as well. Students have to live somewhere, I believe the focus should continue to be on a dense projects near campus that dissuade car ownership with a renewed emphasis on quality building materials and design, and attractive, pedestrian-oriented ground floor retail and streetscaping.


Coming Soon: New Openings Planned Downtown

Downtown Ann Arbor is constantly in a state of flux, businesses opening and closing, rents going up, owners retiring, young entrepreneurs trying to break in.  It’s sad to see old standbys close but also exciting to see new concepts try to make a go of it.  I’m always curious as to what’s going on when I see a storefront papered over, contractors laboring mysteriously behind the scenes, hopefully bringing something exciting to the block.  As a (very lax and part time) blogger of the haps downtown I try to ask around and dig through city documents to see what’s going on.  I thought I would share a few upcoming openings, some more exciting than others.

“Bar Star” – 220 S Main St


The former home of Elmo’s T-Shirt Shop (now operating just down the street on Liberty) will be converted into a high end cocktail bar with the working title of Bar Star per construction documents.  This swanky spot comes from the owners of Melange and is being designed by local shop Synecdoche Design.  The interior appears to have a very modern theme with an open concept and chef’s table.  Critics may label as it as just another emblem of gentrification but it’s a substantial investment in the space and I look forward to checking it out.

 “TBD Sports Bar” – 309 S Main St


This one I’ve been waiting on expectantly for some time, The Melting Pot closed here in November of 2015 and I hoped for a fairly quick turnaround as the space is relatively turnkey for a restaurant/bar.  After a misfire or two (I heard the owner of Tavern & Tap in Lansing had the space under contract at one point) there’s now a yet unnamed sports bar in the works.  I don’t have a whole lot to go on here, mostly looking at a building permit, but it appears that the proprietor is the owner of Shalimar next door.  The space will be opened up a bit, occupy all floors of the building and feature a rear patio on the second floor, much like Jolly Pumpkin next door.

Kosmo – 308 S Ashley St

The second outpost of local Korean spot Kosmo will open in the former Lucky Monkey Tattoo parlor.  Personally thrilled for this as it’s about 100 feet from my office, look forward to exceptional bibimbap.  This one was already covered by the Ann Arbor News here.

Fred’s – 403 E Washington St


Another one recently covered by the News but the old Babo location at the corner of Washington and Division is being re-positioned as Fred’s.  This comes from Fred Lelcaj, brother of Babo owner Sava Lelcaj who recently ran a much smaller version of Fred’s on South U.  I never got to try the old spot so excited to check it out downtown, should be open by the time you read this.  (Side note, perhaps the closing of Babo will free up Sava to launch another concept downtown?  Here’s hoping.)

Roasting Plant – 312 S State St


Testing the depths of Ann Arbor’s seemingly insatiable demand for coffee shops, NYC-based Roasting Plant will open their second Michigan location at State and North University (RP has a very popular spot in the First National Building on Campus Martius in downtown Detroit).  I believe this space was most recently the northern portion of Amer’s Deli, they’ve consolidated (along with Chicago Reds and Yogurt Rush, you can really cover all your bases here) into the southern half of the building.  Roasting Plant’s shtick is a custom pneumatic roasting system called Javabot.  I’ve been to the Detroit location, it looks cool and makes a good cup of joe but the competition in that nook of A2 will be stiff, Comet and lab are right nearby for high end stimulation, Espresso Royale, Sweetwaters, Elixir Vitae and of course Starbucks offer a more traditional coffee experience.

Core Spaces Leasing Office – 306 S State St

Pretty boring but in case you were wondering what’s going on in the old Work Gallery Space on State Street, it’s a leasing office for Core Spaces, developer of The Calvin on Huron and conceivably The Collective on Fifth, the building planned for the library lot.  Positive here is that they will renovate the space and only be there a short time, hopefully setting it up nicely for a new tenant (note: I understand the building permit has been temporarily denied as they work on some accessibility issues).  In better news, the gallery has moved to larger space in McKinley Town Center on Division Street

Exscape Smoke Shop & Vape Lounge – 607 E William St

I don’t vape so this opening excites me about as much as a leasing office but for those who do, you’ll have a new option in the former Menna’s Joint space on William just west of State Street.  Exscape has eight locations, primarily in college towns, including one in East Lansing.

Collegian Leasing Office – 1112 S University Ave

The venerable Village Apothecary shut down seemingly overnight back in 2015 and the building (along with many of the others on South U) is probably not long for this world.  There are plans in the works for a redevelopment of much this stretch by developer Hughes Properties, there are two student towers in the planning stages right now.  I understand that most, if not all, of this block will eventually be torn down but for now Hughes is going to use the space as a leasing office for Collegian North and Collegian East.  Not looking to rent a student apartment?  It appears there will also be an ATM, so you know, there’s that.

Smoke’s Poutinerie – 1300 S University Ave


This is the corner space in the newish Landmark Building at the corner of South U and Forest once home to World of Beer and briefly another bar called Dick Tyler’s Tavern.  The Toronto-based purveyor of gravy fries is growing rapidly with locations planned for Detroit, Ann Arbor and East Lansing.  Honestly this sounds like a great spot for them, this is classic, relatively inexpensive drunk food.  The menu looks absurd, ah to be 22 again.

Odds & Ends

Another business in the Landmark building, Tim Horton’s closed down in late 2016 to make way for MVMNT, an indoor cycling studio which had their grand opening on January 20th.

No word on the former Kai Garden at 116 S Main St although they did recently complete an interior demo and clean out of the building.

Siris, the BBQ and cigar lounge on North Main is still in its seemingly perpetual “coming soon” mode.

Eve in the Bell Tower Hotel closed back in September 2016 after a flood in the restaurant.  Unfortunately it appears the damage was extensive and the closure is permanent.  Eve is looking for a new location and no news regarding the future of the Bell Tower space.

Not sure what’s going on at the old Carter’s Auto Service on Ashley that was once planned as a brewpub.  The building has been cleaned up and painted so certainly some improvement there.

I’m sure I missed a bunch of future openings, hit me with a comment or or social media if you have word on any fun new business developments.  Also, follow me on Twitter for updates like this in real time.

New Retail Project Coming to South U?

There are some major changes afoot on South University.  It’s been long rumored that Ron Hughes of Bingham Farms-based Hughes Properties is working with the Ulrich family to redevelop their significant holdings in the area.  Hughes is responsible for some pretty serious commercial projects in town including the former Borders redevelopment on Liberty and the ground floor retail component of the Landmark high rise at South University and South Forest.  The DDA is also in the planning stages of some much needed street and sidewalk improvements for the area including removal of the massive round planters, crossing improvements to the South Forest-South U intersection and increased space for outdoor seating.


Adding to this change could be a smaller commercial building filling the only structure-less void on this stretch.  Back in 2009, arsonists burned down the former Pinball Pete’s, at the time vacant and boarded up as Pete’s had moved across the street some years before.  The Tice family, owners of the Pizza House restaurant, had owned the property for many years.  It appears they had explored several options for the site, including experimenting with a food truck court in 2013, but had never committed to a long term redevelopment plan.


In December of 2015, they sold the property to Boston-based Suburban Campus Properties, owners of the adjacent University Towers (SCP also owns the commercial component of the Michigan Theater Building), for $1,050,000.  This makes sense simply as a buffer against future high rise development next to the Towers but SCP does not appear to be sitting on their hands, they recently listed a potential new retail/office development for lease.


The listing shows they’re planning a two story building with up to 12,000 square feet of space available on both floors.  It’s important to note that this is just a conceptual plan, the design and size of the building will be dictated by the tenant or tenants they attract to the space, however it gives you an idea of what the owners are anticipating.  They’re asking $45 per square foot, a hefty price tag and one that can likely only be taken on by a national retailer looking to plant a flag here in Ann Arbor.  New construction with high ceilings and modern amenities in the heart of the campus area is a rare find and I would expect there to be considerable interest from the market.  For reference, the Landmark retail space was asking $45 per square foot as well, 7-11 pays nearly that for 2,500 square feet.  Walgreens pays just over $40 per square foot for nearly 18,000 square feet of older but completely renovated space with high ceilings at State and North U.

Like most locals, I hate seeing the proliferation of national chains in the downtown area although I do understand that a mix of local, regional and national businesses is healthy.  This building would replace a vacant gravel lot in an in-fill location and that is certainly a good thing.  Normally I would say there is plenty of older, cheaper space on South U for local businesses to establish themselves but I don’t know what the future will bring to this stretch, some of those buildings may face the wrecking ball.  Here’s hoping they find a quality tenant that fits in well with the overall character of the area and build a high caliber design.  I know the family behind SCP just enough to know they care about more than just the bottom line and I believe they will be selective and measured in their decisions going forward on this project.


My first thought when I saw this project was the possibility of a Nike Store to go along with the new Nike apparel contract at UM.  I just read a story about Under Armour opening a 15,000 square foot flagship store in Madison, WI following up on their recent contract with UW.  Would the townies want that?  Definitely not.  Would your average 19 year old be thrilled?  Probably.

For the record, I think South U needs some redevelopment.  There are a number of buildings that would break my heart to lose but there’s some brutally designed, poorly maintained 1950’s-1980’s structures that are in need of a major reboot or potential replacement.  I’m a huge proponent of character but significant swathes of South U are tired bordering on moribund right now.

When poking around for this story, I noticed that 1121 S University, the building at the NW corner of South U and Church with TCF Bank on the ground floor, sold last year to University of Michigan Credit Union.  UM ended their partnership with TCF last year in favor of PNC.  I would not be surprised to see TCF exit this location whenever their lease is up and see a new UM Credit Union branch replace it.  Hard to argue that would be anything but positive, the building needs some work and you’re replacing an out of state bank with a local one.  Hope I’m right.