Assessing College Town Demographics: It’s An Art

By Matthew Stein

Demographics are typically considered a science, right? Not always the case! MSC University (MSC U) is here to explain how analyzing data in relation to college campuses is actually much more of an art than science.

Many actively expanding national retailers are beginning to incorporate college campus locations into their expansion plans. With trendy Millennials filling the scene and constant visitation for sporting events, conferences and more, what’s not to love? During the site assessment process, some components are certainly black and white: frontage, visibility, signage potential and co-tenancy, among others. However, a huge challenge with demographic data in and around college campuses is accurately quantifying the student population, both undergraduate and graduate, due to misleading sources.

The primary source for this type of information is government census data. Official stats from the government are the be-all and end-all, right? Not quite; we see a reason for pause. The government more often than not qualifies college students as “transients” unless they fall into a specific category: they totally support themselves; they own a home; or they pay a notable amount of taxes. Needless to say, it can be quite challenging to put most college students into one of these categories.

Acknowledging the issue is the American Community Survey, recently commissioned by the U.S Census Bureau’s Social, Economic & Housing Statistics Division. This three-year study looks into how inaccurate reports of students and permanent residents can affect the businesses looking to enter an area. The report shows that campuses are often misrepresented, specifically in small towns where a college campus is the main attraction. Note: A large student population in an urban environment, like NYU, has a much less significant impact on the city’s demographic, as the city is already super dense. Less-dense populations from traditional, land-grant institutions (think Athens, GA or State College, PA), see a much larger impact from colleges & universities, as the higher influx of students are not permanent residents.

It’s also crucial to note that colleges and universities don’t release demographic data; while they release total number of undergraduate vs. graduate students, gender counts, amount of financial aid given, and beyond, institutions typically don’t share average net household income for the incoming freshman class. As such, retailers are unable to properly underwrite the buying power and available disposable income for the undergraduate and graduate student population.

We already established that students are not always accounted for in government data, but what happens when they are? Often, these earnings can further skew results, as students who work part-time with wages close to the federal minimum actually drive the poverty rate lower. Thus, whether students are included in census data or not, results can be difficult to decipher.

Another challenge to note is identifying the upside to having a captive audience while college is in session; think about the influx of visitors with sporting event weekends, visitation days, festivals, and the like. Retailers don’t always have the correct information needed to include this variation in the typical, check-the-box approach.

Without a sophisticated real estate team who understands the nuances of working in and around a college market, retailers can miss out (or misread) amazing opportunities. We at MSC U marry the science of corporate box-checking brokerage with the art of nuanced underwriting. The science numbers may indicate that a shop on or around campus will be a wild success or a terrible failure; but the art often proves a totally different outcome.

If college students were excluded from the universe of demographics, poverty rates would technically improve in this country. However, in a great number of markets, student buying power actually does improve the environment. It’s vital to remember that every market varies wildly and every corner needs to be underwritten differently.