The Knox

Location: Knoxville, Tennessee

University: University of Tennessee

The Challenge

Campus Advantage and Pinecrest partnered to develop a brand-new student housing property called The Knox, to serve students attending the University of Tennessee in Knoxville. However, prior to opening, the development required due diligence efforts to select the right building location and design, establish stand-out branding and marketing deliverables, and achieve strong occupancy and rental rates.

The Solution

As the result of an advanced ranking analysis of 240 university markets, Campus Advantage identified the University of Tennessee as a market ripe for new housing. After identifying the market, Campus Advantage evaluated three different sites and chose the one with an irreplaceable location in Knoxville, located 100 feet from the university.

The development sits in a transitional zone with historical significance on one side of Clinch Avenue (consisting of low-density, early 19th century housing), and the other side of the block unfettered zoning-wise — all facing a 12-story University of Tennessee residence hall.

Entitling the site within the Fort Sanders Historic District required a great deal of flexibility. Campus Advantage worked closely with the local historic Fort Sanders neighborhood group, Kelly Grossman Architects, and Kelle Contine Interior Design to ensure the design integrated well with the surroundings. The project incorporates a high-density, modern mid-rise on the side of the site facing the university with a more traditional, lower-density, three-story walk-up with faux porches.

Amenities included a 12,200-square-foot outdoor green roof deck that boasts multiple hot tubs, televisions, cabanas, grills, and an outdoor fireplace, as well as a coffee lounge, game centers, study rooms, a clubhouse, and a state-of-the-art fitness center.

Campus Advantage enlisted the help of Catalyst, their marketing partner, to select a name for the new development and establish branding. Catalyst team members performed a site visit, including a tour of the University of Tennessee, Knoxville, where they had a chance to speak with both incoming and existing students to capture sentiment toward off-campus living and research the school’s traditions. Catalyst also toured some competitors in the market, which contributed to a greater understanding of what was needed to set the new development apart.

Drawing on knowledge of the competition in the market and the demographic of students looking for off-campus housing, Catalyst presented a variety of names, and The Knox was chosen. Catalyst also created a temporary site to count down the days until the development opened and worked closely with outside vendors to provide top-of-the-line 3D renderings of the property, as well as virtual tours. Creative for The Knox branding included naming, a tagline, a logo, interior design collaboration, a mood board, a brand guide, a paper system, a marketing brochure, a temporary website, a full website, a sales sheet, social media collateral, multiple ad placements, email campaigns, and a branded map of Knoxville. In addition, Catalyst also helped brand The Knox’s leasing space with window and wall clings to entice prospects. Key messaging for branded deliverables encouraged students to be the first in calling The Knox home and provided contact info on a website VIP form to help collect leads.

The Results

The asset was completed in August 2016 and opened that fall with a 95% pre-lease rate and pre-leasing revenue at 101% of projections. The exclusive amenities package available in the market only at The Knox generated increased attention and ultimately helped in securing leases. To achieve strong occupancy and rental rates compared to other similar projects in the market, the project ensured on-time delivery in its initial lease-up.

The Knox achieved a 26.2% leveraged internal rate of return (IRR) and a 2.1x multiple on invested capital (MOIC).

• Role: Developer, Manager, Marketer
• Location: Knoxville, TN (University of Tennessee)
• Entitlement and Design Timeline: June 2013–February 2014
• Groundbreaking: November 2014
• Delivery: May 2016
• Strategy: Merchant Build
• Hard Construction Cost: $20.3 million
• Total Development Cost: $29.1 million
• Loan-to-Cost: 70% (hypothetical)
• 7.43% Yield on Cost (pro forma)

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