Despite Demand, King's Summer Housing Finds Avoiding Vacancies a Tall Order

The view of New York Harbor from King's One West housing location.

When students leave campus this May, The King’s College aims to rent its vacant apartments. According to King’s IRS 990 forms, doing so can bring somewhere between $770,000 to $1.5 million in annual revenue.

Some years, that task proves more difficult than one would think in New York, a city that sees rent prices climbing steadily upward and where students flood in for summer internships. Since the NYC Intern program debuted in 2006, average studio and one-bedroom sale prices in Manhattan have increased to $738,347 and $1,202,763 from $504,465 and $716,779, respectively, according to a data set from New York real estate firm Brown Harris Stevens.

The summer of 2016 proved to be one of those difficult years. Sources indicate King’s scrambled to rent out apartments last summer, ultimately leaving dozens vacant and missing out on roughly $200,000 in revenue.

Frank Torino, VP of Finance at King’s, acknowledged the loss on vacant apartments last summer.

“Last year was a down year,” Torino said during an interview in his corner office on the sixth floor that looks out on Broadway and Exchange place. “The program NYC Intern is critical – not do or die – but it’s critical [to school finances and housing costs]."

Torino said King’s is working hard to improve occupancy and revenue from the NYC Intern program this coming summer. The school promoted former student worker Jacob Wilson, whom Torino said helped salvage NYC Intern last summer, to be a full-time employee managing the program, renting out the 314 beds that King’s has on the market this coming summer. Wilson now reports to Vice President Kimberly Thornbury.

“The team has implemented a customer management software, and use phone calls, emails, Google ads and other techniques to find summer renters,” Torino added.

The team will be creating weekly reports to track deposits and real estate market conditions more closely. That allows them greater flexibility to adjust pricing and step up marketing as needed to drive occupancy.

“Last year, there were hiccups,” Torino said. “Those ads didn’t get run as often or as long as they should have been run.”

Because of the fine-tuned efforts made since, Torino believes the school will not be surprised again.

The NYC Intern program started in the academic year 2005-2006 and has proven to be a revenue generator at times for the school. Previous employees of King’s told the Tribune that NYC Intern kept King’s housing at or near full occupancy during the summers of 2013, 2014, 2015.

Multiple King’s employees including Torino and Nick Swedick, Director of Student Life, noted that keeping a few apartments open is more ideal than perfectly full occupancy. Sometimes roommate dynamics or special circumstances call for movements during the summer and require a few openings.

Determining how many apartments need to be filled happens throughout the year, but ramps up in the spring. Some apartments are intentionally not filled until late in the spring semester to keep space open for current King’s students, should they wish to stay in student housing over the summer. Filling the remaining portions, then deciding when to take the reserved apartments to the market is a “game of projections,” according to Swedick.

King’s rents its student apartments to interns for the summer for roughly $1,700 per month per person. For example, the NYCIntern.org site advertises a West Street triple studio for $3,400 per person for May 20 to July 29.

Colton Knoepfle ('15), worked 20 hours per week during the school year for the NYC Intern program as a student worker. He also worked full-time on NYC Intern during the following summer. He said the job involves time on the phone consulting prospective interns and renters from outside the city.

“The biggest hurdle we faced was managing people’s expectations about life in New York City,” Knoepfle said, during a phone interview. “A lot of them were not from New York City and they don’t know what to expect about life in New York City. A lot of people think they move to NYC and have an apartment like they see in “Friends” – wide open spaces. It is different from what they expected.”

Knoepfle, Torino and others said rental market dynamics changed as King’s moved its apartments from midtown to downtown during 2015 and 2016. They say many visitors to New York prefer to be in midtown. And overbuilding of apartments in lower Manhattan also affects pricing and demand.

Torino notes that King’s landlords do not want heavy turnover in buildings, meaning the school aims to rent the apartments for two-month terms rather than by the week. Buildings also require background checks for all occupants, which King’s must enforce. Finally, King’s must pay for thorough cleanings in between each occupant.

Duanne Moeller, a former chief administrative officer of King’s, managed the NYC Intern program for many years. Torino said that Moeller had many connections to ministries that rented apartments. He also had a good sense of real estate in New York City and how to market the NYC Intern program. When Moeller moved on from King’s in 2015, by definition, the school lost some of his institutional knowledge.

Torino said the school passed on a roughly 5 percent increase in housing costs to its students during the 2015-2016 to 2016-2017 school year, which was in line with what landlords passed on to tenants. King’s plans to increase housing costs 2 percent this coming school year, 2017-2018. A report released in January 2017 from real estate firm Douglas Elliman showed that average rent prices for studio and one-bedroom apartments in Manhattan actually stayed flat since 2016.

King’s leaders are actively looking to buy or build real estate in New York City for housing and/or academic space. President Greg Thornbury and other school leaders have said that move would allow the school to fundraise less for operations and move for growth. Torino said even if such a building plan materialized today, moving into such a building would take 3-4 years. Until then, he said the school aims to at least cover its housing costs.

King's tries "to break even" with housing, Torino noted. 

“If it wasn’t for NYC Intern, we would lose money on housing ... It’s sort of like living and having to fight another day. The more we make on NYC Intern, the less we have to fundraise," Torino added. 

Associate Professor of Journalism Paul Glader contributed to this report.