With the national boom in new student housing construction showing no immediate signs of slowing down, developers and owners may want to keep one market factor in mind: the closer the apartments are to a campus, the more likely are they to be rented.
That, according to a new report released by the Richardson, Texas-based Real Page property management services company, is a trend that has been seen in the spring 2018 semester, but was replicated in the semester just concluded in May.
According to the Real Page report: properties “less than a half-mile from campus saw more than twice the rent growth” of properties located a mile away or more.
Says the report: “Stronger rent growth nearest campus also corresponds to more pre-lease velocity. Within a half-mile of campus, the national pre-lease rate through May is 78.2 percent.”
Properties father away saw a lower 72.8 percent leasing rate.
The report additionally notes, in response to ongoing student demands, “The average distance from campus has been shrinking consistently since 2011 as developers see the writing on the wall that these assets outperform their farther-from-campus counterparts.”
The latest leasing rate numbers come on the heels of a report issued by Savills, a London real estate services company, indicating that overall investment in student housing construction projects in the U.S. surpassed the $10.8 billion mark in 2018.
That number has been on a steady track upward since 2014 when it stood at around $3.8 billion.
By Garry Boulard
