Investors in new student housing projects may find inspiration in the fact that rents in this sector remain more vibrant than ever, according to a new industry report.
Nearly 90% of beds for the coming fall 2023 semester have already been leased, according to the Scottsdale-based industry tracker Yardi Matrix, a 5% increase over where things stood in May, and slight increase over last year at this same time.
Surveying some 200 universities, the report also notes that the average rent per bed heading into this fall is $846, which Yardi Matrix describes as a “new all-time record.”
Despite this general rising slope, the student housing market remains a tale of many campuses: “Some universities are doing exceptionally well, while others fall short,” says the narrative accompanying the report.
“Performance at the university level is mainly correlated to local supply-and-demand dynamics rather than higher-level trends,” the report continues.
Student housing has comprised a mostly volatile market since the Covid-19 outbreak in the spring of 2020. Then, hundreds of campuses, and student residential units, were suddenly abandoned as students returned home to live with their families.
The fall 2021 semester saw a marginal return to normal campus housing dynamics, with last fall at last bringing things back to where they were before the pandemic invasion.
The latest student housing growth comes during a time of increasing rents everywhere and general inflation. Perhaps for those reasons, overall transaction volume though the spring of this year has declined by around 73% over the spring of 2020, notes Yardi Matrix.
Even so, off-campus student housing projects in the pipeline stage have expanded by a remarkable 28,000 rooms since January of this year.
These dynamics are playing out against a backdrop of increasing national four-year enrollment. According to the National Center for Education Statistics, total undergraduate enrollment is slated to increase to 16.8 million by the year 2031, up from 15.4 in the fall of 2021.
By Garry Boulard
