Rents are continuing to increase for student housing across country, responding to a distinct post-pandemic demand for more student residential space, according to several new reports.
Notes the site Real Page: rents for student housing space saw a 9% increase in May of this year over May of 2022. That strong market improvement is in contrast to an overall multifamily rent increase during the same time period of only 2.3%.
“Housing geared to college students at popular schools is a rare bright spot in the beleaguered commercial real estate business,” notes the Wall Street Journal.
The demand is all the more impressive just three years after the Covid 19 outbreak devastated the student housing market with millions of students returning to their parents’ homes, emptying out college dorms.
Demand, in fact, was well underway last year, notes the commercial real estate services firm CRBE, which says investors purchasing student housing properties accounted for a record $22.9 billion in sales as of the end of 2022.
That $22.9 billion figure is more than double what it was the year before.
The numbers reflect a return to a market that was thriving before Covid 19 when investors were scooping up student housing properties everywhere, especially high-end complexes with swimming pools, fitness rooms, and ground floor retail.
Prospects for continued student housing construction and investor purchases look all the more promising due to a projected increase in the nation’s undergraduate student population. According to the National Center for Education Statistics that population is expected to reach 16.6 million by 2026—up from 15.4 million in 2021.
In May, Riverside Development of Chattanooga purchased the Edge apartment complex across the street from the main campus of the University of Tennessee for $6.6 million. Just weeks ago, the Everly on the Loop student housing complex near Washington University in St. Louis was purchased for nearly $50 million.
The market, according to analysts, is additionally expected to remain strong for the foreseeable future largely because interest rates have limited student housing construction activity, making existing properties more in demand than ever.
By Garry Boulard
