The first day of classes at many schools is only a week or two away, but the outcome of the 2009-2010 leasing season is still in question as many students put off their decision until the last minute, leaving some student housing owners and managers waiting until September to see if they will match last year’s performance.

"We believe the leasing season has extended this year with many students looking for deals and making their housing decisions later in the lease-up," says Miles Orth, Executive Vice President and Chief Operating Officer of Philadelphia-based Campus Apartments, a student housing provider with more than 21,000 beds in 17 states.

"Overall, we're slightly behind last year's numbers in certain markets, as is our competition,” Orth says. “However, our recent leasing velocity suggests we'll achieve lease-up goals, albeit later than last year." National numbers don’t tell the whole story, he adds. In markets with schools that have steady enrollment, such as the University of Pennsylvania in Philadelphia, “We’re still seeing growth in rents and still achieving lease-up, although it’s happening later” in the fall cycle.

In markets such as Orlando, Tucson and Tampa, on the other hand, students are looking for concessions late in the year, Orth says. Leasing agents who wait until the end of the year to offer incentives, instead of offering a tiered structure that provides incentives earlier in the year, are training students to hold out until the end for leasing specials, he adds.

Many student housing providers aren’t sharing leasing figure for 2009-2010 yet, says Kevin Larimer, Director of Student Housing for apartment sales and research firm Hendricks and Partners, but his assessment is similar to Orth’s.

“A number of [owners and managers] over the last six weeks were hoping there would be a push toward the end,” he says. “If I had to guess, my guess is we’re going to be off a bit on occupancy.”

In June, UNITS reported that the 2009-2010 leasing season would be a proving time for the industry. Historically, student enrollment at universities has increased during recessions as young workers decide to enroll when jobs become scarce. But state budget constraints have caused some schools to reduce enrollment, and tight credit markets have made it more difficult to obtain student loans. If the student housing industry can thrive this year, it will solidify its recession-resistant reputation.

Larimer also says results probably will vary by market. The University of Florida’s Gainesville market could be a concern, for instance, because the school indicated last year that it would reduce enrollment for the 2009-2010 school year. A number of new projects there were counting on continued increases in enrollment.

“But all things considered, student housing’s still a very viable niche,” Larimer says. “It won’t be nearly as hard-hit as other product types.”

While anecdotal and survey evidence from university associations suggests enrollment at many four-year schools is flat, community college enrollment is surging, primarily driven by the economy, according to David Baime, Vice President of Government Affairs for the American Association of Community Colleges. Unfortunately for student housing providers, Baime agrees that many of these students will not be renting off-campus apartments. “Many of our students are at home one way or another,” he says.

We’ll provide a longer update once more information is available. In the meantime, would any NAA members care to share how their leasing is going for this fall?

Jeffrey Lee - Staff Writer, National Apartment Association