Despite Giveaways, Student Housing Remains Stable
Digested from RealPage
Despite oversupply concerns in some markets, the sector’s performance has remained strong.
During the past few years, developers have added, on average, between 44,000 and 48,000 student housing beds. Another 46,200 beds currently are under construction, according to RealPage.
So far, the market seems to be absorbing this supply.
“The impact of supply varies by university, but the overall performance remains stable,” Taylor Gunn writes for RealPage. “Leasing velocity has been ahead every month this leasing season except for January, though it only fell by a slight 35 basis points. By February, leasing velocity picked back up. Prelease averaged 50.2 percent, up 45 basis points from last February.”
Student housing operators have had to offer giveaways to keep heads in beds.
“The number of giveaways being offered is increasing relative to last year, and has almost every month this leasing season,” Gunn writes. “In February, a little over 20 percent of same-store properties were offering giveaways for new leases, which is above last year. However, while more giveaways are helping to drive faster prelease in some cases, there are a mix of properties with increasing and decreasing leasing velocity offering giveaways.”