Emerging Markets Offer Alternative to Tier 1 Universities
Developers and operators are seeing success in several new markets, offering an alternative to the Tier I state universities where many REITs focus.
The new emerging markets include new geographic areas as well as the markets surrounding smaller universities without purpose-built student housing. .
New Geographic Markets
While supply has historically been targeted at schools in the southern states, such as Florida, Texas and Georgia, new deliveries to those markets are slowing in this development cycle.
A new supply is spreading in other markets, such as the Midwest and Northeast and Pacific Northwest, where supply is not as saturated.
Axiometrics’ Taylor Gunn, Student Housing Analyst, said that when looking at emerging markets, the bed-to-enrollment ratio is used to determine what percentage of students are captured by existing stock and then looking at where new supply has been targeted over the last few years.
Markets Near Smaller Universities
Some companies are trying to create demand in places where almost no purpose-built student housing exists.
Thomas Galuski, President and CEO of GG Land Group, said these markets are about educating schools to the need, reports Axiometrics.
With smaller campuses, come smaller projects, said Rob Martinson, Vice President of Development for Annex Student Living. Annex Student Living develops, owns and manages properties at branches of state universities in Indiana and Ohio. Many of these projects range from 100 to 300 beds, reports Axiometrics.