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Student Housing Is an Investment Winner

Student Housing

High-quality units provide stability and profit in an occasionally volatile market.

The economic terrain for real estate has been bumpy in recent years, to say the least. But one solid performer for this sector through the downturn has been student housing. And a new deal is showing yet again that student housing units can be strong portfolio assets.

In March, Freddie Mac sold $734.5 million in commercial mortgage-backed securities backed by 8,800 student housing units owned by Kayne Anderson Real Estate Advisors LP, the Wall Street Journal reported. The limited partnership has been investing in student housing since 2007, and this deal accounts for 13 properties spanning campuses attached to institutions including the University of Alabama, Indiana University and the University of Oregon. 

The loan comes with a 10-year term and floating interest rate. The prepayment flexibility reflects that student housing is becoming an increasingly reliable and attractive portfolio asset.