Student Housing Market Continues to Heat Up
Digested from Student Housing Research: Market Gains Strength
Axiometrics (4/15/16) Gunn, Taylor
Spring ushered in positive signs for the national student housing market. The market performed well in March. The annual effective rent growth is averaging more than 2 percent, in large part because of increased leasing velocity. Since the start of the leasing season, the leasing velocity momentum has improved every month.
According to Axiometrics, privately owned, purpose-built properties were 60.1 percent leased as of March, which is 462 basis points ahead of the 55.5 percent reported a year ago.
There are 45,000 new off-campus student-housing beds to be delivered this fall, compared with nearly 48,000 beds in fall 2015. Much of the strong performance across the sector can be credited to the moderating level of supply.
The student housing market continues to heat up as indicated by the growing number of real estate investors who are using such investments in off-campus housing as a way to diversify their portfolios. Two Chicago firms Harrison Street Real Estate Capital and Scion Group have shot to the top of the market, through two acquisitions of more than $1 billion.