Student Operators Meet Changing Demographics
Digested from GlobeSt.com
While today’s new deliveries only hit the top end of the market, communities built in the last real estate cycle can meet the needs of a growing student demographic.
Pierce Education Properties’ CEO and President Fred Pierce says this current crop of college students boasts more first-generation collegians than any time in history. Many of those students come from families with modest incomes.
That creates challenges for student operators, Peirce tells GlobeSt.com’s Carrie Rossenfeld. While new projects cater to students of higher income, the projects of just a decade ago can meet the needs of this rental cohort.
“… the class-A inventory that was largely delivered in the decade of the 2000s and is very highly amenitized has been repositioned to accommodate the larger cohort of middle-income students, with rents often at 50 percent to 65 percent of the levels charged for new projects,” Pierce tells Rossenfeld.
As on-campus housing grows more functionally and physically obsolete, Pierce sees opportunities for private student housing companies to thrive.
“Once students have the opportunity to live in state-of-the-art housing on-campus as freshman, it serves to increase their desire for high-quality housing when they move off campus,” Pierce tells Rossenfeld. “This trend is expected to increase in coming years because a higher percentage of on-campus housing comprises recently completed projects.”
As this opportunity increases for student housing companies, Pierce predicts that the industry will see more consolidation.