The Berkadia-RealPage October newsletter examined the annual Student Housing Trends report for Fall 2019. The report is full of informative, data-driven insights that will help multifamily experts to accurately gauge future opportunities in this uniquely dynamic subsector.
The report emphasizes that, more so than ever before, success in the student housing sector will depend on market-specific knowledge rather than relying on conclusions drawn from the national average. We’ve outlined a few of the biggest takeaways below. The report can be read in its entirety via the Research and Resources section of our website.
Student Housing Rent and Supply Rising
Since 2011, developers have brought anywhere from 40,000 to 60,000 new student housing units online each year. This trend continued in the last year through fall 2019. Over this period, 43,900 new beds were delivered nationwide.
The addition of new supply contributed to rent growth across the student housing sector. Rents increased 1.7% in fall 2019, up 10 basis points from one year prior.
Results Varied Between Schools and National Averages
A key takeaway from the Berkadia-RealPage October newsletter was how common it was for individual markets to skew wildly from the national average. The report identified a few examples of how varied student housing development has been since fall 2018.
- Bowling Green State University – Persistent demand and a lack of new supply has emerged as major trends in the local student housing market, encouraging apartment operators to keep rents growing rapidly.
- Virginia Tech – Enrollment is up at Virginia Tech as is employment in the surrounding metro. The resulting demand for housing, as well as talented tech employees, has encouraged more construction and helped to keep rents growing at a strong rate.
- University of Akron – For markets where enrollment is flat or shrinking, such as the University of Akron, student housing operators have had less flexibility when it comes to increasing rents.
Expect further reliance on state-of-the-art, big data tools to help investors accurately gauge where the strongest demand for student housing will emerge over the next decade.
No Construction Slowdown Expected in 2020
While some universities have experienced rent decreases prices over the past year, over a third of the 175 universities reviewed by RealPage in the report saw rent increase annually 3.0%.
Another 44,000 student housing units are expected to come online in 2020. This is in line with the past few years of construction. Developers are eager to leverage positive rent growth trends and deliver new student housing units in metros where rents are steadily climbing.
More Student Housing Insights
- Visit the Berkadia-RealPage October newsletter for a comprehensive look at where the student housing sector stands during fall 2019.
- Earlier this year, we had a chance to speak with Kevin Larimer and Greg Gonzalez, Berkadia’s Directors of Student Housing. Visit their Q & A for perspectives on the future of this exciting multifamily sector.