What happened: The Wall Street Journal reported that the lack of supply and strong demand for student housing in colleges had enabled the student housing sector in the U.S. to defy the current downward trend in the commercial real estate sector. What the number says: According to CBRE data, student housing property sales reached an all-time high figure of $22.9B last year. This asset class has proven to be recession-proof as demand for education remains consistent even during times of economic downturn. Rent growth, which was suppressed during the pandemic, started increasing last year and has led to a surge in sales. However, student housing markets near smaller or lesser-known institutions have suffered due to weaker demand and declining enrollment. Despite the fall in enrollment, preleasing activity for the upcoming fall semester has matched pre-pandemic levels.
Relevance: The report expects rents for student housing to increase, especially at top research universities and schools in the highest-earning athletic conferences. This student housing potential has convinced investors like Blackstone to acquire American Campus Communities for $12.8B last year. |
