Student Housing: The Collapse That Never Was
To paraphrase Twain, rumors of the demise of student housing development for this year were greatly exaggerated.
Student housing can be categorized as the collapse that never was. After a strong 2019, occupancy rates remained relatively strong in 2020, even during the prolonged lockdown and pandemic-related restrictions. In fact, the industry reported collections above 97 percent and pre-lease numbers in-line with 2019 velocity, according to Newmark Knight Frank’s 2020 Student Housing Mid-Year Market Overview.
This coupled with the vaccine distribution accelerating forward, its expected that there will be a boom in enrollment.
While online learning was necessary during the past year, students are still eager for the college experience and will be looking to move on campus and out of their homes. In this vein, operations in student housing complexes will exceed prior years’ operating numbers.
In a survey conducted by Student Housing Business, students placed more value on functional amenities, such as wi-fi, laundry, utilities, dishwasher, and parking over pools, fitness centers, and hot tubs. They also place a high value on convenience, which is why student housing is increasingly being positioned at the center of mixed-use developments.
There are several investment opportunities in today’s student housing market. Demand will continue to rise as the world population of college-age students also increase, and middle-class families invest more of their income in pursuing higher education.
Second, there is a large, untapped market for graduate student housing, a group with a different set of priorities, including more private accommodations and more space for their families.
The resiliency shown by this sector has defied expectations underscoring that student housing is a viable asset class for 2021.
– Mark Fogel, CEO, President