The Real Deal Miami

Touchdown! Landlords look to big-time football universities for deals

Investors are willing to shell out more for apartments near top-tier football colleges

October 12, 2016 12:00PM

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The University of Miami and a UM football player (Credit: Michael Tipton)

The University of Miami and a UM football player (Credit: Michael Tipton)

For decades, student housing has been big business for landlords around the country. But above all else, it’s properties near high-profile football universities that have private investors feeling the school spirit.

According to a Bloomberg report, investing in housing near universities has become a way for private landlords to hedge against a possible recession, as college enrollments have flourished in recent years while the stock of student housing has remained constricted.

Of those assets, the cream of the crop is properties near colleges with highly ranked football teams. Bloomberg, citing data from CBRE, reported that 50 of the 68 student housing complexes sold during this year’s first half were located near colleges with NCAA Division 1 teams.

That favoritism also means investors are willing to shell out extra cash for apartment buildings near highly ranked football schools. Cap rates for properties near non-Division 1 schools were 6.4 percent, while the rate for apartments near powerhouse football schools was 5.5 percent.

Besides the bragging rights a university has from hosting a winning team, schools with big athletic programs typically boast better academic reputations, according to Bloomberg. For private landlords, all that equates to more enrollees, and more renters. [Bloomberg]Sean Stewart-Muniz