Will the student housing boom last?

The industry is facing demographic and economic pressures

National /
Aug.August 15, 2018 08:00 AM

Clockwise from top left: The London in College Station, Texas, The Crimson in Tuscaloosa, Alabama, The Ivy in Tampa, Florida, and The Harrison in Harrisonburg, Virginia (Credit: CLS Living)

As more investors have funded housing near universities, overbuilding has been a danger for some property owners. Investors are being more cautious as some backers have seen their bonds downgraded.

Real estate fund managers raised $1.9 billion, through July, for student housing projects globally, the same amount as they raised in all of 2017, according to a report in Bloomberg.

Portfolios are trading at high prices, too. As a part of Greystar Real Estate’s $3.2 billion purchase of Education Realty Trust in June, the company formed a joint venture with the Blackstone Group to buy some off-campus locations for another $1.2 billion.

At the same time, existing portfolios are commanding steep prices. The influx of money has divided the market in two: areas where supply is tight and others where it’s excessive.

Student housing also faces unique pressures. For example, there’s much more turnover among tenants, so landlords have to constantly fill units. Robert Bronstein — president and co-founder of Scion Group, which owns more than 60,000 beds nationally — likened it to selling cruise tickets.

“Once you leave the dock, if you haven’t sold the room, you’re not going to,” he told Bloomberg.

Demographics are changing, too. As millennials age out of their college years, analysts warn demand could drop. [Bloomberg] — Meenal Vamburkar


Related Articles

arrow_forward_ios
Safehold snares ground lease under Ron Burkle’s troubled NoMad Hotel
Safehold snares ground lease under Ron Burkle’s troubled NoMad Hotel
Safehold snares ground lease under Ron Burkle’s troubled NoMad Hotel
29 West 34th Street and Jeff Sutton of Wharton Properties (Google Maps)
Jeff Sutton will get $9M back from Geox
Jeff Sutton will get $9M back from Geox
CMBS issuance is set to break Great Financial Crisis record, report
CMBS set to break Financial Crisis record
CMBS set to break Financial Crisis record
Aby Rosen dodges liability at Gramercy Park Hotel
Aby Rosen dodges liability at Gramercy Park Hotel
Aby Rosen dodges liability at Gramercy Park Hotel
NYCB CEO Thomas Cangemi (Getty, Cangemi)
NYCB says multifamily loans in good shape, not endangered by rent law
NYCB says multifamily loans in good shape, not endangered by rent law
2 N Lasalle Street & 200 W Jackson Boulevard in Chicago (us.jll.com, hearncompany.com)
NY’s Foundation Capital, Nightingale aim to buy Loop office towers
NY’s Foundation Capital, Nightingale aim to buy Loop office towers
RealSure CEO Katie Finnegan (LinkedIn)
Realogy, Home Partners of America iBuying venture hires first CEO
Realogy, Home Partners of America iBuying venture hires first CEO
Padel (it’s a sport!) club to open in Brooklyn warehouse
Padel (it’s a sport!) club to open in Brooklyn warehouse
Padel (it’s a sport!) club to open in Brooklyn warehouse
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...