Student Housing Asset Class
Purpose Built Student Housing
The student housing asset class has a history of steady demand and protection from economic fluctuations as student continue to enroll into universities and colleges as well as continue to seek advanced degrees.
This student housing asset class is more than an outdated cinder block dorm room, it’s a purpose-built off-campus student housing apartment that is focused on the needs and desires for today’s college students.
These purpose-built student housing properties are specifically designed that focuses on three area: the student living space, shared living spaces and the student community social spaces.
“Student housing may be one of real estate's best-kept investment secrets.”
“Student housing offers a degree of stability that isn’t always present in other real estate sectors.”
Why You Consider
Adding Student Housing to Your Portfolio?
Here are five reasons why student housing is booming and a significant opportunity for investors!
1. Recession-Resistant Characteristics
Student housing occupancy rates remain stable during economic booms and may actually rise during downturns because of increased college attendance.
2. Students Are Staying in School Longer
Four years is no longer the standard for degree completion. According to the U.S. Bureau of Labor Statistics, exactly two-thirds of high school grads are taking significantly longer to complete their degrees. Where are they going to live while in school?
3. Increase of Rental Rates
Overall the rental revenue, rental rates, and net operating income in student housing properties across the country have continued to rise year over year due to student demand and limited space.
4. Value-Creation Potential
Increased student housing demand by renovating and creating value- add improvements to the properties, may help realize higher returns at a faster rate as compared to the acquisition of stabilized assets.
5. Optimal Investment Strategy
Student housing provides appreciation potential, an inflation hedge, portfolio diversification, and monthly income with tax efficiency through depreciation anchored by student housing assets.
80% of College Students Live Off-Campus
J Turner Research On Student Housing
1. Steady University/College Enrollment
“…We’re projecting a positive and remain stable over the next five years,” says Taylor Gunn, director for student housing for data firm Axiometrics.
2. Student Are Staying in School Longer
According to the U.S. Bureau of Labor Statistics, exactly two-thirds of high school grads are taking significantly longer to complete their Bachelor's degrees. Where are they going to live while in school?
3. Outdated Student Dormitories
The aging of on-campus dormitories is becoming outdated and obsolete and lack the needs and wants that today's students are asking for in their living spaces. These purpose-built student housing properties offer a wide variety of amenities such as private rooms for students, game rooms, media lounges, pools, hot tubs and more and varies per location.
4. Student Seeking Advanced Degrees
More and more students are seeking advanced degrees such as their Master's or Doctorates Degree and need a place to live that is close to the Universities campus.
What drives and sets demands for
Student Housing Demand Market Drivers?
Below are some of the industry characteristics and demand marketing drivers for student housing off-campus apartments.
5. High Demand / Low Housing Supply
Due to a variety of reasons (e.g. limited government funding to add new dorms and upgrade existing ones as well as limited landing surrounding the university makes it very difficult for new competitors to enter the market.)
6. Easy Student Leasing Model
Student housing leasing models are based on the room or by the bed. This makes leasing a student housing apartment very attractive to the student and their parents.
7. Pedestrian-to-Campus Location
The closer the off-campus student housing property is to the campus creates higher demand and makes the student housing property even more attractive.
4,600 College Institutions Service Over 20 Million Students.*
*National Center Of Educational Statistics 2016
1. Close to Campus
The most ideal off-campus student housing apartments are located as close as possible to the university. Usually, the idea student living properties are half-mile or less to the university and called pedestrian-to-campus that is easy to walk to bike to the classroom.
2. Inviting Purpose-Built Living Spaces
The purpose-build student housing properties are specifically built with student and luxury in mind. These ideal living spaces are fully furnished and designed with personal space for the students that includes a personal, bedroom, closet and bathroom and shared areas such as the kitchen and living room with a modern touch.
3. Featured Rich Community Amenities
The ideal student housing apartments offers featured rich community areas that could include study rooms, fitness rooms, media room, volleyball courts, hangout areas, game room, pool tables, hot tubs, swimming pools to tanning beds and more.
4. Student Privacy
Most purpose-built student housing properties to where the student has their own private room, bathroom and closet.
5. High Speed Internet Access
Four years is no longer the standard for degree completion. According to the U.S. Bureau of Labor Statistics, exactly two-thirds of high school grads are taking significantly longer to complete their degrees. Where are they going to live while in school?
6. Social Community Activities
Overall the rental revenue, rental rates, and net operating income in student housing properties across the country have continued to rise year over year due to student demand and limited space.
7. Individual Leases
Student housing apartment properties usually offers individual leases (by the bed) making it simple and easy on the student to pay their rent and not have to worry about collecting other people’s rent.
What is
Purpose-Built Student Housing?
As the standard of living which is driving more demand by focusing on student needs.
4,600 College Institutions Service Over 20 Million Students.*
*National Center Of Educational Statistics 2016
