Reopening Plans Revive Investor Interest in Student Housing Sector
The past year has been a tumultuous time for the student housing sector, and with the COVID-pandemic not yet in the rear-view mirror, enrollment is expected to drop 15% in the current academic year. However, Coldwell Banker Commercial notes than an increasing number of colleges and universities plan to conduct onsite classes, and that bodes well for the investment outlook.
“College and university reopening plans for the fall of 2021 have revived investor interest in the student housing asset class,” according to a recent CBC posting. “That is giving them more certainty about cash flows for the year. Winners will likely be properties with some type of social distancing built in such as their own bathrooms, single occupant rooms, etc.
“In tandem with continued rollout plans for the three approved vaccines, and a push to return to normal campus life, some of the uncertainty in the student housing market is expected to solidify for the 2021-2022 school year,” according to CBC.
It won’t be an uncomplicated return to pre-pandemic campus life, though. Sixty-four percent of students enrolled at private colleges and universities normally live on-campus, compared to 40% of their public-school counterparts. Those percentages are subject to change, since the pandemic led schools to make plans for de-densified campus housing.
Additionally, during the pandemic colleges looked at neighborhood hotels for temporary dorm solutions “to increase their chances of safely reopening in time for the fall semester.
CBC Worldwide predicts the combination of limited capacity in existing dorms with a healthy desire for an on-campus experience will likely drive increased demand for off-campus housing in the near-term.”
- ◦Sale/Acquisition