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Student Housing Sector Gets Boost from New Investors, Return to Campus
Following the tumultuous year that 2020 was for student housing, the sector is getting a boost from the return of on-campus learning as well as investor interest from both established players and newcomers, says JLL.
Year-to-date investment sales volume is $4.85 billion, compared to $.6.25 billion for all of 2020. Senior director Teddy Leatherman with the JLL Capital Markets National Student Housing team said she anticipates the fourth quarter of 2021 to be exceedingly busy.
“With how compressed multi-housing cap rates have become, investors are focusing on yield,” said Leatherman. “Right now, we are seeing a spread of 80 basis points between student housing and multi-housing cap rates, and we are seeing more multi-housing investors looking to buy into the student housing market. This has made our sector more competitive.”
With foreign capital and institutions less active in 2020, private capital took the lead in terms of transaction volume. However, JLL senior director Stewart Hayes said that trend is reversing this year.
“Some of these new entrants are conventional multi-housing investors and some are experienced commercial real estate investors who have historically focused on other product types but, because of how resilient student housing has proven to be historically, see this as an opportunity to invest,” Hayes said. “In some of our recent assignments, new entrants have totaled up to half of bidders.”
- ◦Sale/Acquisition
