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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.” 

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JLL's LeathermanJLL's Hayes

About Paul Bubny

Paul Bubny serves as Senior Content Director for Connect Commercial Real Estate, a role to which he brings 13-plus years’ experience covering the commercial real estate industry and 30-plus years in business-to-business journalism. In this capacity, he oversees daily operations while also reporting on both local/regional markets and national trends, covering individual transactions across all property types, as well as delving into broader subject matter. He produces 15-20 daily news stories per day and works with the Connect team and clients to develop longer-form content, ranging from Q&As to thought-leadership pieces. Prior to joining Connect, Paul was Managing Editor for both Real Estate Forum and GlobeSt.com at American Lawyer Media, where he oversaw operations at both publications while also producing daily news and feature-length articles. His tenure in B2B publishing stretches back into the print era, and he has served as Editor in Chief on four national trade publications. Since 1999, Paul has volunteered as the newsletter editor of passenger rail advocacy groups (one national, one local).

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