Higher Student Housing ROI Decoded: Q&A With Township Capital’s CEO
Matthew Gorelik shares insights on achieving success in a competitive sector.
Student housing continues to outperform other asset types, attracting steady investor interest. Of course, not all properties and operators are achieving the same level of success. Multi-Housing News asked Township Capital Founder, Chairman & CEO Matthew Gorelik about the secrets to higher student housing ROI and about how investors can position themselves for long-term growth.
Township Capital has been capitalizing on opportunities in the student housing sector for more than a decade—primarily in the Southeast and Midwest as well as California and New York. With a student housing portfolio nearing 21,240 beds and a total of $3 billion in projects since 2014, the company is mostly active near institutions where student housing demand is high, such as Florida State University, Indiana University at Bloomington and the University of Texas at Austin.
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How would you describe the student housing sector’s performance over the past 12 months?
Gorelik: The student housing sector has performed well over the last 12 months, especially compared to other real estate sectors. We have seen strong occupancy, with all our active investments achieving at least 89 percent occupancy and many hovering around 95 percent occupancy with strong rental performance. We have also seen encouraging preleasing numbers for the 2025-2026 academic year, which is crucial to performance in the student housing sector.
More and more students are looking for new, highly amenetized housing products with pools, conference rooms, laundry, lounges and fitness centers. This, along with college enrollment having returned to pre-pandemic levels, is key to demand growth in the student housing sector.
From your experience, what makes the difference between a successful student housing property and one that struggles to generate ROI?
Gorelik: A large portion of success can be attributed to the pre-development and acquisition due diligence phase. It is imperative to understand the market dynamic and demand drivers in the submarket before entering a deal. For example, it is important to know where the asset is in relation to the university and if there will be any issues transporting to university buildings. It is also important to understand how many beds the school will need to size the deal correctly. Successful student housing projects generally provide high-quality housing with many amenities tailored to the student experience. If the product delivered does not provide students with a great experience, they are likely to move on to other housing options.
What are the common mistakes investors make when entering this space?
An often-overlooked key to success is choosing the right partner and manager. Even if on a deal level the project looks fantastic, if the correct management is not in place, it can quickly turn into a nightmare. With hundreds of college-age students moving in and out of the projects every year, there is a ripe opportunity for these assets to become dilapidated and worn down rapidly if management is not superb and on top of any issues that arise.
What are some of the financial structures that have allowed you to achieve higher portfolio performance, in terms of both investment and occupancy?
Gorelik: Township Capital makes general partner co-investments and special situation investments alongside best-in-class commercial real estate operators and institutional capital partners in all major U.S. markets. We have built a bridge for investors to access a portion of the capital stack rarely available to individual investors, providing an opportunity to participate in the GP’s disproportionate share of profits and access to institutional-quality assets, sponsors and capital partners. For general partners, Township provides access to a single-entity, institutionally structured investor and enables scalability and increased liquidity.
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Enrollment is typically used as a benchmark in student housing, along with other fundamentals. What is an ideal threshold for the student population that helps predict long-term success? What are some other university factors that showcase the viability of a market, in your opinion?
Gorelik: Township generally looks at mid-to-large universities with a strong history in large (athlectic conferences) such as SEC, Big 10, etc. One reason is that institutional investors look primarily at these large conference schools, allowing us to have prospective buyers at a future exit point. Additionally, large universities with a student enrollment between 35,000-40,000 with large football and basketball programs, etc., are generally more community-based and will have a higher demand for student housing.
These large universities tend to have parents who have saved up for their child to enroll and, therefore, have money readily available to pay for high-quality student housing. Universities near city centers, entertainment and hospital systems can also be a plus. In addition to this, we review other comparable student housing assets in the area to gauge demand in the market and see where rental rates stand. Reviewing preleasing numbers at an asset is imperative to see product demand compared to the market.
How does a university’s sports culture play a role in determining the success of a student housing investment?
Gorelik: University sports culture can play a role in determining the success of a student housing investment in a few ways. A strong sports culture can ensure national visibility to schools and create legacy students, decreasing demand risks as compared to other schools. Large universities with large sporting programs tend to be more community-based and therefore need more student housing supply.
More importantly, with a strong sports culture, a university may have more than one “prime” location. Rather than proximity to educational buildings solely being a demand driver, being nearby sporting locations such as university stadiums, fields, etc. can also be seen as a massive upside to a student housing asset.
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Are there any strategies that you’ve implemented for the other types of assets you operate such as conventional multifamily and senior housing that have proven effective for student housing as well?
Gorelik: In our extensive experience, the strategy that has been most beneficial in the success of our investments, especially for student housing and senior housing, is strategically partnering with best-in-class operators. For senior housing and student housing, creating a superior product is only half of the battle. With our extensive history in senior housing development and acquisitions, we have seen our fair share of investments with a range of outcomes. A significant factor in determining success hinges on the management and operation of the asset.
In senior housing, there are a multitude of details that management must handle daily. This includes care for the residents, constant upkeep of the building and detailed coordination with vendors. Because we have seen how imperative a quality operator is for senior housing, we have taken the same care in choosing partnerships for our student housing investments as similar issues arise between the two asset classes.
How do you expect the sector to perform in the following months?
Gorelik: We expect the sector to continue to perform well in the following months. As this academic year comes to an end, we will see new and renewal preleasing numbers rise and will see what concessions will be necessary to receive the desired rental rates. As macroeconomic conditions shift over the coming months, we expect to see more institutional interest in the student market sector due to growing demand and reduced risk compared to other asset classes, which in turn will decrease exit cap rates and increase potential sale proceeds, generating greater returns for our investors.
