Student Housing Real Estate: 2021 Prospects
In the second installment of our outlook series, three student housing experts weigh in on what to expect for the industry in the year ahead.

Michael Orsak, Senior Vice President of Investments, Campus Advantage. Image courtesy of Campus Advantage
Prior to the health crisis, investment in student housing properties maintained healthy levels each year. The sector was steadily growing when the coronavirus hit, and universities were among the first institutions to close and send students home. Roughly nine months into the pandemic, investment in student housing dwindled significantly, although some transactions continued to be completed in select markets across the country.
While the second quarter usually sets the stage for fall sales activity, the leasing season was extended this year—in some cases, even past the start of the fall semester. “The industry was able to achieve an average occupancy of 89.2 percent, according to a CBRE survey of more than 500,000 beds. This is 370 basis points below the previous fall, and thus valuations have been slightly impacted,” said Michael Orsak, senior vice president of investments at Campus Advantage. As a result, sellers that are not in any distress are now waiting for the next leasing season to maximize their assets’ values before selling.
READ ALSO: Dealing With Vacant Student Housing Space During a Pandemic
“These delayed dispositions will result in a reduction of sales activity in 2020, and the industry will likely see around $4 billion in sales versus its peak of around $10.5 billion in 2018,” Orsak expects.
How long will it take for the industry to fully recover from the COVID-19 fallout? Orsak believes that by fall 2021, the industry should be back on track as it relates to property performance, capital markets and investment sales.
“There will definitely be pent-up demand from both the buy and sell side that will be looking to transact once they maximize value next fall,” he noted. “As an industry, we are working together to provide some operational data to the marketplace to stoke the fire of the resiliency of the asset class.”
Trends to watch
From a development standpoint, the student housing market also performed well over the past few years. However, just when developers were focusing on increasing socialization at their student housing properties through shared rooms and bigger communal spaces, the health crisis created the opposite need. So developers had to find solutions to the empty space problem.
“As a developer, it is crucial to ensure that each student has their own bathroom. It has been common for student housing units to be designed with four bedrooms and two bathrooms,” Epelboim Development Group’s CEO Noel Epelboim said. Usually, there can be up to 10 computers in use in a four-bedroom unit. Now, to maintain the 6-foot space guidelines, developers need to find a way to provide larger rooms for computers and/or laptops.
Even though many schools closed their campuses and shifted to online instruction in response to COVID-19 concerns, some students still prefered to live on campus rather than at home with their parents. According to Epelboim, 30 percent of the leased units were fully occupied during the pandemic. And to comply with Centers for Disease Control and Prevention guidelines, technology proved to be a reliable help during these trying times.
“With COVID-19 concerns rising, we identified an increased need for apps that allow students to make requests for services, maintenance and other needs without going to the front desk or making an in-person request,” he noted. “As an added benefit, the apps also serve as a touchless means of opening room doors and they are gaining momentum.”
Walter Marin, senior principal at Marin Architects, further stressed the importance of technology by pointing out that “there is no way to rent an apartment without internet access. No one will be developing or putting units on the market without addressing the need for increased internet access,” Marin said.
Orsak expects the need to use technology in student housing to increase in 2021 and beyond, not only for students but also for owners and operators. “I think we will continue to utilize more web and social media-based advertising moving forward and continue to leverage technology to improve efficiency.”
2021 expectations, predictions
The migration trend of students looking to relocate from primary markets to secondary markets—which was well underway prior to COVID-19—will continue into 2021, Epelboim expects. “From big cities in the Northeast to smaller, less pricey cities in the Southeast, such as Charlotte or Raleigh-Durham, N.C.—places where the towns actually developed and grew around the school.”
Investors remain confident in the student housing sector being one of the best asset classes to invest in, based on its resilience during the economic recession of 2008.
When it comes to supply for next year, Orsak thinks that “2021 should be a relatively quiet year with only 39,000 beds forecast to be delivered. This is 20 percent less than the five-year historical average of deliveries.”
The hottest amenity students will be asking for going forward will be bathrooms, according to Epelboim. This calls for a reconfiguration of the traditional four-bedroom, two-bathroom unit. “To ensure a bath for every bed, two of the four bedrooms can be reimaged to create larger rooms and common areas that allow for compliance with social distancing requirements,” he concluded.
Additionally, as far as architecture and design go, designers will be more inclined to use fabrics and materials that are less likely to allow germs to linger, Marin said. Ensuring healthy indoor air circulation will be another priority for student housing architects.