Student Housing Recovery Forges Ahead
Following a stellar performance last year, the student housing sector remains strong in 2022.
The industry’s fast-paced recovery following initial pandemic-induced woes continued into 2022, according to a recent Yardi Matrix report. The student housing sector recorded robust pre-leasing and rent growth in the first quarter of the year.
Ongoing economic setbacks, such as labor shortage and supply chain issues, had little impact on student housing construction, as deliveries did not record significant slowdowns. Undergraduate enrollment has contracted nationwide, with a 3.1 percent year-over-year decrease through the fall of 2021, but Yardi Matrix still predicts a positive outlook for the dedicated off-campus student housing industry.
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By the end of March, 63.7 percent of beds at Yardi 200 universities were preleased, up 13.5 percent year-over-year and exceeding 2019 levels. A short list of institutions were nearly 100 percent preleased, including Purdue University (99.9 percent), University of Pittsburgh (99.8 percent) and the University of Wisconsin-Madison (98.3 percent).
The average rent at Yardi 200 universities reached $777 in March, up 0.5 percent since February and 2.9 percent up year-over-year. This year-over-year growth surpassed pre-pandemic fall 2019 rent growth, which stood at 2.8 percent as of March. Some of the institutions that recorded the largest annual rent growth included the University of California-Riverside, the University of Nevada-Las Vegas and Wichita State University, while merely three universities at in the Yardi 200 registered negative annual rent growth.
Over the past year through March some 26,000 bedrooms have been finalized at Yardi 200 universities. That month, 130,000 bedrooms were in the making, while total of 28,000 bedrooms are expected to deliver in 2022—amounting to 3.7 percent of total stock. The universities with most bedrooms under construction included University of Washington-Seattle Campus (3,476 bedrooms), Georgia Institute of Technology (3,163 bedrooms) and The University of Texas at Austin (2,950 bedrooms).
The resiliency of the student housing sector has been driving heightened investor interest, with $920 million transacted in the first quarter of the year across Yardi 200 universities. The average price per bed clocked in at roughly $84,000.
Head over to Yardi Matrix to read the full report.