Post-Covid Market Fundamentals Place Spotlight On Student Housing, And Investors Are Betting Big
December 6, 2021 | Bianca Barragan | Bisnow
Just as students are growing more desperate for campus housing with some resorting to live in vans or motels as a result of lower inventory and rising rents, investors across the board are looking to increase their foothold in the sector.
Institutional investors, foreign equity and private capital buyers alike have flooded the sector since the onset of the coronavirus pandemic, seeking the higher yields the asset class presents compared to more traditional areas of investment, industry experts tell Bisnow.
Newmark Vice Chairman and head of its student housing division Ryan Lang said in the past 18 months, he’s seen more new equity in the student housing space than over the past five years combined.
“Student housing has been kind of the net beneficiary of really compressed yields on market-rate, conventional [housing] and other really hot asset classes right now,” Lang said. “Certainly over the past 18 to 24 months, [student housing] has looked like a relative bargain.”
For that reason, Lang said, major investors like Blackstone and Brookfield are circling around student housing. In August, Brookfield Asset Management was reportedly in talks to acquire at least $1B worth of student housing properties through a joint venture with The Scion Group, which operates 58,700 student housing beds across more than 200 colleges and universities. That same month, Blackstone Real Estate Investment Trust moved to form a $784M joint venture with Landmark Properties to recapitalize eight properties with roughly 5,400 beds that Landmark owns throughout the country.
“We’ve seen a very quick uptick in student housing occupancy to pre-Covid levels, which is one of the reasons we’re so bullish on the space,” Blackstone Senior Managing Director Jacob Werner told Bloomberg in August.
