Investor’s Wish List: More Student Housing

May 10, 2017

The student housing market is hot. Sales of this market segment are outperforming the rest of the commercial sector in the first quarter. In fact, if investors continue to buy and sell student housing at the current rate, they’re on track to match the record acquisition volume of 2016.

Investors purchased and sold $1.1 billion in student housing properties in the first quarter of 2017, according to CBRE, a real estate services firm.

For the past three years, student housing transaction volume has set records, says David Borsos, vice president of capital markets with the National Multifamily Housing Council. In 2014, student housing sales totaled $3.5 billion; they were $6 billion in 2015 and $10 billion in 2016.

But economists believe student housing sales could be much higher if it weren't for a shortage of supply, which they say will likely keep the number of student housing properties sold close to last year’s pace.

“Interest in student housing has been growing steadily, as more investors look toward less traditional asset classes within commercial real estate,” says Ethan Vaisman, a real estate economist with CoStar, a real estate research firm. “Much more institutional capital has entered the student housing space as of late.”

Source: “Student Housing Sales Outperform the Rest of the Market,” National Real Estate Investor (May 8, 2017)