Student Housing

Niche market opportunities have been a growing area of attention lately. LIHTC, military and student housing development are all subsets of multifamily housing that have been consistenly active and somewhat immune to fears of being impacted by general economic conditions.

Homeownership rates can influence demand in rental housing but have little impact on student housing.

I came across some interesting statistics in a recent student housing market study produced by Daniel Hogan at Red Capital. Here are some general findings:

• The US Student Housing market consists of 7.5mm beds, 2.2mm are on campus.
• Between 2006 and 2011 college enrollment will increase by 1.3mm students.
• Few colleges are prepared to house these new students on campus since most of their limited resources are spent renovating existing structures that date back to the 60's.
• Parents and students will pay the premium for security and technology.
• Occupancy rates are higher than traditional market-rate housing (97 to 100% at institutional grade assets).
• NOI, appreciation rates and overall investor return in student housing are significantly higher than market-rate.
  

Many of these developers and operators are not on the MFE50 list and may not be on the radar of your sales team. This is another example of the opportunities that can get lost behind broad market statistics.