According to Amalia Otet in “The Balance Sheet”, investor interest in the collegiate housing sector has grown all around the country, most likely prompted by a steady demand for both on-campus and off-campus apartments and a lack of available units around major university hubs. Basically, Universities have bitten off more than they can chew, having to rely on outside third parties to build and manage campus student housing to accommodate the student population. Along with this, Student housing investment interest is sparked by favoring demographics. The National Center for Education Statistics (NCES) estimates that between 2000 and 2010, the percentage of 18- to 24-year-olds enrolled in college rose by 600 basis points to 41 percent. Between 2010 and 2020, NCES expects an 11-percent spike in college enrollments by under 25-year-olds and a 20-percent spike in college enrollments by students aged 25 and older. In conclusion, Universities are seeing a steady increase in student enrollment, in large part due to the offspring of baby boomers going to college and the increased societal value put on a college education. Demand for student housing is rising and commercial real estate companies are happy to accommodate these demands.
After reviewing these two articles and from my real estate experience, here are three action items I recommend you consider for the student market:
- Highly Stable - Recognize the the Student housing sector is one of the biggest growing and most stable niche sector in real estate. This means a long term market for you and your organization.
- Favorable Demographic Trends- use existing demographic data and prior research to begin to generate interest from investors in the student housing sector.
- Possible expansion in Social Media - use social monitoring to view area’s that millennials are talking about housing needs/wants, giving you a edge on competitors.
It is important for you to recognize the potential of the student housing market and see the future trends. Investing in student housing can yield a stable return for years to come. It's important for real estate professionals to consider adding student housing to their real estate marketing mix in the future.