Real Estate Trends Student Housing Market

National Student Housing Market Report – Q3 2022

National Student Housing Market Report - Q3 2022
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Student Housing Continues to Shine

Strong preleasing exceeds pre-pandemic levels

Report highlights:

  • The sector’s record-breaking streak carried over to the second quarter of the year, with concerns about falling enrollment rates dissipating.
  • The average preleasing rate at Yardi 200 universities reached 87.2% in June, up 10.1% year-over-year.
  • Annual rent growth hit 5% in June—an all-time high for the industry.

By mid-summer, the preleasing rate at Yardi 200 universities reached 87.2%, surpassing last year’s numbers and pre-pandemic levels. By comparison, preleasing was up 10.1% since June 2021, while the rate increased 7.7% since the same period in 2019.

The University of California-Santa Barbara, as well as the University of California-Irvine were both fully leased by the end of June and were among the top 5 Yardi 200 universities with highest year-over-year growth in percentage preleased. Oppositely, the University of Southern California (-16.7%) and Middle Tennessee State University (-15.6%) recorded the largest drops in preleasing percentage compared to last year’s figures.

Student housing rent growth still on the up-and-up

Rents at Yardi 200 universities have been gradually increasing through 2022 and in April, the curve of this growth steepened with no signs of an imminent slowdown. By the end of June, annual growth increased to 5%. The record-high rent growth in the sector was supported by the multifamily market’s boom, which experienced a 13.7% increase in rents year-over-year through June.

The average rent per bedroom reached $791 the same month, marking a 0.6% increase since the previous month. Across Yardi 200 universities with at least four properties, 21 registered double-digit rent growth year-over-year, while only four recorded rent decreases. Ohio State University (17.4%) and the University of Nevada-Las Vegas (15.8%) had the highest gains.

New-supply pipeline remains robust

By the end of the second quarter, roughly 135,000 bedrooms were in development at Yardi 200 universities, marking a 4.0% gain quarter-over-quarter. Among these, some 60,000 bedrooms were under construction—up 14.0% since the end of March. During the past 12 months through June, over 30,000 new bedrooms came online at Yardi 200 universities.

Institutions with the most number of bedrooms under construction in mid-2022 included Indiana University-Bloomington (4,713), Florida International University (3,553), University of Washington-Seattle Campus (3,476) and University of Maryland-College Park (3,406).

Student housing investor interest strong

As market fundamentals have remained robust trough 2022, investors continued to show increased interest in the sector. Sales volume at Yardi 200 universities totaled $2.4 billion in the first two quarters of the year, with an average sales price of $69,000 pe bed.

In April, Blackstone entered into an agreement to buy student campus company American Campus Communities, strengthening investor confidence in the sector. The $12.8 billion all-cash deal is expected to close in the third quarter of the year.

Read the full Matrix Student Housing Report-Q3 2022.

About the author

Beata Lorincz

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