Housing sector

The student housing sector remains strong

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The industry’s rapid recovery from the initial pandemic-induced woes has continued into 2022, according to a recent Matrix Yardi report. The student housing sector recorded strong growth in pre-lettings and rents in the first quarter of the year.

Ongoing economic setbacks, such as labor shortages and supply chain issues, had little impact on student housing construction as deliveries did not experience significant slowdowns. Undergraduate enrollment has contracted nationwide, down 3.1% year-over-year through fall 2021, but Yardi Matrix still predicts positive outlook for industry dedicated off-campus student housing.

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At the end of March, 63.7% of beds at Yardi 200 universities were pre-released, up 13.5% year-over-year and surpassing 2019 levels. A short list of institutions was pre-released at nearly 100%, including Purdue University (99.9%), University of Pittsburgh (99.8%) and University of Wisconsin-Madison (98.3%).

The average rent at Yardi 200 universities reached $777 in March, up 0.5% from February and 2.9% year-on-year. That year-over-year growth outpaced fall 2019 rental growth before the pandemic, which stood at 2.8% in March. Some of the institutions that recorded the highest annual rent growth included University of California-Riverside, University of Nevada-Las Vegas and Wichita State University, while only three universities in the Yardi 200 recorded negative annual rental growth.

In the past year to March, some 26,000 rooms were finalized at Yardi 200 universities. That month, 130,000 rooms were in the works, while a total of 28,000 rooms are expected to be delivered in 2022, i.e. 3.7% of the total stock. Universities with the most rooms under construction included the University of Washington-Seattle campus (3,476 rooms), the Georgia Institute of Technology (3,163 rooms), and the University of Texas at Austin (2,950 rooms).

The resilience of the student housing sector has sparked increased investor interest, with $920 million trading in the first quarter of the year at Yardi 200 universities. The average price per bed has been around $84,000.

Head to Yardi Matrix to read the full report.