Student Housing’s Strength

Sector shows resiliency, says Yardi Matrix

By Leah Etling on Oct 15, 2020 in Matrix, News

Despite massive disruption to in-person learning protocols, demand for off-campus, purpose-built student housing remains strong, according to a webinar and a new bulletin from Yardi Matrix.

“College students don’t want to live at home. And their parents seem quite amenable, if financial circumstances allow it, for them not to live at home,” said Jeff Adler, vice president of Yardi Matrix, during the webinar. “There’s been a tremendous amount of noise around the sector, but as it relates to the financial performance of off-campus student housing, it is largely unaffected.”

The one key factor is that college or university the students are attending must be offering classes in some capacity, even if they are all online. Need for greater social distance between students in on-campus dormitories have been another helpful nudge.

“As long as the school is open somehow, for the dedicated off-campus student housing inventory, (the education format) doesn’t matter,” Adler said. “The off-campus student housing industry has shown itself to be really resilient.”

Development pipelines also remain strong, with only two planned projects nationwide falling off the radar in the last quarter.

Enrollment trends have favored public universities rather than private schools, indicating that students may be looking for more affordable education alternatives given current economic uncertainty. And off-campus housing options provide a more continuous housing option than on-campus dorms, which are more likely to be subject to closures or status changes.

Though college enrollment from international students is down due to travel restrictions, those spots in off-campus housing seem to thus far have been backfilled by American students. One caveat is that these are students whose parents’ economic fortunes have likely not been disrupted by the pandemic.

And even if no vaccine is available in spring 2021 as expected, purpose-built student housing is expected to continue to do well.

“Even if everything goes horribly wrong (with vaccine development), the fact that this year was as good as it was indicates that as long as the school is open in some fashion, it’s a non-event for the off-campus student housing sector,” Adler said.

For the 200 colleges and universities the Matrix team analyzed, preleasing of purpose-built student housing was just 3 percent behind that of 2019.

“While demand has been volatile on a university-by-university basis, the willingness and desire for people to congregate near their school will likely help the student housing sector steer through these uncertain times,” states the analysis.

Preview new technology for student housing providers at the NMHC/InterFace Student Housing Conference, a virtual event taking place Oct. 19-22. Visit the virtual booth to see how RentCafe Student and Yardi Matrix Student will graduate your leasing and management capabilities.