ATLANTA, GA – After showing impressive resilience during the
Great Recession, the student-housing sector is set for a strong future and is
attracting increased interest from investors.
 |
| Michael Bull |
Those were some of the points made by a panel of
student-housing experts on the most recent episode of the “Commercial Real
Estate Show,” hosted by Michael Bull of Bull Realty. The episode
examined many topics related to the sector, including in-demand amenities, rent
growth, financing and construction costs.
“To sum up, conditions right now really look good for the
student-housing market,” said Ronald Johnsey, president of AxioMetrics
Inc.
Student-housing communities performed better in terms of
rent growth and occupancy than traditional apartments during the recession, in
part because many people returned to school during the downturn to improve
their employment prospects, Johnsey said.
 |
| Ronald Johnsey |
Now, with much of the Millennial
generation entering their college years, overall college enrollment growth in
the United States could average 1.5 percent a year for the next decade, he
said.
Combine increasing enrollment with decreased state funds for
building or renovating on-campus residences, and the demand for privately
developed and operated residential communities near colleges should continue to
be strong, Johnsey noted.
Rent growth should actually slow in 2013 because a sizeable
amount of new supply – 50,000 beds – will be delivered this year, according to
Johnsey. However, rent growth should rebound to 3.7 percent next year, and
“occupancy should be in the 96 percent range over the next four years,” Johnsey
said. “We think the outlook’s great.”
 |
| Ted Rollins |
The areas
surrounding the non-flagship schools of public university systems offer great
opportunities for student-housing developers and operators, said Ted
Rollins, CEO of Campus Crest. That’s because enrollment at the institutions
is growing as students seek cheaper tuition costs, he said.
“Students are focusing on these non-flagships due to their
value and the quality of education that the students are getting,” Rollins
said.
Amenities at student-housing communities are more elaborate
than ever, said David Nelson, a vice president with Carter. “It’s about
trying to provide almost an all-inclusive environment for students, where they
canstudy and be productive, where they can hang out and have fun without”
leaving the community, he said.
 |
| David Nelson |
Resort-style pools, golf simulators and even tanning beds
are among the common amenities, Nelson said.
Financing for
student-housing projects has become more readily available in recent years,
even to the point that non-recourse loans are not unheard of, Nelson added.
Still, lenders are
carefully evaluating the developers and operators they’re giving money to,
according to Miles Orth, chief operating officer of Campus Apartments.
“We are constantly getting feedback – whether it be from the life companies or
GSEs – that experience is the most critical aspect for them, whether it be on
the [project] delivery side or the management side,” he said.
 |
| Miles Orth |
The entire
student-housing episode is available for download at
www.CREshow.com.
The next “Commercial Real Estate Show” will be available on July 17 and will
feature an update on the U.S. office market.
For a complete
copy of the company’s news release, please contact:
Stephen Ursery
The Wilbert Group
Please note new office number: (404) 549-7150
Cell: (404) 405-2354
