Axiometrics on Cheddar TV: Student Housing Interest Growing

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Axiometrics on Cheddar TV: Student Housing Interest Growing

Supply, Enrollment Rise

By Taylor Gunn | Monday, December 19, 2016

The student housing industry has been a hot topic over the last few years, and Jay Denton. Axiometrics Senior Vice President of Analytics, discussed the
growing sector
on Cheddar TV recently. The interview took place on the floor of the New York Stock Exchange.

Cheddar TV asked what has grown or changed in the student housing industry.

“Ten to 15 years ago, it was an untapped market,” Denton answered. If we look at the amount of supply being delivered today relative to 15 years ago, the change is astonishing, according to student housing research. The average number of beds delivered was 23,500 per year from 1995-2010, compared to 47,700 in the current cycle (2011-2016).

Student Housing Supply

The volume of supply has more than doubled the historical average. These new assets are also becoming nicer and being built closer to campus. The average distance from campus is 0.7 miles for properties built between 1995 and 2010, whereas properties built during the current cycle are on average less than a half-mile from campus.

Average Distance From Campus

Not only has the amount of development picked up in recent years, but the number of investors, owners, and operators in the space also has increased. Transaction volume in the sector has hit all-time highs in the last few years.

Cheddar asked, “But why are investors looking to student housing?”

What’s really attractive is enrollment keeps going up, on average, for four-year public schools, Denton explained.

“Imagine you’re in a type of industry that even when in a recession, you can get positive revenue growth,” Denton said about the industry.  That’s one of the reasons investors like it; it’s more stable and even during bad times, we still see good results.

Total Enrollment Axio 175

While there is growing interest in the space, not everyone can just jump into an investment and expect success. Several things need to be considered when investing in the space and identifying the best opportunities. A few of them are:

  1. Location – Find a university with a student base that fits your investment criteria and a site located close to campus and near popular areas of town for students.

  2. Research – Do your research. It’s important to know what’s actually going on in the market; demand trends, existing and future supply, and more.

To find out more about identifying the best opportunities for student housing, contact info@axiometrics.com.

 

 

Taylor Gunn

Taylor Gunn

Student Housing Analytics Lead

Taylor Gunn is Axiometrics' Student Housing Analytics Lead.

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