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Student Housing Performance Still Stellar

Rent Growth, Leasing Velocity Up

By | Wednesday, August 3, 2016

The student housing sector has continued its strong performance during the Fall 2016 leasing season, which is nearing its end as move-in is just a few weeks away.  Annual effective rent growth for privately owned, purpose-built properties is higher than previous years, leasing velocity is in line with last year’s record pace and few delays have been identified so far.

Some 47,700 new beds are expected to be delivered by the time students arrive for the coming fall semester, according to Axiometrics’ student housing research. Once again, Southeast Conference (SEC) schools dominate the list of universities with the most incoming supply, providing six of the top 10. 

Looking ahead one year, Axiometrics has identified 43,800 new beds to be delivered for fall 2017, including a 792-bed project near Texas A&M University that was originally scheduled to open this year. Of those 2017 deliveries, 14,400 are still in the planning stages.

Three Texas schools are among the 10 universities with the most identified off-campus supply in 2017, with only three SEC schools on the list to date.

As mentioned above, more than 47,000 beds are expected to deliver next month and 43,800 are being tracked for 2017 delivery. These numbers are below the peak figures seen a few years ago.

By all measures, student housing properties are showing strength in the market, as the sector continued to mature.

  • Nationally, average rent was $618 per bed per month for the Fall 2016 leasing season.
  • Annual effective rent growth was 2.3% through June, above the 2015-16 average of 2.0%. Properties are pushing rents and still maintaining leasing velocity.
  • Properties located less than one-half mile from campus recorded an average rent of $672, a premium of $54.
  • Annual effective rent growth for properties located less than one-half mile from campus was 2.3% for Fall 2016.
  • Average rent at properties located between one-half mile and one mile from campus was $553.
  • Rent growth of 2.7% for those properties was above the overall average, suggesting higher demand for less expensive – but still well-located -- properties.
  • Properties located more than one mile from campus charged an average of $537 per month to its residents.
  • Rent growth, however, was below the overall rate, at 1.7%.

  • Leasing velocity is leveling out year-over-year. Student housing properties were 83.4% leased as of June 2016, up 15 bps from June 2015.

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