Back-to-School Review of Student Housing

By Melissa Securda

As teenagers across the United States get ready to head to college, I thought it would be a good time to talk about student housing as a real estate investment.

The student housing market is a unique subset of the multi-family sector that tends to be less affected by economic conditions than traditional apartments. Currently, 22 percent of the US population (58 million people) is between the ages of five and 18, and regardless of the economy, a majority of these students will enroll in college. The demand for student housing will continue to rise, especially in a contracted economy when more people tend to pursue higher learning to increase their marketability. 

Leasing markets for student housing are driven by large universities and student housing is often found in markets that would not otherwise offer institutional grade investments. These properties are state-of-the-art and often include numerous amenities, which many students demand, such as private bedrooms and fitness centers.

On-campus dormitories are often outdated and are not plentiful enough to meet students’ needs.  Community colleges and state schools traditionally did not provide housing, or offered limited options to students. Because of the cost prohibitive nature of developing student housing on campus, many schools are not adding to the available supply of on-campus housing.

New apartment communities for students are in high demand and developers are offering solutions. The Villas at Chestnut Ridge opens this month and caters to University of Buffalo students with amenities such as private bathrooms and tanning beds.  The 552-bed project attracted more applicants than it could accommodate. 

Large-scale developments are under construction across the nation. University Gateway is an upscale, 421-unit development located near the University of Southern California and is expected to open in the summer of 2010. And in Louisville, Ky., students will be able to live in Providence, a three-building development with 522 units that will offer a clubhouse, pool, spa, and sundeck. 

Comments

[Dan Bradford]

Hi Melissa, nice post. You might be interested in our site dedicated to this niche... http://www.StudentHousingPlanet.com

cheers,
dan