Consolidation and Competition in the Student-Housing Sector

Pierce: “In 2017, more than 40% of domestic institutional investors indicated an intent to invest in student housing. This speaks to an increasing institutional appetite for the category.”

SAN DIEGO—Now that it’s recognized as a viable and profitable alternative category for those looking to diversify, student housing is encouraging strength of scale and drawing private, public and international investors, Pierce Education Properties L.P.‘s president and CEO Fred Pierce tells GlobeSt.com. Pierce recently noted that the top 25 owners in the student-housing sector continue to dominate student-housing ownership, with their annual market share of the AXIO 175 markets (which reflects the 175 national student housing markets surveyed by Axiometrics) ranging from 59% to 69% and averaging 65% in recent years. This shows that as more than 261,000 new beds were delivered to the national marketplace since 2010, the majority of that additional supply has either been held by or sold to the top 25 owners.

In addition, the aggregate beds owned by the top 25 has increased 75% since 2010 from 276,412 to 482,684 beds today, Pierce says. The relative market share also affirms that the top 25 remain the major players in the acquisition of existing student housing assets.