SAN DIEGO—Anecdotally, most universities reported fewer international applications this year, reputedly based upon international concerns related to the rhetoric of President Trump, Pierce Education Properties' CEO and president Fred Pierce tells GlobeSt.com. Part 1 of this two-part story on student housing focused on changing student income levels and how they are affecting the type of student housing built. In part 2, below, we speak with Pierce about student-enrollment trends over the next few years, the need for privately managed student housing on a national basis and how federal immigration policies might change the face of student housing.
GlobeSt.com: What trends do you believe will affect overall university student enrollment over the next three to five years?
Pierce: According to the most recent projections from the National Center for Education Statistics, current high-school graduation forecasts and college-going rate expectations are expected to increase higher-education enrollments from approximately 20.4 million in 2017 to 22.6 million by 2026—an increase of approximately 1.23% per year. Also driving this continued growth are disproportionate increases in international-student and graduate-enrollments. Another factor in the next three to five years is the likelihood of an economic recession within that window. In times of economic downturn, university enrollments grow at a faster pace than during expansions (the “recession-resistant” characteristic of higher education and student housing), which could produce enrollment growth in this intermediate term at rates higher than the 10-year projected average. As such, as unemployment increases, more students stay in college longer or continue on with an advanced degree, both of which are a further boon for student housing in down cycles.
GlobeSt.com: What do demographics projections tell you, if anything, about the need for privately managed student housing nationally?
Pierce: The demand for privately managed student housing should steadily expand into the foreseeable future with education projected as one of the fastest-growing sectors of the economy. More and more, universities are looking to preserve their debt capacity for projects core to their academic mission including research space, faculty-office space, classrooms and the like, leaving student housing to increasingly be privately owned and operated—both on campus and off. More and more, on-campus housing projects are utilizing a public-private partnership delivery model, and virtually all housing for students other than the freshman class is located off campus and is privately owned and operated.
GlobeSt.com: How do future international student enrollments trends impact demand for student housing? Is this changing in any material manner?
Pierce: International students currently exceed one million and represent about 5% of US higher-education enrollment. International students are growing at a rate of more than 4% per year, as opposed to 1.2% for higher education enrollments as a whole. Nevertheless, today international students represent on average between 5% and 10% of occupancy in the purpose-built student housing market. We do project this to increase incrementally into the foreseeable future, but not to a magnitude that it changes total demand in a meaningful manner.
GlobeSt.com: Do you see US immigration policy changing international student migration?
Pierce: Data for Academic Year 2017-18 is not yet broadly available, but anecdotally most universities reported fewer international applications this year reputedly based upon international concerns related to the rhetoric of President Trump. However, it should be noted that nearly half of total international student enrollment comes from China and India, and higher-education enrollments from those countries are projected to further increase in coming years. Not including Saudi Arabia, only about 5% of international enrollments come from Middle Eastern and African nations where immigrations policies in the short run would be expected to reduce international-student migration in the intermediate term. In short, while we may experience a minor one or two-year decline in international student enrollments, I expect that trend to have immeasurable impacts on US higher-education enrollments as a whole and that the pattern of exponentially higher international-student enrollment growth to perpetuate into the foreseeable future.
Continue Reading for Free
Register and gain access to:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Carrie Rossenfeld
Carrie Rossenfeld is a reporter for the San Diego and Orange County markets on GlobeSt.com and a contributor to Real Estate Forum. She was a trade-magazine and newsletter editor in New York City before moving to Southern California to become a freelance writer and editor for magazines, books and websites. Rossenfeld has written extensively on topics including commercial real estate, running a medical practice, intellectual-property licensing and giftware. She has edited books about profiting from real estate and has ghostwritten a book about starting a home-based business.
