Student housing occupancy could increase in the fall semester, according to Fred Pierce of Pierce Education Properties. In a recent video presentation on the state of the student housing market that GlobeSt.com gained exclusively, Pierce offered an optimistic outlook for student housing in the 2020-2021 school year. While he expects university enrollment will be flat, shuttered on-campus housing options could boost occupancy in adjacent student housing properties.
"I believe that university enrollments at tier one, power five football conference universities in America will be level this year. In recent years, those have been growing, and there are a couple of factors in this COIVD environment that may slow that down just a bit," said Pierce. "That would include freshman. I think the freshman class may be slightly smaller, which would be the result of students taking a gap year or staying closer to home and enrolling in a community environment."
Peirce also expects international student enrollment will decrease, but these trends will also be offset by reduced study abroad attendance and increase graduate school attendance. "There will also be a slight down tick in international students. Some will have difficulty getting a visa and getting into the country, and these would be first time students, either freshmen or graduate international students," said Pierce. "So, there will be a slight decline in international students, I think that there will be an offset by an increase in domestic graduate students, students that are graduating this spring and can't get a job, so decide to continue their education in graduate school."
Already, 120 universities have announced plans to have in-class instruction in the fall, and others are considering hybrid programs with partial in-class and partial online attendance. "I expect that trend will continue, but there may be some regional exceptions," he said. "By and large, I do except America's universities will be open."
In addition to attendance, Pierce also expects to gain residents from on-campus student housing facilities. Between 20% and 50% of the bed capacity at on-campus facilities will be vacant due to social distancing requirements. "Those students are going to need a place to go. So, I think occupancy could be higher than it has been the last couple of years," said Pierce.
So far, preleasing activity has supported the theory. Compared to the same time last year, preleasing is only down 7% to 10%, rather nominal considering the severity of the public health crisis. "With most universities announcing that they will be open in the fall, this will be a robust summer leasing season," said Pierce, adding that leasing activity could bleed into September as students secure housing later than usual.
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