Investor appetite for student housing assets appears to have waned during the COVID-19 pandemic, as investment volume in the asset class remains 12% below pre-crisis levels. 

While deal flow slumped considerably during the height of the pandemic, "the year 2020 eventually ended on a high," Real Capital Analytics' Haley Crimmins writes in a recent analysis of the sector. Of note: QuadReal Property's acquisition of a 50% stake in CA Student Living's portfolio. (Also of note: the $3 billion in portfolio deal volume achieved in the fourth quarter of last year, which constituted the strongest level in any given quarter for deals of that structure.)

As the summer of 2021 neared, cap rates inched up to 5.5% by Q2 – a number that's 20 basis points higher than record lows posted in the third quarter of 2020. Cap rates on the outskirts of large universities and outside of major metros hit a low of 4.9% in the second quarter.