Landmark, ADIA Extend Strong Partnership, Focus on Student Housing

Student housing continues to demonstrate, in all market cycles, a resilient asset class with strong fundamentals, according to Landmark Properties, which this week announced a $2 billion build-to-core venture with the Abu Dhabi Investment Authority (ADIA).

It’s the second venture this year, the two long-standing partners having set a $1 billion value-add student housing platform in March.

Landmark’s Integrated Operations Thriving

Landmark has thrived by having integrated ownership, development, general contracting, property management and investment management within its portfolio.

“It allows for development projects to be seamlessly planned and executed, creating value for the properties, residents, and investors,” the company said in a release.

Wes Rogers, President and CEO of Landmark Properties, said in prepared remarks, “The ability to accurately estimate and better control costs with our in-house general contractor is incredibly valuable in this inflationary environment with supply chain disruptions.

“Our team has delivered billions worth of student housing properties on time and under budget during Covid.”

Enrollment Bouncing Back ‘Spectacularly’

Moody’s this month issued a report showing that the student housing – one entirely reliant on student enrollment – “bounced back spectacularly” in 2021 with vacancies reaching record lows.

It expects enrollment growth in the Southwest and South Atlantic regions to build as people migrate to the Sunbelt, pointing to Georgia State (56.9%) and the University of Texas at Arlington (37.1) as two of only five schools that have seen enrollment increase for five consecutive years.

Q2 a Record-Breaker

The student housing industry continued to break records in the second quarter of 2022, according to Yardi Matrix.

An 87.2% preleasing rate and rent growth of 5.0% in June was the highest seen for Yardi 200 universities, and transaction activity remains elevated despite rising interest rates. “Confidence in the sector abounds as the fall semester approaches,” Yardi’s Doug Ressler tells GlobeSt.com.

As of June, Yardi 200 universities were 87.2% preleased for the upcoming fall term. This is 10.1% higher than last year and 7.7% higher than pre-pandemic 2019. With a few months to go in the leasing season, Yardi expects the 200 universities it tracks to start the fall term with record-breaking occupancy, Ressler said.

Annual rent growth of 5.0% is unprecedented in the student housing industry and is likely supported by the rising tide of multifamily rent growth, which is also at record levels. Compared to multifamily rent growth of 13.7% in June, student housing rents could see further growth to come, particularly for universities located in cities with a prominent shadow market.