Student Housing Rent-Per-Bed at All-Time High
June was the fifth consecutive month of annual rent growth of over 7%.
Student housing has been largely unaffected by the recent economic uncertainty – certainly less so than most asset classes – according to the latest National Student Housing Report from Yardi® Matrix.
The exemplary performance for the fall 2023 school year, including an all-time high in average monthly rent, should remain intact, the report said.
As of June, 86.6% of beds at Yardi 200 universities were preleased for the upcoming fall term, a 5.2% increase from the prior month and a slight 0.4% increase over last year.
June was the fifth consecutive month of annual rent growth of over 7% at Yardi 200 universities, at 7.2%.
“Given that 2022 held the previous rent record for student housing, obtaining more than 7% growth of the previous record-high numbers is exceptional,” Yardi Matrix said.
The average rent per bed at Yardi 200 universities was $846 at quarter-end, an all-time high.
Matrix analysts said that “under the surface of solid overall fundamentals at the Yardi 200 level is mixed performance at individual schools, as some universities are doing exceptionally well while others fall short. Performance at the university level is mainly correlated to local supply-and-demand dynamics rather than higher-level trends.”
However, the transaction volume through Q2 was down 73% from the same time last year, “a stark reminder of the weakening economic sentiment and the looming recession expected later this year” albeit a mild one, the report indicated.
The off-campus, dedicated student housing development pipeline has expanded by approximately 28,000 bedrooms since the start of the year.
Three universities had more than 20% growth in preleasing from last year: Ohio University, the University of Southern Mississippi, and the University of Mississippi.
However, rent growth declined for preleasing at Ohio University and the University of Southern Mississippi during preleasing.
The University of Mississippi was a standout performer, with annual preleasing growth of 23.4% and annual rent growth of 12%.
Louisiana Tech University and Boise State were overall underperformers.
The student housing data set includes over 2,000 universities and colleges nationwide, including the top 200 investment-grade universities across all major collegiate conferences. Known as the “Yardi 200,” it includes all Power 5 conferences as well as Carnegie R1 and R2 universities.