Student Housing Matching Last Year’s Record Pace
Average rent per bed hit $895 in April, a 5.5% increase year-over-year.
The student housing sector continues its best leasing season yet, matching last year’s record pace. Although rent growth is moderating it remains well above average, according to the latest report from Yardi Matrix.
Tailwinds include a balance of supply and demand, modest levels of supply coming online, and enrollment growth occurring, especially at the primary state schools.
The report said that strong investor interest in the sector, particularly from new entrants and international capital, is promising for transactional activity, notably in the back half of 2024.
Some operators have noted the delay in FAFSA processing is causing a slowdown in preleasing pace recently, but preleasing reached 73.5% in April 2024, 50 basis points above April 2023.
Momentum has decelerated compared to recent months, but it remains above the pre-pandemic average.
Average rent per bed reached $895 in April 2024, a 5.5% increase year-over-year, and rent growth has averaged 6% this leasing season. Again, this is at a slower pace, but one above the historical averages.
Yardi Matrix forecasts 46,285 new beds to be delivered this year, an increase from 37,576 beds delivered in 2023 and near the peak years of 2013 and 2014. Development, in turn, will drop to “below average” in the next five years.
The 18 properties sold through April 30 match last year’s pace.
Preleasing for the 2024-2025 school year is trending more in line with last year, reaching 73.5% in April 2024 versus 73% in April 2023.
Top universities for preleasing include Ole Miss (100% leased), Kentucky (93.3%), Purdue (93%), and James Madison (92.5%).