Investor interest in student housing continues as this falls new supply has been easily absorbed.
From the third quarter of 2015 through the second quarter of 2016, investors bought $8.4 billion in student housing properties, according to data from research firm Real Capital Analytics (RCA). In the prior year, investors acquired student housing communities worth $5.4 million.
This fall, about 47,700 new beds hit the student housing market, according to data from Axiometrics. By June, preleasing was at an average 83.4 percent, up 15 basis points from last year. Effective rents for the 2016-2017 leasing season increased by 2.3 percent, up slightly from the 2.0 percent increase in 2015-2016.
Low interest rates have attracted an increasing number of institutional and international investors. Cross-border buyers have jumped into the market in a big way, Sean Kane, senior manager of analytics for RCA, told National Real Estate Investor.