- Private developers are expected to provide just 26,000 new student housing beds near universities across the country by fall 2022, a decline from the 40,000 to 50,000 pace seen in the 2010s, according to the data firm. and RealPage analytics.
- Of the 175 colleges and universities tracked by RealPage, 43 will receive new student housing inventory in fall 2022. The University of Washington tops the list with 2,116 new beds expected, followed by Virginia Tech with 1,920, Indiana University with 1,570 and Clemson University with 1,396. Broward College’s Central Campus in Davie, Fla., ranks last with 96 beds among schools with new deliveries.
- “EThe impact of the pandemic on permits and funding, coupled with other challenges…has resulted in decreased construction at many schools,” Carl Whitaker, director of research and analytics, market analysis at RealPage, told Multifamily Dive. More than 100 schools will not see new beds this year, in line with normal conditions for the student housing industry, Whitaker said.
Overview of the dive:
Whitaker said some of the reasons for the slowdown now stem from difficult comparisons with the frenetic pace of student housing during the 2010s. During this period, many the most sought-after land for the construction of new properties near major schools has been snapped up. Growth in the college-age cohort is also much slower today compared to its peak in the early to mid-2010s.
But Whitaker’s outlook isn’t all bleak. For instance, in 2023, the pace of delivery should improve slightly to 31,000 beds, he said.
This increase will be marked by a surge in new developments around urban schools in 2023, including the Georgia Institute of Technology, which is expected to provide 2,630 new beds this fall; the University of Texas at Austin, planned for 1,840 new beds; and the University of Washington, with 1,510 new beds expected. He attributed the growth to a rebound from lower demand associated with the COVID-19 pandemic.
“[These challenges] likely led to developers hitting the pause button on new properties in 2021 and 2022,” Whitaker said. “But as the fundamentals have improved, it seems that the appetite for development has also improved.
Many of the top schools for new student housing serve large student populations in high-growth areas, such as the Sun Belt, Whitaker said. For example, the Georgia Institute of Technology is expected to receive more than 3,000 new beds by 2023, while the University of Florida and the University of Texas at Austin will each add more than a thousand new beds this year and the ‘next year.
Some of the top schools for deliveries in 2022, including Virginia Tech and Clemson, are expected to see significantly fewer new deliveries in 2023. This, according to Whitaker, is the norm for the student housing market.
|Name of the university||Fall 2022 student bed deliveries|
|1. University of Washington||2,116|
|2. Virginia Polytechnic Institute and State University (Virginia Tech)||1,920|
|3. Indiana University||1,570|
|4. Clemson University||1,396|
|5. University of Maryland||1,274|
|6. University of Florida||1,147|
|7. University of Michigan||1,103|
|8. University of Texas at Austin||1,039|
|9. University of South Florida||891|
|10. Auburn University||889|
|11. Northern Arizona University||854|
|12. George Mason University||825|
|13. University of Georgia||806|
|14. University of North Carolina – Charlotte||746|
|15. Georgia State University||741|
SOURCE: Real Page
The state of student life
The average rent per bed in private student housing costs about $860 per month, according to data from RealPage. However, just like conventional apartment rents, the average price per bed varies widely by state, ranging from $2,040 in New York to $471 in Wyoming. States with large student populations, such as Texas, Florida, and Arizona, sit near the national average in the $900s.
The average unit size is approximately 920 square feet, with an average of 1.8 beds per unit. According to Julia Bunch, property writer at RealPage, student housing in Mississippi, Utah, and Hawaii tends to have more beds than average, while Vermont, Connecticut, and Washington, DC, have fewer. Southern states tend to have larger than average units, while the northeast and west have smaller units.
While deliveries are slowing compared to the historical average, the silver lining is the increasing pace of pre-letting at many schools. Rental performance for fall 2022 got ahead of the past two years, when the COVID-19 pandemic and subsequent shift to remote learning hampered occupancy rates on many campuses. Almost 70.9% of student accommodation beds are pre-let in April 2022, an increase of almost 12% compared to April 2021.
More than 30 campuses saw pre-rental activity for September 2022 increase by more than 20% year-over-year. The most improved include West Coast schools, some large schools in Arizona and Colorado, and urban campuses like Ohio State University and the University of Texas at Austin.
Cleveland State University leads the pack with a 98% increase in pre-lease, from no units rented in May 2021 to 98% rented in May 2022. University of Southern California comes in second position, rising from 30.9% pre-letting in May 2021 to 87.9% in 2022.
“Not only is fall 2022 well ahead of fall 2020 and fall 2021, but this year’s May prelet rate across the country is at its highest level on record,” Whitaker said. . “All told, this year has a lot of potential to end up with the highest occupancy rate to start the school year since RealPage started tracking the industry about a decade ago.”