Berkadia: Student Housing Operating Fundamentals Strong

(Image courtesy Berkadia)

Berkadia, New York, in its 2023 U.S. Student Housing Preleasing Report found student housing operating fundamentals are among the strongest in the commercial real estate sector, with the fall 2023 lease-up cycle the fastest on record.

“With new asset deliveries still below pre-COVID-19-pandemic levels and Tier I universities enjoying robust enrollment growth, operating fundamentals will only continue to strengthen,” Berkadia predicted.

Average rent per bed was $851, an 8.8% increase from June 2022. Overall, the sector had an 87.1% prelease rate, up 90 basis points annually.

By distance to campus, less than half a mile saw $919 rent per bed, an 8.8% increase from June 2022, with an 88% prelease rate. Half a mile to 1.5 miles from campus was at $732 rent per bed, a 9.4% increase from June 2022, with an 85.8% prelease rate. More than 1.5 miles from campus was $690 rent per bed, up 8% from June 2022, with an 83.9% prelease rate (up a notable 470 basis points annually).

On a regional basis, the Rocky Mountain region saw the highest year-over-year jump in rent per bed, at 12.7%, to an average of $870. The lowest increase was in the Northeast, with a year-over-year rise of 4.7% to an average of $1,025.

The highest prelease rate was also in the Rocky Mountain region, at 89%. The lowest prelease rate was on the West Coast at 84.4%.