Yardi Matrix: Student Housing Sector Continues to Outperform

(Image courtesy Yardi Matrix)

Yardi Matrix, Santa Barbara, Calif., reported student housing preleasing for the fall semester reached near-record highs in July, positioning the sector well to be able to weather a potential recession.

As of July, 90.9% of off-campus beds at universities Yardi Matrix analyzed (known as Yardi 200 universities) were pre-leased for the fall term, up 4.6% from June and flat with last year.

However, preleasing has slowed a bit from rapid growth at the beginning of the leasing season, and month-over-month rent growth has decelerated.

Still, Yardi Matrix projects fall occupancy will be around last year’s 96%, and rent growth is up 7.1% year-over-year.

Yardi Matrix also noted that interest rates have taken their toll on investment sales. The number of beds sold in the first six months of 2023 was down 73.1% year-over-year, and the price per bed was down 10% year-over-year.

Overall, Yardi Matrix believes the sector has strong and consistent fundamentals, expecting 40,000 new beds to deliver in fall 2023 among the universities analyzed, up from 27,000 last year.

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.