Construction in the student housing market is expected to stay strong in the coming months, according to a recent report by TH Real Estate.
In 2016, the sector generated $9 billion in investment, with more growth forecast as millennials pursue higher education in greater numbers than previous generations. However, economic recovery typically lowers enrollment slightly as more would-be students pursue jobs in the market.
- The real estate investment management company noted that state budget cuts to education could bolster the market as investors can create housing stock on or near campus to serve institutions that lack the funding to provide it themselves.
The TH Real Estate report aligns with the current activity around student housing developments across the U.S. In March, Armada Hoffler Properties announced plans to join Spandrel Development Partners to design and build two $100 million student-focused residential buildings one mile from the College of Charleston, in South Carolina.
In Florida, the University of Central Florida and the University of Miami received proposals for student housing projects near their respective campuses. UCF could soon see a Landmark Properties student apartment building that would add 750 rooms, while Miami's plans for a $100 million student housing project would deliver 1,100 beds along with a number of other on-site amenities.
While more millennials pursuing post-secondary education has been a boon for student housing development, the weakening ability of institutions to draw students to older, (often) more expensive on-campus offerings with relatively fewer amenities has given way to more opportunities for outside developers. In response, some universities are revamping on-campus student housing.
Growth potential in U.S. student housing has attracted foreign investors. The Beijing–based Grand China Fund, a real estate private equity fund management firm, and Austin, TX's Aspen Heights Partners together broke ground on a $60 million, 17-story student housing complex near the University of Texas at Austin's campus in late 2016. The project is expected to add 464 beds to the nearby campus community.
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