Student Housing residential rental real estate remains a bellwether investment and the COVID pandemic and varying levels of university-centric enrollment and occupancy instability, in many cases, proved to barely “shake” the values of student housing assets.
In what was already a highly competitive, low cap rate environment by the Summer of 2019 remained largely stable (with only minor losses) in 2020 and into 2021 and is poised for a rebound as we get further into 2021.
How does a student housing investor; developer or buyer, new or seasoned play in the space? Our experience at IBR has shown that highly discretionary PE/family office playing a bullish hand of cards is one route. Of course, not everyone enjoys that direct pipeline of cash and if you have access to PE (as many do), you are one of a slew of GP’s competing for the same dollar.
Talent – the most obvious and yet difficult solution to competitive advantage. This remains the old adage of “more players on the bench.” These are acquisitions of talented “players,” naturally. Of course, they need to be the best, most accomplished players, geographically and product-specific/differentiated players, and timely to join your team and hit the ground running.
Opportunity Cost – The financial cost and internal cost of commitment, time, and resources are just as high. Can you afford to not grow your portfolio whether you’ve just exited your prior investments, or you are a new firm to the space?
We’re always up for a discussion about your personal experience in the student housing industry, your options and to help you devise a plan for “what’s next.” Reach out to the team, here.