Student Housing Rents Approach Record Highs: Report
The average cost of an off-campus student housing bed in the U.S. is nearly $850 per month.
By Brian Pascus October 24, 2023 3:36 pm
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If the affordability of college tuition is becoming an issue, then just wait until the cost of room and board comes up.
Rents for off-campus student housing across the U.S. are near all-time highs, according to Yardi Matrix, a commercial real estate data analytics firm. The average cost to rent a bed in off-campus student housing is nearly $846 per month, while year-over-year rent growth in the sector is up more than 6 percent.
Yardi Matrix anticipates “record-high rents” for the 2023-24 school year for privately operated housing complexes aimed at college students.
“Rent growth in the student housing sector continues to be the envy of the commercial real estate industry,” said the Yardi Matrix national student housing report. The survey did not cover the cost of housing in on-campus, college-run student dormitories.
The Yardi Matrix studied nearly 900,000 beds across neighborhoods near 200 universities. All data reflected off-campus, privately held units solely built for student housing
The firm argued that much of price increases have come on account of pre-leasing, the process of reserving units and leasing them before they come to market, allowing them greater control over rent prices.
“Student housing rent growth during the leasing season tracked pre-leasing, with operators pushing rents early on in response to rapid pre-leasing,” said the report.
Just over 95 percent of student housing beds among the 200 universities covered in the report were pre-leased. September 2023 pre-leasing rates were higher than 2019, 2020 and 2021, with 56 percent of markets pre-leasing 99 percent of their beds, according to Yardi Matrix.
The markets that saw the largest year-over-year growth of pre-leased student housing properties include University of Southern Mississippi (19.1 percent), University of South Alabama (13.2 percent) and Ohio University (12.8 percent).
Perhaps most significantly, a whopping 33 markets saw double-digit rent growth as of September 2023, including some of the more well-known universities in the nation: Purdue, Arizona State, Clemson and University of Georgia, which all boast total undergraduate enrollments between 22,000 and 65,000 students.
Brian Pascus can be reached at bpascus@commercialobserver.com
