As Enrollments Soar, Recession-Proof Investment Fits Bill

Rio West at UT Austin is attractive to institutional buyers.

AUSTIN, TX—Many universities struggle to keep pace with demand due to tremendous enrollment growth. Investment in student housing continues to offer long-term stability, attractive risk-adjusted returns, and safe diversification in respect to other asset classes. This is evident by the continued evolution and influx of new investors that entered the student housing space in 2015, making the asset class a mainstay in most real estate investment portfolios.

As a result, the student housing industry continued its rapid ascension into a viable, mainstream real estate sector in 2015. Acquisitions of investment-grade assets ($10 million-plus) soared to an all-time high of approximately $4.8 billion, according to ARA Newmark. This represents an increase of nearly 65.2% from 2014’s $2.92 billion and 26.1% from the previous record of $3.83 billion set in 2012. This volume was largely driven by several portfolio transactions that took place in 2015.