He joined the firm Wednesday after a few years buildingrelationships with national student housing developers and ownersas a senior housing investment specialist with Marcus &Millichap. The company could not be reached for comment about hisdeparture. "The affiliation with the debt markets will really helpmy investors," Kelly says.

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Wall Street, which has taken a beating the last few days, hasbeen very comfortable with student housing, he says. "It's reallybeen the hot niche of multifamily, in the past 10 years it's beensought after more and more every year," Kelly tells GlobeSt.com."Right now it's perceived as insulated from the economic swings,some have even called it recession proof."

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He says he has his ideas why student housing has become sopopular, and college applications have increased. "As the economygoes south, that's just basic, more people tend to try to get theirdegrees. Then you have the '"Echo Boomers,' the children of theBaby Boomers, where you're seeing that bell-curve of population allover again. The number of college-age students is going to go updramatically in the next five years."

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However, he says colleges have also been working harder toattract students, and one of the methods has been raising the baron amenities in student housing. "You just can't compare it to adecade or more ago, what they have today," Kelly says. "I had alisting a little while back in the Midwest that had a resort-stylepool, full indoor basketball court, fitness facility, computer lab,study rooms, game rooms, a tanning facility and hot tub, even amovie theater. And that's getting pretty common."

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The crowd of owners seeking student housing, or to develop newor infill locations, just keeps getting bigger every year, he says.American Campus Communities and Education Realty Trust are the twomain REITs that focus on the product type, but there are manydevelopers, especially multifamily companies, that have been tryingto break into the market, he says. "I had a deal close justrecently (while he was still at Marcus & Millichap), the BardTownhouses serving the small Shippensburg, PA local college, thathad eight offers from across the nation. The 173-unit propertyclosed at just less than $20 million…it wasn't a notable property,but the amount of interest was phenomenal."

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New blood is also finding new ways to attack the market, hesays. For example, owners are now starting to lease per bed,instead of per unit. "It's a little more strenuous on management,but it's also a little bit of a premium on a per-bed lease," hesays. Also, companies are more aggressively tackling the olderclass B and C product with renovation and updates, creating acompeting product that may be closer to the university than newdevelopment, Kelly says. "There are certain groups that targetthese properties, and they've been doing very well," he says.

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