Student Housing Construction Expected to Fall Next Year

Student housing development will likely slow in 2019. For the first time this cycle, development activity is expected to fall below 40,000 beds nationally, following what has been a very active development niche this cycle. The slow down, however, could be a sign of a restrained market, responding to demand needs and ample deliveries last year.

“Development activity peaked in 2013 and 2014 when 59,000 and 62,000 beds respectively were delivered to the market,” Frederick W. Pierce, IV, president and CEO of Pierce Education Properties, tells GlobeSt.com. “The pace of new construction slowed to about 40,000 beds completed in fall 2018 and deliveries in 2019 are forecasted below 40,000 beds for the first time since the end of the Great Recession in 2011.  A more moderated volume of new deliveries is welcome, as student housing is not immune to over-building, despite strong demographics.”

Since 2010, student housing development has been robust. “There has been very robust development activity in student housing,” explains Pierce. “Since 2010, supply of purpose-built beds in the AXIO 175 markets has increased 68% from about 450,000 in 2010 to just over 750,000 beds in 2017.”