As the student housing market rebounded last year from a disappointing 2023, it has attracted growing interest from domestic and foreign investors.
Transaction volume in 2024 shot up to $8.5 billion, 43% more than in 2023 when transactions slumped by 71% from the previous year. “Investors were drawn to the sector’s strong fundamentals, including rising enrollment, resilient operations, and attractive yields,” stated Christopher Epp, managing director of investment sales for Walker & Dunlop, in the company’s 2025 student housing report.
The CRE firm expects this growth to continue in 2025 due to stabilized rates and growing enrollment, while $8 to $10 billion in loan maturities for apartment housing, including a substantial volume in student housing, are returning liquidity to the sector.
Recommended For You
Investors have also benefited from the fact that the 12-installment lease is now standard across the country. “This helps operators stabilize cash flow and minimize seasonal vacancies. As a result, properties with established 12-month lease structures are in higher demand from investors," the report noted.
Another positive is that institutional investors, including foreign capital, are expanding their presence in the market. Debt funds and life companies are also increasing their investment.
The report noted that Fannie Mae is re-emerging into the student housing finance space, increasing competition with Freddie Mac and improving financing options for borrowers.
At the same time, persistent supply constraints, caused by challenges developers have faced in securing equity and finance, are keeping occupancy levels high and driving further rent increases. “Capital stack structuring remains a major hurdle for new development, with capital markets prioritizing existing assets over ground-up projects,” W&D stated.
Demand remains strong, however, with 1.8x beds absorbed compared to deliveries in 2024. Occupancy stood at 93%, and rent growth was solid. The top 50 university markets averaged 1.15 students per available bed.
The Southeastern Conference (SEC) remains the most active conference for student housing investment, with the Big Ten gaining momentum as larger schools see record enrollment growth, especially in Power 5 universities. Some 62,000 beds were delivered in the South in 2024, and 117,000 beds were absorbed.
Indeed, the South was home to 15 of the top 20 transaction markets in the U.S. In contrast, students in the Northeast favored traditional residential homes.
“Transactional activity is most vigorous in markets with established student housing demand, enrollment growth, and limited new supply,” the report noted.
However, W&D said that there has been a shift in the type of student housing now getting built. Resort-style amenities like pools, fitness centers and entertainment spaces are on the way out. Students – and their parents – now look for functionality, convenience and affordability along with modern, high-quality facilities. They value well-designed private spaces that balance study and social life, technology-enabled environments, co-working areas, outdoor and communal areas and proximity to campus.
“Student housing has cemented itself as a resilient asset class, with rent growth consistently outperforming conventional multifamily housing,” the report summed up.
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
