Student housing pre-leasing in August outpaced the same month last year by 200 basis points to reach 93.7%. This also exceeds final fall occupancy levels reported in September 2024, according to Yardi Matrix’s September national student housing report.
Although overall pre-leasing is ahead for most schools tracked by Yardi, some of the largest student housing markets are behind last year’s pace, including Purdue, Georgia Tech, Arizona, Michigan and Texas A&M. All of these schools are lagging by 3.5%. The report noted that most of these schools have significant supply under construction.
Thirty-six of Yardi’s tracked schools were more than 99% pre-leased as of August, up from 25 markets last year. Florida Atlantic, Cal-State-Fullerton, UCLA and San Jose State were all 100% pre-leased. Meanwhile, 21 schools were less than 85% pre-leased, a noticeable improvement from 35 in August 2024. Pre-leasing at 17 universities was 10% or more below last year’s occupancy levels. These included mostly tertiary state and private schools with fewer student properties, said the report.
Rent growth has been slow or decelerating during the past few months despite stronger pre-leasing trends. Average rent was $903 per bed in August, up 1.1% from the same period last year, but down 1.7% from a peak of $919 per bed in March. Rent growth has averaged 2.7% since October 2024, a notable drop from 5.7% growth during the 2023-2024 leasing season and 6.9% growth in 2022-2023. New supply has impacted rent growth, especially in markets like Tennessee, Arizona, Arkansas, Clemson and Central Florida, according to Yardi Matrix.
Although rent growth broadly decelerated across the country, some regions posted notably stronger increases as the pre-leasing season progressed, led by Florida, where August rents were up 8.4% compared with a decline of 0.5% at the start of the leasing season. Minnesota and the University of Washington also posted increases.
However, other markets followed the national trajectory. Arizona, for example, saw rent growth fall from an average of 10% in October through December to -8.3% in August. North Texas dropped from 11.5% during the previous leasing season to 8% growth to start this year’s leasing season and now has flipped into negative territory at -6.7%.
Student housing capital markets have been active this year, with 71 investment sales so far. This is behind last year’s pace of 86 properties sold at the same point last year, but the report noted there have been few large portfolio sales this year.
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