Booming university/college enrollments nationally and locallyare triggering a need for class A shelter projects that have beenproducing average returns on costs of 10% to 20%. Buyers look forcapitalization rates in the 9% to 10% range. Profits are there forthe right project and the right investor/developer

For example, University of Central Florida (35,000 students) isbuilding 1,600 beds on campus with 800 already delivered for the2002-2003 school year. Off-campus housing is averaging 97%occupancy, except for Knight's Krossing properties which UCF tookover. Vacancies at Knight's Krossing are over 25%.

In Tallahassee, occupancy at Florida State University'son-campus student housing have been at or near 100% for the pasteight years, notes Standard & Poor's Corp., the New York-basedbond-rating company. "There is a very strong demand for on-campushousing" at FSU and "the expectation of continued solid demand"over the next five years at least, the S&P analysis notes.