Once viewed as an “outsider” in the multifamily business,student housing has moved to the head of the class, asinstitutional investors and developers—wary of the anemicconditions plaguing other commercial real estate sectors—arelooking to enter the recession-resilient market.

Over the years, student housing has evolved from anunsophisticated business with many off-campus, mom-and-popoperators to one that’s gaining institutional acceptance.Ever-increasing rents and record college enrollments are drivingdemand.

“Student housing has become a fast-growing asset class asinstitutional investors have become far more comfortable with thesector’s dynamics,” says Dorothy Jackman, a Clearwater, FL-basedmanaging director of Colliers International’s new National StudentHousing Group. “The cottage industry of 15 years ago has given wayto a far more institutionalized property type.” She points out thattwo of the best-performing REITs in the country last year werestudent housing companies.