Ryan Lang, head of Newmark’s student housing team, brings extensive experience with institutional, public and private investors to the table. Despite initial concerns during the pandemic that remote learning would render student housing obsolete, Lang has seen a strong rebound in this market segment. In an interview with ApartmentBuildings.com , he discusses the current state of the market and offers advice for inexperienced investors.
Q: How did the pandemic affect student housing?
A: Initially, there was a lot of uncertainty about how universities would handle remote learning and enrollment was down. This led to decreased interest from institutional investors in this sector. However, some savvy investors saw potential in investing during this time when prices were low and have been rewarded as fundamentals have bounced back.
Q: How does current demand compare to historic highs?
A: The 2023 academic year saw record-high rents and pre-leasing levels for student housing properties across the country. While we may not be at those same levels currently due to COVID-related disruptions, we are still well above pre-pandemic levels in terms of occupancy rates and rental rates.
Q: How does this compare to other multifamily markets?
A: Student housing is performing exceptionally well compared to conventional multifamily markets where rents are mostly flat nationwide. In contrast, effective rent growth for student housing is high single digits on average across all regions.
Q: Is there variation within different tiers or types of schools?
A : There is some variation between Tier One (highly sought-after) schools versus smaller institutions with less name recognition but overall performance has been strong among major public universities as well as Ivy League schools.
Q : Are you seeing new players entering into investments or mainly experienced ones ?
A : Both experienced players continue their involvement while new equity enters into joint ventures seeking opportunities through recapitalizations .
Q : What advice do you have for inexperienced investor s ?
A :
Find a great partner who understands operational differences between traditional multifamily and student housing. This will make all the difference in a successful investment.
In summary, Ryan Lang of Newmark’s student housing team has seen a strong rebound in this market segment despite initial concerns during the pandemic. Student housing demand remains elevated compared to pre-pandemic levels and is outperforming traditional multifamily markets. While there may be some variation among different tiers or types of schools, overall performance has been strong across major universities and Ivy League institutions. For inexperienced investors, it is important to find an experienced partner who understands the unique operational differences of investing in student housing properties.
