Student Housing: Off-Campus Student Housing Presents Much-Needed Stability For Commercial Investors

via Real Estate Journal Online.com

Many commercial real estate investors are reeling right now from miscalculations made in past years about what the future would hold in commercial real estate. Senior-living developers are working on innovative solutions to turn struggling communities that were predicted to fill with baby-boomers into viable businesses, and while everyone agrees that a double-dip is unlikely, many commercial analysts are having trouble determining just when the market will overcome high unemployment and massive uncertainty to really bounce back. So it’s not particularly surprising that a niche of commercial investing that offers “recession resistant” payoffs and may actually grow in the face of budget cuts is starting to gain attention[1]. This specialized area of growth will not work for every city, but its proponents recommend getting in where you can because student housing is the next big thing in commercial real estate.

Here are several trends that Charlotte-based real estate developer Ted Rollins, who owns Campus Crest, a now-public company generating strong results ($382 million in the initial public offering), believes indicate that student housing is a great way to stay involved in commercial real estate and in new construction during difficult times:

1. College enrollment is up and off-campus housing is still relatively new. The National Multi Housing Council (NMHC) called the business “recession-resistant.”

2. Campus Crest communities reported in a recent op-ed piece in the Coloradoan that occupancy is right around 90 percent in its existing communities[2].

3. More foreigners are enrolling in U.S. universities, which increases the need for student housing.

4. Students are taking longer to graduate, increasing the need for student housing.

5. Budget cuts are likely to compel states to turn to private developers in order to create adequate volumes of student housing.

Of course, Campus Crest is just one developer, and admittedly they have faced some serious criticism for the way that they lease and run their operations and apartment complexes. However, regardless of this particular developer’s issues (which Rollins adamantly contests), the argument for student housing is looking good. Is this an area in which you would be interested in investing?

[1] http://www.kansascity.com/2011/02/17/2662014/student-housing-developer-flourishes.html

[2] http://www.coloradoan.com/article/20110217/OPINION04/102170336

[rejournalonline.com]

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