Feb
23

Student Housing Market Snapshot from Real Capital Analytics

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Just $400 million in student housing properties traded in 2009 and comprised less than 3% of overall apartment market activity. Pricing of $113,000/unit was down 10% year-over-year, appreciably less than the 13% per-unit decline for all other apartment properties to an average $86,000/unit. Student housing sales volume topped $119 million in Q4’09, up 131% from the Q3’09 trough but still down 23% from Q4’08. Sellers are still achieving almost 93% of their asking price, up 80 bps from a year earlier.

Average cap rates for student housing properties for the 12-month period ended Dec. 31 increased 150 bps year-over-year, while caps for all other apartments rose just 72 bps. The Southeast had the most volume at just over $129 million for the past 12 months, while the Northeast continues to have no student housing sales activity.

The top 10% of student housing assets sold for $186,000/unit at a 6.2% cap, while the bottom 10% saw caps heading toward 12% and barely topped $67,000/unit. On average, the price-per-unit spread was greater for student housing assets than for other apartments.

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