Rehabs and renovations are a big trend in today’s student housing market. That’s because many properties developed around 10 years ago, when purpose-built off-campus student housing began getting traction, are now primed for a renovation.
This will be an essential strategy for many owners/investor, asserts Caleb Marten of KeyBank Real Estate Capital.
Overall investment activity in the market remains strong, heightening competition in most markets across the U.S. For those owners who want to maintain strong occupancy and rental rates, it’s vital to invest in their properties to differentiate themselves from the competition, adds Marten.
The crowded field is causing some investors to exit the sector completely, though Marten notes these are mostly multifamily operators who jumped into student housing when they could secure a 25 to 50 basis point premium on cap rates. But as long as assumptions for rent growth and occupancy remain consistent, Marten believes most owners will fare fine as long as they have a willingness to adapt.
for more insights from Marten.