The student housing industry has long been lauded for its recession resilience as an asset class. The challenges presented by COVID-19 have been adeptly met by the industry, which quickly formed a collaborative and flexible frontline with the ultimate goal of allowing students to safely continue to pursue their education. As the months have passed, it has been proven that student housing is not just recession resilient – it is pandemic resilient, as well.
Bill Bayless, CEO of American Campus Communities, kicked off the NMHC/InterFace Student Housing Conference on Monday, Oct. 19, with a keynote address focused on looking back at how the industry has weathered the pandemic and where we’re headed in the future. Listening to Bayless, it’s impossible to see the sector’s outlook as anything but bright.
“What an eventful seven months we have had,” began Bayless. “When you look back pre-COVID in January and February, we really had tailwinds in the industry. Many of us were ahead in our lease-ups for fall 2020, we were all seeing rental rate growth near 2 percent to 3 percent and supply was down. We also had great equity flowing into the space, cap rates were down and valuations were up — the fundamentals for our business had never been stronger.”
“In March, with the emergence of COVID-19, we as an industry experienced a ‘black swan’ event that none of us could have ever contemplated or foreseen and the universities and higher education institutions that we serve were a large focal point,” he continued. “When universities and colleges transitioned to online learning in the spring — and in many cases, closed and asked students to leave their campuses — the investment community didn’t know what the future might look like for the first time in our industry.”
Prior to the start of the pandemic, the industry had benefitted from a booming investment market. “We all benefitted from stability of cash flows, recession resiliency and that coupon-clipping investment in industry that you could always count on,” he said. “We found ourselves dealing with whether online learning might replace the on-campus experience and whether or not the student housing sector would be subject to the volatility that was taking place in the office and hospitality sectors.”
While worries ran high at the start of the pandemic, the fall semester has proven that the on-campus experience will not be eclipsed by online learning. “When we talk about where we are and where we’re going, I think we can all breathe an incredible sigh of relief in terms of what has happened, how we have weathered the storm and where we are all headed together,” said Bayless. “ACC actually had a pick-up in occupancy during a time of the year when we never see a pick-up in occupancy. We gained over 1,000 resident move-ins in late March and throughout the month of April.”
“Our executive teams and our community and field staffs did an incredible job continuing to provide essential services to students across the U.S. while adopting to changing CDC guidelines,” continued Bayless. “As an industry, we can be so proud of the work our teams did on the frontline providing essential services.”
— Katie Sloan
Look for more insights from Bayless and continued conference coverage on studenthousingbusiness.com throughout the coming weeks.
Interested in hearing more from the industry for yourself? It’s not too late to register! The conference portal and all panel sessions will remain open and viewable until Thanksgiving. Click here for more information.