It’s got space. It’s got privacy. It’s got kumbaya vibes for groups who already know they want to live together. Even the word “cottage” elicits a quaint, calm, satisfying reaction.
That’s what many students are getting when they opt for cottage-style housing.
“Students really enjoy having their own ‘space’ with a stand-alone home within a community, while still getting access to all of the amenities that a traditional apartment complex offers,” says Chris Murray, head of asset management at Timberline Real Estate Ventures.
From colorful façades and front porches to private bedrooms and expansive shared amenities, cottage-style housing stands out as a unique offering all its own. In a way, it’s the best of both worlds, offering a hybrid of personal space and community-driven living that’s conveniently linked to campus, often through transportation.
“While cottage product is generally slightly further from campus and entertainment areas, the product type offers students the most comparable living quality while also providing larger amenity sets than pedestrian mid- and high-rise communities,” explains Nate Nearhood, director of investments and student housing platform lead at Monument Square Investment Group (MSIG). “They offer more space, privacy and a residential feel that today’s students are actively seeking, especially post-COVID. From an investor’s standpoint, it delivers a compelling rent point — especially on a per-square-foot basis — and durable demand.”
This begs the question: if cottage-style living is so great, why isn’t everyone leasing it? Or building it?
Maybe they should be.
“What makes it even more attractive is how little cottage product has been delivered over the last five years,” Nearhood adds.
Attracting Students
“Cramped quarters” is a phrase practically synonymous with student housing, regardless of how long ago one graduated. With that in mind, it’s easy to see the allure of a housing option that doesn’t involve bunkbeds stacked to the ceiling.
“With the luxury of a larger footprint, these communities offer extensive amenities,” says Casey Schaefer, senior vice president of CBRE and co-lead of the firm’s national student housing team. “Residents enjoy space for their pets, while the design provides a valued level of privacy with second- or third-story bedrooms that don’t share walls.”
In some instances, this size differential can be significant for students. High-rise and mid-rise housing units average about 920 square feet, according to RealPage Analytics. The average size of a college dorm room in the U.S. typically ranges between 120 and 150 square feet (but varies based on the institution and room type). Meanwhile, cottage-style housing units clock in around 1,200 square feet.
Jason Doornbos, chief development officer at Landmark Properties, says this extra space can’t be overlooked.
“For students, these developments are appealing because they generally offer larger units with more space and often include access to a yard,” he says. “Cottage-style housing is an especially attractive option in markets where students highly value large, open amenity spaces.”
And those markets exist in droves — as long as you know where to look, Nearhood adds.
“Given its lifestyle benefits for students and broader amenity packages, we do believe that demand is the strongest in warmer climates in the Sunbelt, particularly at Tier I universities with a strong Greek life presence,” he says. “Suburban or secondary markets near larger universities often provide the best opportunities for this product type. Make sure to look at student demographics and lifestyle trends — students today are increasingly seeking more space, privacy and a sense of community.”
College House’s numbers confirm this trend. About 57 percent of the 113,000-plus cottage-style beds nationwide are located in the Southeast, with another 19 percent in the Southwest.
And it’s not just Greek life drawn to the tight-knit atmosphere of cottage-style living.
“We tend to see more demand for this style of housing from larger groups on campus — Greek life, athletic groups and other various clubs in the community,” Murray says. “The benefit of having private cottages with large floor plans and their own outdoor living space, while still having access to the clubhouse amenities has historically been very appealing to these groups as it enables them to rent several cottages and live with their respective group members.”
In addition to weather and group status, Schaefer notes there’s one more factor that can make the cottage product excel.
“Markets where rents don’t support mid- or high-rise construction costs,” he says. “Sometimes these projects are overlooked because they aren’t typically walkable to campus. As a result, investors can often achieve higher yields with some of the stronger-performing assets in their respective markets.”
Attracting Investors
As it stands today, cottage-style product comprises about 10 percent of total purpose-built student housing beds nationally, according to Schaefer.
Austin Repetto, principal at TSB Realty, appreciates this product for its uniqueness.
“For developers and investors, cottage-style offers an opportunity to differentiate their product or portfolio from the newer mid-rise or high-rise product developed adjacent to campus,” he says. “In some cases, cottage-style is the best point of entry to a competitive market or a way to find value beyond the barrier of entry associated with pedestrian sites.”
Separating oneself from other market offerings through larger units and more comprehensive amenity packages creates a competitive advantage that drives investor interest, Schaefer argues. The ability to differentiate and maintain this unique market position has, in some ways, become easier as supply hasn’t kept up with demand.
The average annual delivery of cottage-style beds was 6,089 between 2010 and 2021, according to College House. This figure plummeted to 758 beds between 2022 and 2025, creating an average annual decline of more than 87 percent.
“With a heightened focus on urban product in recent years, development of cottage product has slowed considerably compared to pre-COVID-19 levels,” Schaefer explains. “There are currently more than 9,500 cottage-style beds in the national pipeline, though the number that will be capitalized and delivered remains to be seen.”
Investor appetite for existing product is also evident. Repetto notes that more than 20 cottage-style properties have traded hands over the past two years.
TSB Realty was involved in the sale of the Cottages of College Station near Texas A&M to Clarion Partners, as well as the Retreat at Tampa near the University of South Florida to Landmark. It’s currently listing two cottage-style properties for sale — the Heights (Texas A&M) and the Cottages at Lake Tamaha near the University of Alabama.
“We’re extremely optimistic about the prospects for each of these properties,” Repetto adds.
Schaefer’s team has sold five cottage-style communities since last year, the most recent being the Cottages of San Marcos near Texas State University to Timberline and Ares (on behalf of Mapletree Investments).
“This 2014 vintage asset was well-positioned for a capital infusion and had a strong performance history in a market benefiting from growing enrollment at Texas State,” he adds.
CBRE is currently listing the Junction at College Station, which features a mix of cottage and townhome units near Texas A&M. It is 99.9 percent occupied and fully pre-leased for the 2025-2026 academic year, achieving 5.4 percent year-over-year rent growth.
Similarly strong stats can be found throughout the cottage-style market. Repetto notes that both the Retreat at Corvallis near Oregon State and the Heights at College Station (Texas A&M) are also fully leased and pre-leased for the same period. The Retreat at Corvallis is achieving more than 7 percent year-over-year rental rate growth, while the Heights at College Station is above 5 percent.
“They’re both excellent examples of how this product type can succeed in certain markets,” Repetto says.
Monument Square is seeing similarly strong stats within the cottage sector. It’s one of the drivers that’s kept the firm active, with MSIG’s most recent cottage acquisitions being College Town Oxford at Ole Miss and Cottage Row Stillwater at Oklahoma State.
“Both were amongst the market leaders in pre-lease velocity and rent growth,” Nearhood says. “They’re assets that we have an extremely high conviction in.”
MSIG’s highest-conviction strategy right now centers on core-plus, cottage-style assets in Power 4 Sunbelt markets. The firm is especially drawn to 2010-vintage cottage communities, which offer unit sizes that Nearhood believes are unlikely to be replicated in the current environment.
“This overall strategy is similar to our preference for build-to-rent communities over garden with respect to conventional apartments,” he adds. “The primary difference is that BTR is seeing increasing supply and cottage-style student housing is seeing less supply.”
Attracting the Right Party
It’s not just the supply that’s limited…the number of active investors in the cottage space is, too.
“Investor appetite is slightly lower simply because certain investors will only purchase properties within a minimum distance to campus, and that eliminates the cottage-style product,” Repetto explains.
Proximity to campus can be a challenge for some investors.
“Cottage-style developments often require larger sites, leading to locations that may not be as pedestrian-friendly to campus as some denser housing types,” Doornbos says.
He notes that this type of product tends to excel around college campuses where students are accustomed to using transportation to get to and from school. Plus, the horizontal layout of cottage product can make finding and acquiring a site difficult and costly. Oftentimes, there are complex zoning or entitlement processes involved.
These challenges can be addressed, Doornbos says, through strategic land acquisition, oftentimes farther from the core campus but with excellent transportation links. Or through creative site planning.
“This could potentially include some varied density on the site if zoning allows,” he continues. “We’re also seeing a trend toward reducing dedicated parking spaces per unit, reflecting a broader shift among students toward alternative transportation methods.”
He’s also witnessed cottage-style housing design become more efficient. This includes fewer stand-alone cottage structures. In their place are clusters of cottages or townhomes that add to density while still providing more space than a resident would find in a garden- or urban-style development.
Nearhood understands where this trend is going. He appreciates that, yes, certain student demographics and lifestyle trends show there’s a cohort that desires more space, privacy and a sense of community. But he also appreciates that investors must balance those desires with operational efficiency.
“The horizontal layout and lower-density design can result in higher construction and operational costs compared to more traditional multi-story buildings,” he says. “General operating costs, particularly turnover and R&M (repairs and maintenance), can be materially higher per bed than more dense assets given the overall square footage of the properties.”
Schaefer notes that the difference in long-term maintenance costs compared to other product types is a key aspect that many investors underestimate when considering cottage-style housing. Of particular note is the high number of roofs, siding, windows and paint needed to maintain this product. This requires a higher annual replacement reserve.
For these reasons, Murray views maintenance and management as two of the biggest considerations when investing in cottage product.
“We have strong on-site management and enforce a good preventative maintenance program, imploring the on-site team to regularly walk the property,” he says. “When managing a cottage-style product, it is essential to budget for the additional maintenance needed to maintain this style of product and also account for the additional wear and tear the units will endure from having more residents share one common space.”
While these costs and concerns are real, they’re not necessarily reason enough to overlook this product. At least, not when a compelling value proposition is present. One that offers the chance at higher rent premiums, differentiated design and strong leasing velocity.
“One myth I’d like to dispel is that these projects are always more expensive to build and operate,” Nearhood says. “While the land and construction costs can be higher upfront, these properties can command premium rents and perform well long-term, especially with the right mix of amenities.”
His advice? Budget appropriately for deferred maintenance and replacement reserves as these costs can add up over time. This is especially pertinent if the asset has multiple buildings and high turnover costs.
Those who find a groove within the niche — and favorable entry terms — may find that these concerns (and costs) aren’t as big as they seem.
“Initially, when the first cottage-style properties were delivered 15 years ago, investors were concerned the operating expenses would be significantly higher than other student housing properties due to the number of separate buildings and overall acreage of the property,” Repetto adds. “But after monitoring years of operation at multiple properties throughout the country, this is no longer a concern as the operational history speaks for itself.”
Turns out, the biggest thing about cottage-style housing might not be the square footage; it’s the staying power.
—Nellie Day
This article was originally published in the May/June 2025 issue of Student Housing Business magazine.