Austin, Texas — Two of the many topics discussed at this year’s InterFace Student Housing conference in Austin, Texas, were pre-leasing velocity and rental rate growth ahead of the 2025-2026 academic year. So far, numbers in both categories are trending down after two years of double-digit rent growth and record-breaking pre-leasing velocity, leading many to wonder what the new industry standard will be.
But while rental rate growth is down and leasing is paced slower than in 2024, the industry is really seeing more of a return to historic norms prior to the COVID-19 pandemic, according to Casey Petersen, chief operating officer with Tailwind Group and moderator of the panel ‘A Reversion to the Mean? What’s Happening for 2025-2026 Leasing and Is It the New Norm or an Anomaly?’
“This year’s lease-up from both a velocity and rental rate perspective is more like it was four or five years ago, but it’s still a top 20 percent historical lease-up across the space,” Petersen began. “We’re seeing a bit of a reversion to the mean, but the mean is pretty darn good. And what we’ve been seeing over the past three years was outrageously good. So we’re reverting to what was and always has been a very sound and good business model.”
Jake Jarman, chief revenue officer with Redstone Residential, agreed, noting that the sector is really just reverting back to where it was prior to the pandemic. “In 2021 and 2022, we all looked like geniuses — we were able to lease faster than we’d ever been able to, and our rental rate increases were off the charts,” he said. “In 2023, we saw a little bit of a slowdown and what we’re seeing today is a return to pre-pandemic leasing velocities.”
One of the big findings noted by Jarman this year is that lead generation in the current environment requires a guerilla marketing and in-person approach. “As we talk about this cohort of students, which love the digital aspect, it’s also really important to understand the customer service piece,” he said.
“We can’ just throw an ad out on Facebook and generate leases,” Jarman continued. “The students who are freshmen this year were freshmen in high school during COVID-19 and their buying habits are completely different from previous high schoolers. We need to keep that in mind and approach them from an angle that fits their needs in order to generate leases. Generic digital marketing isn’t going to cut it.”
In keeping with this idea, KrisAnn Kizer, vice president of leasing and marketing with Pierce Education Properties, noted that one of the big trends this year is that students are physically touring and looking at properties more than ever before. “During the pandemic and the first few years following, students would look at one to three properties and make a decision,” She began. “We’re tracking our students and they’re now looking at six, seven or eight properties, going up and down streets because they want to see communities with their own eyes.”
Kizer believes this is due to genuine concern from renters that what they see online isn’t going to be reality. “Residents that are coming on tours at our properties are stopping residents walking through the building and asking if they like living there because they know how easily that data can be manipulated,” she said.
Kizer noted that students are also staying longer at one property than in years past. “Our renewal numbers are up,” she said. “I have multiple properties that are over 60 percent renewed, which is absolutely insane to me. We had very early renewal traffic, but we’re fighting a little bit harder for leases and for the new traffic at the end of the year in some of our markets that are a bit more saturated.”
Ashly Poyer, senior vice president of sales and marketing at PeakMade Real Estate, echoed this sentiment, noting that in-person tours are up 5 percent as an initial contact method, which the firm had not seen in a long time. She’s also seeing more leads come through phone calls, which she attributes to the use of voice AI to capture leads earlier via voicemail.
Still, the predominant number of leads are coming from online sources, according to Poyer. “We’re seeing more variety in our channels of advertising,” she said. “We might get a lead from an online source, but we’re inserting a personal connection earlier through either touring or a phone call throughout the buying process.”
And, as noted by Kizer, the buying process is taking longer with the current generation of residents. “We’re seeing our lease timeline move up to three days,” Poyer began. “It doesn’t mean students are not signing with us, it just means they are taking longer to make a decision, likely because they’re inserting tours and phone calls with other properties. There are a lot of touch points happening — more than ever before.”
Jason Fort, executive vice president of business development at Asset Living, agreed, noting that a lot of this comes down to students having more available data than ever before. “With all of this information, they’re going to take longer to make a decision,” he said. “The key for us right now is getting back to basics.”
And while students have lots of information at their disposal, so does the sector. “We’re able to analyze and react in real time, making decisions weekly with our ownership groups,” said Fort. “If we need to offer a concession or need to raise rents, we’re able to see that in real time. Every market is a little different, and there are certainly markets that are struggling, but if you don’t react in a timely fashion, you’re going to miss the boat.”
—Katie Sloan