Austin, Texas — Newmark Knight Frank (NKF) has released an industry report titled the NKF 2019 Student Housing Market Overview and 2020 Outlook.
In 2019, the industry saw a deviation from major portfolio sales to a high transaction volume focused on single-asset sales and mini-portfolios, according to NKF’s findings. Cap rates sustained marginal fluctuations from 2019’s compression, and continued interest from institutional, domestic and international capital promoted greater market scale within the asset class.
More than $5.8 billion of capital flowed into the student housing sector in 2019, directed toward the acquisition of investment-grade properties priced at $2.5 million or more. This figure represents a decrease of 28.5 percent over the five-year average and an increase of 13.3 percent over the ten-year average, according to NKF’s report.
The transaction volume decreased 47.3 percent from the previous year in 2019, primarily due to the lack of off-market, large portfolio transactions from owners backed by both institutional and private capital seeking to accelerate their scale within the space.
The past year saw a few large transactions and portfolio sales, but was highlighted by a variety of one-off transactions. The primary portfolio transactions of 2019 include a $612 million, nine-property acquisition by Goldman Sachs from Core Spaces; a $255 million, four-property acquisition by Scion Group and Hana Financial Group from Kayne Anderson; and a $238 million, five-property acquisition by Ocean West, Korea Investment Holdings and Landmark Properties from Scannell Properties, 908 Development and Zaragon Inc.
“The overriding dynamics of the market have abruptly shifted and the Overview and Outlook Report has been created to provide in-depth research at a time when great information and data is paramount,” says Ryan Lang, vice chairman of student housing and multifamily capital markets at Austin, Texas-based Newmark Knight Frank.
To read the full report, click here.