BV DFW Student Housing Portfolio
A value add student housing portfolio consisting of properties at TCU and the University of Texas at Arlington. Both schools are experiencing significant enrollment growth and both properties are within 1/2 mile of campus.
Midtown Urban - UTA
Liberty Lofts - TCU
Fort Worth, TX
Multifamily Student Housing
WHY STUDENT HOUSING?
Have you ever looked at Student Housing as an investment? We believe that now is the time to be bullish on this asset class in Texas. It's one of the few areas of real estate where demand outstrips supply and will continue to as enrollment numbers increase faster than new dorms can be built.
Location matters as with all real estate and Texas is a great location for student housing. According to the College Board, enrollment increased from 2008 to 2018 by 23% across Texas Universities. This is the highest increase from any state in the US. This increase in enrollment may have slowed during the pandemic, but all signs point to a greater than expected increase in enrollment at Texas universities due to certainty of in person classes this fall.
College campuses create enormous demand for housing yet many college campuses are not equipped to house a student for their full term at school. This is why many schools only require Freshman and sometimes Sophomores to live on campus. For a variety of reasons, many universities have slowed in building new dorms and on campus housing and thus haven’t kept up with the increasing demand for housing. This slower construction trend will most likely continue as many colleges and university budgets are currently strained due to the impact of the pandemic on many state budgets.
According to the College Board, about 44% of college students reside off campus. This is why third-party real estate investors and developers have come in to take advantage of this business opportunity. Student housing apartments are now constructed on the edge or just outside of campuses to meet this demand and their amenities are tailored to an 18–22 year-old student demographic. For example, as students grow into upperclassman, they typically desire more privacy and no longer want to share a dorm with other students giving rise to the current demand for projects next to campus where students can have their own room, bathroom and closet.
Another advantage to student housing is that this property type is genuinely resilient to an economic downturn. College enrollment generally rises is recessionary periods as the labor markets tighten. Many students will stay in school longer to get graduate degrees while they wait for the economy to recover. This added enrollment creates additional need for student housing as well.
The student housing industry is unique in the real estate and leasing spaces. The audience is narrow, turnover is frequent, and the vast majority of leasing occurs in two distinct windows (based on school sessions). Units are typically fully furnished and leased by the bedroom and not the unit. This is why it is favorable to partner or hire a specialist in the leasing and management of student housing. If properly run by a professional who understands the uniqueness of the student market these investments can add significantly to your overall portfolio.
Lastly, student housing has produced on average a 44-basis point higher yield than that of like kind multifamily properties in 2019. Combine the higher yield with the cap rate compression (higher values) we’ve seen for the past seven years and the value of this asset class is clear. Further there is strong demand from institutional buyers which provides for a solid exit strategy for investors and developers in the space. Recent studies show that 67% of student housing buyers are institutions such as REITs, Funds, Pension Plans and Foreign Investors providing added support for student housing as an intriguing asset class to invest in today.
A value add student housing portfolio consisting of properties at TCU and the University of Texas at Arlington. Both campus are experiencing significant enrollment growth and both properties are within 1/2 mile of campus.