Real Estate Sector Expected to Outperform

According to a new report, one sector of real estate is continuing to break records despite rising interest rates.

By Rethinking65

According to a new report, one sector of real estate is continuing to break records despite rising interest rates.

The student housing industry is set for another solid performance in 2023 after record returns last year, says the National Student Housing Report from Yardi Matrix, a real estate software company with 8,000 employees worldwide.

“With over eight months to go until the start of the next school year, we anticipate 2023 being another record-breaking year for student housing performance,” says Yardi in a press release. “One caveat: highly selective universities with name recognition are maintaining their interest among incoming students, while smaller schools are having more difficulty with enrollment.”

While leasing is strong, the slowing economy is having an impact on new student housing supply. With interest rates increasing, the development pipeline is contracting, the report says.

In fact, the development pipeline for Yardi 200 universities — including planned, prospective and under-construction properties — decreased by over 3,000 bedrooms from December to January, representing a 2.6% contraction. Yardi evaluates data at over 2,000 universities and colleges nationwide, including the top 200 investment-grade universities, known as the Yardi 200, across all major collegiate conferences.

The report noted the top 20 universities as of December with the most year-over-year growth in the percentage of housing preleased for fall 2023. The top five in YoY growth are Johns Hopkins University, 66.7%; Texas Christian University, 60.1%; University of Arkansas, 54.2%; University of Pittsburgh, 48.8%; and University of Southern Mississippi, 45%.

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