Copyright© 2015 Fannie Mae 1

Multifamily Market Commentary – June 2015

Student Housing – Staying at the Head of the Class

The student housing sector has been attracting investment at a rapid pace over the last few years. Both 2013 and 2014 

brought record amounts of new supply to the sector. Approximately 124,000 beds were delivered across the nation in a 

very short period of time, which raised concerns regarding potential oversupply. However, according to multifamily data 

and research firm Axiometrics, Inc., that pace has slowed to approximately 48,000 new beds expected in 2015. The 

slowdown in deliveries is a good thing for the sector as it should allow for occupancies and pre-leases to increase and 

catch up with supply over the short term.

Status of Deliveries Improving

This year’s estimated 48,000 bed delivery is approximately 75 percent of the number of beds delivered in 2014. The map 

below, provided by Axiometrics, is an indication of the status of not only this year’s and next year’s anticipated student 

housing supply, but also the last two years’ amount of supply. The last two years saw a record amount of student housing 

supply delivered throughout the country, as the copious amount of orange and green dots on the map below demonstrate.

Off-Campus Student Housing Fall 2013-2016 Deliveries 
© 2015 Fannie Mae 2

Student Housing Sector: Three Major Players

The student housing industry is made up of many developers and sponsors, some of which are new to the sector. 

Perhaps the three developers with the most profound impact within the industry are American Campus Communities, 

Campus Crest Communities, and Education Realty Trust. Of the three, Austin-based American Campus Communities is 

the biggest industry player. Founded in 1993, its portfolio consists of approximately 95,000 beds at 205 properties across 

the country. The freshest face among the three major players, Campus Crest Communities, was founded in 2004. 

According to Axiometrics, CCC currently has a portfolio containing approximately 43,000 beds at 47 properties across the 

country. Lastly, Education Realty Trust, which was founded in 1964, has approximately 25,000 beds at 47 properties. 

A More Crowded Field

Every year, Student Housing Business publishes a list of the top 25 property owners in the sector, as seen in the table 

below. Owners are defined by the number of off-campus student housing beds they provide. To no surprise, the top three 

owners are American Campus Communities, Education Realty Trust, and Campus Crest Communities. 

Among the top 25 owners, the average number of beds owned is approximately 15,800. As shown in the table below, 

there were three new entrants to the top 25 this year – Blue Vista Capital, Kayne Anderson, and Harrison Real Estate – all 

of which were previously unranked in 2013. 

Top 25 Student Housing Owners

Company (Ranked in Order) Net Beds

% Change from 

2013 2013 Rank

 1. American Campus Communities 102,825 1.79% 1

 2. Education Realty Trust 31,359 7.39% 3

 3. Campus Crest Communities 30,035 -47.02% 2

 4. The Collier Companies 22,184 -2.43% 4

 5. The Scion Group 16,253 25.41% 8

 6. The Preiss Company 15,246 18.97% 7

 7. Blue Vista Capital Mgmt. LLC 13,839 N/A N R

 8. Campus Living Villages 13,495 -4.06% 5

 9. Horizon Realty Advisors 12,063 14.47% 10

10. Campus Apartments 10,789 -3.82% 9

11. Kayne Anderson Real Estate Advisors 10,747 N/A N R

12. Aspen Heights 10,661 41.44% 19

13. Campus Advantage 10,175 14.13% 13

14. Diamond Realty Investments Inc. 8,603 -1.87% 12

15. Inland American Communities 8,594 -3.82% 11

16. Campus Evolution Villages 8,500 33.12% 23

16. University Communities LLC 8,500 23.53% 17

17. Vesper Holdings 8,407 26.32% 21

18. Landmark Properties 7,696 19.43% 20

19. Sterling University Housing 7,216 1.61% 16

20. Columbus Pacific Properties 7,115 18.85% 22

21. Pierce Education Properties 7,094 21.00% 25

22. Capstone Collegiate Communities, LLC 6,447 0.25% 18

23. Trinitas Ventures 6,305 11.07% 24

24. Harrison Real Estate Capital 5,999 N/A N R

25. M&A Real Estate Partners 5,060 8.26% 27

Source: Student Housing Business
© 2015 Fannie Mae 3

Student Cap Rates Trending Down

According to Real Capital Analytics, the 12-month average capitalization rate on student housing properties through the

first quarter of 2015 was 6.0 percent, down by 10 basis points from the previous quarter and well below the 8.10 percent 

peak in first quarter 2009. Comparatively, the average cap rate for all apartments in first quarter 2015 was also 6.0 

percent.

As shown in the chart below, student housing cap rates have historically tended to trend higher than the overall apartment 

sector’s average cap rates and have tended to align only over the past few years. Investors appear to be viewing the 

investment risk profile of student housing properties to be on par with conventional market-rate multifamily properties, 

despite the sector being a niche property investment. Time will tell if this perception was in line with market realities. 

Student and Apartment Cap Rates as of Q1 2015

Global Investment in U.S. Student Housing – The Beginning of a New Trend

The success and rapid expansion of the student housing sector is gaining the attention of non-U.S. investors. According 

to online real estate news website BisNow, with many public universities in debt, they are hoping to attract non-U.S. 

investors who are looking to gain a foothold in the nation’s real estate sector, specifically in student housing. Non-U.S. 

investors have an incentive to bring their funds to the U.S., thanks in part to the federal visa program known as EB-5. The 

EB-5 program allows foreign investors to gain permanent green cards if they invest a minimum of $500,000 in a company 

that creates at least 10 full-time jobs within two years. 

Source: Real Capital Analytics
© 2015 Fannie Mae 4

Deliveries Slowing Down

Although student housing supply is delivered across the country, as the chart below illustrates, many of the beds have 

been concentrated in the same 10 states since 1995. Texas leads the way with receiving more than 100,000 deliveries 

since 1995. With the presence of larger universities such as the University of Texas-Austin and Texas A&M, with 

approximately 52,000 and 54,000 students enrolled (respectively), the number of beds delivered to the state of Texas has 

been justified over the years, as demand is present.

The state of Florida has had the second highest number of beds delivered since 1995 at more than 60,000. With the 

presence of Florida State University and the University of Florida, which have approximately 41,000 and 50,000 students 

enrolled, respectively, ongoing demand has been the driver of deliveries.

Number of Off-Campus Student Housing Beds Delivered by State from 1995-2014

Top 20 University Delivery Outlook

Since 1995, roughly 671,000 off-campus beds have been delivered to more than 200 universities. Approximately 40

percent of the beds delivered since 1995 have been to just 20 universities in the U.S. Of these 20 universities, half are 

located in either Texas or Florida, as seen in the table on the following page. These are the two states that have 

cumulatively had the most beds delivered since 1995. Florida State University has had the most beds delivered since 

1995, totaling approximately 20,300.

Rounding out the top three with the total number of off-campus beds delivered since 1995 are Texas A&M University and 

the University of Texas-Austin, with respective totals of 19,600 and 17,900 beds. The University of Florida has had the 

fourth highest number of off-campus student housing beds delivered since 1995, totaling 18,200. 

Source: Axiometrics
© 2015 Fannie Mae 5

Universities with the Highest Annual Number of Off-Campus Beds Delivered from 1995-2014

Experience Matters in Student Housing

The last few years have seen a robust amount of off-campus beds delivered. Approximately 124,000 beds were delivered 

in 2013 and 2014, stoking fears of oversupply for the sector. However, in 2015 the market appears to be settling down 

with just 48,000 beds expected. The dip in beds delivered this year is expected to allow the student housing sector to 

work through its existing supply. The reduction in beds delivered also should help increase both occupancy rates and rent 

growth as developers will not be forced to beat out rivals in delivering the latest and greatest student housing units. 

Francisco Nicco-Annan

Real Estate Economist

Multifamily Economics and Market Research

June 2015

Opinions, analyses, estimates, forecasts and other views of Fannie Mae's Multifamily Economics and Market Research Group (MRG) 

included in these materials should not be construed as indicating Fannie Mae's business prospects or expected results, are based on a 

number of assumptions, and are subject to change without notice. How this information affects Fannie Mae will depend on many 

factors. Although the MRG bases its opinions, analyses, estimates, forecasts and other views on information it considers reliable, it 

does not guarantee that the information provided in these materials is accurate, current or suitable for any particular purpose. Changes 

in the assumptions or the information underlying these views could produce materially different results. The analyses, opinions, 

estimates, forecasts and other views published by the MRG represent the views of that group as of the date indicated and do not 

necessarily represent the views of Fannie Mae or its management.

Source: Axiometrics