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Multifamily Market Commentary – May 2018

The Spring 2018 Student Housing Update

For the third consecutive school year, the supply delivered to the off-campus student housing market remains subdued. 

Supply in the student housing sector is defined by the number of beds, as rent is charged on a per bed basis. According to 

Axiometrics, Inc. a RealPage Company, approximately 46,200 beds were delivered nationwide in the 2017-18 school year. 

Further deliveries are expected in the 2018-19 school year, as there are approximately 47,000 beds currently in the pipeline

for delivery in the upcoming school year.

Supply Moderating

The fall 2015 and fall 2016 school years each saw approximately 48,000 campus beds delivered nationwide. Compared to 

the fall 2013 and fall 2014 school years, during which upward of 61,000 beds were delivered each year, there has been a

nearly 30 percent reduction in deliveries. 

This past fall, during the 2017-18 school year, another 46,000 beds were delivered. As of first quarter 2018, approximately 

47,000 beds are under construction for the upcoming school year. Looking further ahead, for the 2019 school year, there 

are another 30,000 beds in the pipeline. Deliveries of over 60,000 beds annually appear to be a thing of the past, as supply 

continues to moderate and the student housing sector matures.

Off-Campus Student Housing Beds through Fall 2019

Source: Axiometrics, a RealPage Company

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

Delivered Under Construction Planned
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Annual Cap Rate Performance

Real Capital Analytics (RCA) reported that cap rates from 2001 to 2017 on student housing have been consistently higher 

than conventional multifamily apartments despite the relative newness of student housing as an asset class, as evidenced

in the chart below: 

Cap Rates for Student Housing and Conventional Multifamily Apartments

Source: Real Capital Analytics

Does the Emergence of Gen-Z Mean We’ve Already Hit Peak Expansion?

According to the U.S. Census Bureau, 2013 was the peak year for the population of the 18-24-year old cohort (individuals 

most likely to be in student housing/college) at approximately 31.5 million people. Since 2013, the population of that 

cohort has steadily decreased to approximately 30.5 million people in 2017. It is expected to continue declining for the 

next 15-20 years. 

During this same time, peak student housing investment took place in 2016 when investment totals were approximately 

$9.8 billion, with construction starts at $5.1 billion. These numbers were nearly four times the average 2004-2008 

investment level of $2.4 billion per year. As the next generation begins to enter college, investment numbers are expected 

to decline along with the 18-24 year old population.

With these population and investment trends in mind, during the recent Interface Student Housing Conference in Austin, 

Texas, much of the industry chatter centered around the emergence of Generation Z (Gen-Z) in the student housing 

sector. Gen-Z is comprised of the population born after 1999 who will be entering their first year of college during the fall 

of the 2018-19 school year. Because the population of the industry’s all-important 18-24-year old cohort is expected to 

continue declining, along with declining student housing investment, there was talk that the student housing industry may 

have already peaked. Jim Costello, Vice President of Real Capital Analytics, believes that the emergence of the new 

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

'01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17

Student Housing Conventional Apt
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generation will allow the student housing sector to continue maturing. If maturation occurs, it could lead to fewer

occurrences of oversupply as developers adjust to the newer population. 

Student Housing Investment and Projected Population of the 18-24-Year Old Cohort

Source: Real Capital Analytics, U.S. Census Bureau
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Developer Activity in Student Housing

In its March/April 2018 issue, Student Housing Business released results from a survey of the 25 most active student 

housing developers. The results included pipeline numbers by developers for the next three years through fall 2021. 

Landmark Properties, American Campus Communities, and Trinitas are reportedly the most active student housing 

developers. Together, the three developers have approximately 50,000 beds in the pipeline over the next three school 

years. The survey results can be seen in the table below. 

Top 25 Most Active Student Housing Developers Through Fall 2021

Source: Student Housing Business

Company (Ranked in Order) # of Beds # of Projects

1. Landmark Properties 21,792 32

2. American Campus Communites 14,213 19

3. Trinitas 13,800 18

4. CA Student Living 13,441 27

5. Core Spaces 13,138 27

6. EdR 10,784 17

7. Park7 Group 10,562 16

8. Aspen Heights Partners 9,900 17

9. RISE: A Real Estate Company 9,664 11

10. Capstone Development Partners 8,550 7

11. Blue Vista Capital Management 8,121 13

12. University Student Living 7,748 8

13. Sterling Housing University 7,200 11

14. Balfour Beatty 6,000 6

15. Gilbane Development 4,400 6

16. Fountain Residential 4,305 11

17. The Collier Companies 3,655 6

18. AMCAL Multi-Housing Inc. 3,214 4

19. Kayne Anderson Real Estate 2,568 4

20. NDG Living 2,490 7

21. Zimmer Development 2,398 5

22. Campus Apartments 2,039 5

23. Haven Campus Communities 2,021 3

24. Annex Student Living 2,000 5

25. Campus Advantage 1,850 3
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Oversupply at Texas and Florida Universities

Even though the supply of student housing nationally has remained constant over the last few years, there remain concerns 

about oversupply in more local areas. The universities and schools located in Texas and Florida are currently working 

through waves of oversupply. Since 2011, five Florida Universities (Florida State, University of Florida, University of Central 

Florida, University of South Florida, and Florida International University) received approximately 26,000 beds, while five 

Texas Universities (Texas A&M, Texas State, Texas Tech, University of Texas-Austin, and Baylor) received approximately 

48,000 beds. Furthermore, of the 47,000 beds expected to be delivered nationally in the fall 2018 school year, approximately 

15,000 beds will be delivered to Florida and Texas schools. The next year, in fall 2019, there are currently 30,000 beds in 

the national pipeline, and approximately 10,000 of those beds are to be delivered in Florida and Texas.

National Student Housing Beds Delivered Annually by State

Source: Axiometrics, a RealPage Company
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Transitioning to a New Era

The student housing sector continues to mature as deliveries plateaued and then decreased in the last few years. Going 

forward, we expect that annual deliveries below 50,000 beds will be the new normal for the student housing sector. As the 

supply in the sector continues to mature, we also expect that demand will stabilize. 

The sector has also seemed to peak as millennials, the largest generation, have finished entering college. With the emergence 

of Generation Z, the population of the 18-24-year old cohort will be smaller, and we expect that there will be less of a need 

for new student housing. Over the next 12-to-18 months, developers are continuing to stay active – arguably overactive in 

certain areas – but the activity in the sector is already adjusting to meet the lessening demand.

Francisco Nicco-Annan

Economist 

Multifamily Economics and Market Research

May 2018

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.