Too Many Beds?
With about 60,000 beds slated for delivery this year across 100 universities, there’s concern of overbuilding. But, if you dig a little deeper into the numbers: it’s just right. (For some students, the bed is the most important part of the college experience... those making money from sleep studies. Get your mind out of the gutter!)
Axiometrics research VP Jay Denton (hanging out in the Dallas office with Texas artist Ginger Fox’s The Amazing Ball Buster; we can’t make this stuff up) tells us deliveries this year will be 5,000 more than 2013. The new beds are almost entirely in markets that didn’t get new units for the previous school year, he says, and the impact of supply varies by campus, neighborhood, and price point within each market.
Jay says Florida State University is at the top of the list for new supply in 2014. (You win one National Championship and all of a sudden a million people want a piece of it.) The overall effective rent growth for the university’s student housing is flat to slightly negative, but we need to be cautious about taking these stats at face value, Jay tells us. For the newer properties closer to campus, there’s positive rent growth and a faster lease-up. The opposite is true for the properties more than a half-mile from campus, he says.
Much like the performance of the Crimson Tide football team, enrollment growth at the University of Alabama has been strong during the last decade, Jay says. Enrollment has increased at a faster rate than new on-campus housing can come online. So off-campus developers have been tapped to provide additional housing. It's easy to see why developers found this to be an attractive market, he says.