Steve Canty
Director, GRS Group
(858) 433-0441
[email protected]
The student housing sector of commercial real estate is gaining some attention as of late. In this case, it’s a major proposed acquisition.
Greystar Real Estate Partners is reportedly looking at purchasing Education Realty Trust (EdR) for $3.1 billion. The purchase of the REIT would give multifamily owner Greystar 79 properties at 50 universities totaling about 42,300 beds. For its part, Greystar owns 415,000 multifamily units worldwide. The deal would take EdR private.
There is reportedly another bidder for EdR, a partnership between The Scion Group and Harrison Street Real Estate Capital.
This follows another big student housing deal, when American Campus Communities announced the sale of three assets for $245 million, in part to collect funds to build a $615 million asset near Walt Disney World.
Meanwhile, also in the Orlando area, two student housing facilities, that total 1,230 beds, changed hands this year in separate deals.
For its part, EdR saw net income and rental rates rise year over year during its first quarter, though FFO and occupancy did dip slightly. Meanwhile, the company is in development growth mode. Its activity in that area is expected by executives to rise 32 percent this year from the end of 2017. That will total 12 communities at a cost of $901 million. Two significant projects are currently underway in Mississippi and Pennsylvania.
On a national basis, there are 46,200 beds currently under construction, up slightly from 2017, but relatively in line with prior years, according to a RealPage. There are reportedly 15 schools with 1,000 or more beds set for delivery this year. Florida State and Texas A&M have 2,000 beds underway each.
RealPage pointed out that with the exception of January preleasing has increased in the student housing sector every month from last year and has remained stable. Rent and leasing growth are strongest in facilities a half mile away from campus or less.
Statistica has reported that student enrollment continues to be on the rise, which further bolsters the sector and makes it an attractive future bet for investors. There are reportedly about 20.7 students enrolled at universities this year, and that number is expected to jump to about 23 million by 2026.
Meanwhile, a National Real Estate Investor report at the beginning of the year said that rents and occupancy are predicted to rise by observers, but there could be an overabundance of supply being built in certain markets.
About GRS Group:
GRS Group is a leading provider of commercial real estate (“CRE”) services worldwide. With offices across the United States, Europe, and affiliates around the globe, GRS Group provides local market knowledge with a global perspective for institutional real estate investors, occupiers and lenders worldwide. The GRS Group team has evaluated and advised on over $1 trillion in CRE transactions.