2021 Student Housing Market Overview and 2022 Outlook - Flipbook - Page 32
Despite domestic volatility, the health of the U.S. economy is robust compared with foreign markets suffering heavier effects from
the war in Ukraine, global supply chain constraints, and international response to U.S. rate hikes. The remainder of 2022 and the 2023
outlook will likely be judged on the Federal Reserve’s monetary policy and the ability to balance between easing inflation and avoiding
a negative impact on economic growth. Over the last four tightening cycles - dating back to 1990, the average length of time between
STUDENT HOUSING NEW SUPPLY
Beds
the Federal Reserve’s first rate hike and shifting policy to the first-rate cut was 2.2 years. Whether the Federal Reserve is posturing or
not, the current rate hike environment may be shorter-lived than anticipated. The last time the Federal Reserve was hiking rates and
2022
shrinking the balance sheet, they managed to reduce a mere $600 billion before reversing the policy. For now, the market is flush with
liquidity, and liquidity has a tendency to trump interest rate volatility when predicting healthy lending volumes.
2021
40,000
2020
Development Pipeline
2019
Total off-campus new supply of purpose-built student housing assets decreased in 2021 as developments in major markets were
2018
52,000
49,000
57,000
heavily affected by the COVID-19 pandemic. Fall 2021 deliveries were at the lowest level since 2011. Approximately 40,000 beds were
delivered in 2021, a 12,000-bed decrease over 2020 beds delivered. The average annual development pipeline is approximately 54,000
2017
55,000
beds, representing the normalized level of annual student housing deliveries between 2015 and 2020, and has become the benchmark
over the last several years. With only 40,000 beds delivered in 2021, new supply is now significantly below historical levels, and
2016
54,000
deliveries are projected to decrease further in 2022, with only 30,500 beds anticipated to deliver. The total beds projected to deliver in
2022 would be near the lowest delivery totals since 2011’s 30,000 beds delivered.
2015
In 2021, supply chain issues, rising construction costs, and wage inflation all contributed to negatively impacting the student housing
2014
56,000
78,000
development pipeline. Furthermore, many of the markets that received new supply in recent years will not see a similar level of supply
2013
AVERAGE DISTANCE FROM CAMPUS BY YEAR CONSTRUCTED
2012
In Miles
0.6
30,000
0
0.59
0.58
10,000
20,000
30,000
Under Construction
0.56
0.49
0.5
0.46
0.43
0.42
0.4
0.27
0.3
0.3
0.34
0.3
0.35
0.26
40,000
50,000
60,000
70,000
80,000
90,000
Stabilized
Source: Axiometrics/RealPage
0.3
in future years. The spread of development across markets is a cautionary movement from developers as sophisticated investors
0.2
0.1
52,000
2011
0.8
0.7
69,000
largely are focused on markets that have limited housing or functionally obsolete product. As student enrollment is anticipated to
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
increase substantially in Fall 2022, Tier-I and Tier-II universities will require ongoing development to supplement the ongoing accelerated
demand for innovative accommodations to replace out-of-date dormitories across the nation. Enrollment in degree-granting institutions
is anticipated to grow to 19.8 million by 2025 – up from 17.2 million in 2013, per the National Center for Education Statistics. As seen
Source: Axiometrics/RealPage
2 0 2 1 S T U D E N T H O U S I N G M A R K E T O V E R V I E W A N D 2 0 2 2 O UT L O O K
in recent years, an underlying core driver of enrollment growth has been the influence of international students. Additionally, top-tier
NEWMARK
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