Colliers International Releases Tier 2 and Tier 3 Student Housing Report

Clearwater, Fla. — Rising enrollments and fewer large-name companies operating in these markets continue to make housing near smaller schools enticing as opportunistic investments, the report says.

Colliers Sean BairdWEBSean BairdClearwater, Fla. — Sean Baird, associate with Colliers International Student Housing Group, has written commentary and compiled data and research about Tier 2 and Tier 3 student housing markets. The report defines Tier 2 universities as having fewer than 20,000 students and Tier 3 as having fewer than 10,000 students enrolled. Of these types of institutions in 2013, 8,278 units and 19,280 beds were sold; the average price per unit was $127,751; the average price per bed was $46,804; the average occupancy was 96 percent; and the average cap rate was 6.7 percent.

 

According to the report, the Tier 2 Tier 3 student housing markets saw an increase of approximately 25 percent in total number of sales with 61 properties transacting in 2013. Total sales increased by 45.7 percent to more than $747 million (with 49 properties reporting), up from approximately $512 million (48 properties reporting) in 2012. With an average sales price of approximately $15 million, it is estimated that approximately $900 million in total transactions occurred for the year.

 

The Southeast region led in Tier 2 and Tier 3 transaction activity with the largest increase in student housing sales. Both the number of sales and total transaction value more than doubled from 2012 to 2013, with 26 transactions and approximately $271 million in sales (taken from 23 reported transactions). While the Southeast had the highest transaction volume, sales prices in the Northeast were the highest in the country. The highest price per bed in 2013 was just below $100,000.

 

The full report can be read here.

 

 

 

 

 

 

 

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