Austin, Texas — FourPoint Student Housing Investments has released its year-end 2014 round-up of student housing research. The Four Point team analyzed the off-campus student housing business from the perspectives of development, transaction and lending. The report finds that transaction volume in the student housing industry was $2.38 billion in 2014, making it the third most active sales year in the history of the industry. The company reports 80 transactions it tracked in 2014, with an average bed price of $74,525 for Class A product, and average bed price of $34,797 for Class B and C product. Cap rates continued to edge downward in 2014, with low interest rates and strong demand for core product creating several of the most expensive transactions recorded in the industry. Development continues a streak in the industry, with more than 97,000 beds in more than 200 properties opening in 2014 and 2015.
"The three major themes in the student housing space are: new equity, new development, and a much greater acceptance in the real estate investment community," says Chris Epp, principal with Austin-based FourPoint Student Housing Investments. "Our report takes a deep dive into all of these themes and provides investors an unparalleled look at the space from an investment sales perspective. It's really exciting to see the student housing industry mature at such a fast clip. The combination of new equity players and a record low interest rate environment has allowed developers to push the envelope to the max and deliver some of the most impressive multifamily assets in the US, student or otherwise."
On the finance side, the report cites that there will be a dramatic increase of CMBS loan maturities in the next eight years, with more than $2.5 billion set to mature in 2016 and 2017. A large portion of these, in student housing, have no clear exit strategy, says Epp.
FourPoint has made the report accessible to all in the industry. To receive a copy, please click here.
"Our team spends a tremendous amount of time and energy compiling the information in our year end report," says Chris Bancroft, principal at FourPoint. "As anyone involved in student housing industry knows, our market remains relatively fragmented despite its maturity over the years. That includes a lack of consistent information about the trends, metrics and themes of our industry. We believe that all stakeholders involved in our space can benefit from this information and for that reason, we make it available to everyone."
— Randall Shearin