Our latest edition of Impacts, themed reconnect, explores how real estate is fundamental in helping people and businesses to connect and thrive. Published June 6, 2022 Leslie Shaver Senior Reporter Permission granted by American Campus Communities In April, public student REITs essentially went extinct when private equity colossus Blackstone took American Campus Communities private in a $13 billion deal. Given the abundance of private institutional capital targeting student housing assets and prior acquisitions of EDR and Campus Crest, in January, we projected a potential takeout of ACC at $65/share. Loss of principal is possible. Updated share price information for Savills Plc from London Stock Exchange. We've grown a lot in 160 years. For properties located at Power 5 schools, sales had an average cap rate of 5.0%, more than 20 basis points lower than the 5.3% average of other student housing properties sold.
Bsr Reit | Home Hoya Capital Research is an affiliate of Hoya Capital Real Estate ("Hoya Capital"), a research-focused Registered Investment Advisor headquartered in Rowayton, Connecticut., Founded with a mission to make real estate more accessible to all investors, Hoya Capital specializes in managing institutional and individual portfolios of publicly traded real estate securities, focused on delivering sustainable income, diversification, and attractive total returns.. The period of school closures and online learning alternatives has caused a dip in the prices for publicly traded REIT shares, and although this is still a factor that has caused a drop in share prices, it creates an opportunity for new investors to get into REITs for a lower investment cost. In recent years ACC has pioneered on-campus housing development in joint ventures with universities. Speaking of supply growth, ground-up development has historically been the modus operandi and growth engine for the student housing sector. These are the characteristics of real estate investment. As noted, student housing assets are riding a swift recovery and brightening outlook over the past twelve months as the effects of soaring rents have more-than-offset ongoing COVID issues and longer-term secular headwinds on enrollment. Given the inherent competitive advantages for investors of the public REIT model, we think that the tides will eventually shift back in favor of publicly-listed REITs over their less-investor-friendly non-traded REIT peers, so we'll continue to keep the student housing industry on our radar in expectations of an eventual reunion. State appropriations to public universities have generally trended down over the past decade as a greater share of state spending goes towards healthcare and other entitlement programs. Information presented is believed to be factual and up-to-date, but we do not guarantee its accuracy and should not be considered a complete discussion of all factors and risks. American Campus Communities (ACC) - the first of three student housing REITs to go public and the last one still publicly traded - was scooped up last week by Blackstone (NYSE:BX) in one of its five major REIT acquisitions since last June to feed its fledging non-traded REIT ("NTR") business, Blackstone Real Estate Income Trust ("BREIT"). Off-Campus Apartments for Rent near University of Central Oklahoma. REITs historically have delivered competitive total returns, based on high, steady dividend income and long-term capital appreciation. This report will likely be our final quarterly student housing report until the tides shift and we see these portfolios come back into the public markets, but it is nevertheless important to monitor broader industry trends given its parallels to the broader residential REIT sector. With the current declines in student enrollment, the present situation leaves some investors wondering if student housing REITs are still a good option, but the current data suggests that at least in some sub sectors, it is, but its important to choose the right REITs. Hoya Capital Real Estate advises an ETF. Investors started to catch on to the class after. While the situation became sketchy from March of 2020 to the present, it served to lower the price per share of some REITs. The remaining 50% rent other types of non-purpose-built rental housing near campus. George Kwok Lung Hongchoy of real estate company Link REIT says interest rate rises have been a challenge for property investment companies and "inflation will persist for a little big longer . This idea was discussed in more depth with members of my private investing community, iREIT on Alpha. In fact, during times of economic weakness, colleges may actually see higher enrollments as people who may not have otherwise attended college elect to leave or defer entering the job market in. Expanded REIT Rankings Reports With Exclusive Content, Hoya Capital "Real Estate Robo Investor" ETF Model Portfolios. There is a trend in student housing that sees more students opting for private off-campus housing, as developers have invested in this specific type of private housing option. Motley Fool recommends American Campus Communities, which is one of the largest REITs with a strict focus on student housing. Keith Lampi, reviews the outlook for student housing in 2023 and the key operating fundamentals that well-positions the sector for a solid future performance. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. As a percent of total enrollment, ACC sees 1.4% growth in new supply in their markets in 2019 which is roughly in line with the historic average, but up from 1.2% in 2018. We would rather build in a primary location in a secondary market than in a secondary location in a primary market..
Savills | Student housing REITs I have no business relationship with any company whose stock is mentioned in this article. Index performance cited in this commentary does not reflect the performance of any fund or other account managed or serviced by Hoya Capital Real Estate. He says this strategy helps them control quality and the student experience. Student housing REITs have decent opportunities to excel on demand for on-campus developments from universities. Most REITs trade on major stock exchanges, and they offer a number of benefits to investors. US Student Housing REIT (Real Estate Investment Trust) was established in 2021 and is listed on the Australia Securities Exchange (USQ:ASX). If you ignore the high yield, which is really just a mirage to attract yield-chasing investors, the company is . The university gets an annual ground-lease rent check (without deploying any capital) and the students get a new dorm.
UCO: Housing & Residential Engagement - University of Central Oklahoma According to a Pew Research poll, nearly 40% of Americans now believe that colleges and universities have a negative effect on the country, up sharply from 27% in 2010. Student housing isnt just about real estate, its about creating an environment for academic achievement, Bayless says. Nearly spot-on with that call, Blackstone's $12.8 billion takeout at $65.47/share bid is a healthy 14% premium to ACC's prior close. When we consider the number of business closures and the rising unemployment figures, its been a trend for decades to see enrollment numbers increase as more people are returning to school to augment their employment skills and credentials, in hopes of securing better jobs in the future. Savills plc is focused on climate-related risks and working together with its clients, suppliers and the local communities to deliver a more sustainable future. Their comparatively low correlation with other assets also makes them an excellent portfolio diversifier that can help reduce overall portfolio risk and increase returns. Churchey says parents, who foot the bill for many students, are interested in secure, well-maintained, academically oriented housing and they are not particularly price sensitive. Off-campus units are also highly exposed to changes in university housing policies. Hoya Capital has no business relationship with any company discussed or mentioned and never receives compensation from any company discussed or mentioned.
The spread between conventional multifamily and student housing was 40 bps, indicating a 10-basis-point, year-over-year spread increase.
Link REIT's portfolio 'quite resilient' despite challenging year: CEO Bill Bayless, CEO of American Campus Communities (NYSE: ACC), says that until the mid-1990s, student housing was ignored by property developers, who failed to see the opportunities to replace traditional dorms built in the 1950s to 1970s. Analysts Disclosure: I/we have a beneficial long position in the shares of RIET, HOMZ, ACC either through stock ownership, options, or other derivatives. 18 May 2023, International Property
These massive acquisitions have become necessary to feed its fledging non-traded REIT, BREIT. For the student housing sector, growth has been harder to come by over the last half-decade. Its a growth industry because of the need to replace aging facilities, the capital constraints on universities and the fact that students want amenities.. Compared with their conventional multifamily peers, student housing typically assets operate at lower margins due to increased costs associated with leasing and more frequent turnover, but save on lower property taxes as some on-campus facilities (as part of a University partnership) are exempt from property taxes. The latest UK and international property market news and opinions, plus helpful guides and top tips from our renowned industry experts. Alignvest Student Housing ("Alignvest") is pleased to announce the Fair Market Value ("FMV") of the Units of Alignvest Student Housing Real Estate Investment Trust ("ASH REIT") at $122.50 per . A few decades ago investors saw the tremendous opportunities. Data quoted represents past performance, which is no guarantee of future results. In addition to any long positions listed below, Hoya Capital is long all components in the Hoya Capital Housing 100 Index and in the Hoya Capital High Dividend Yield Index. If you have an ad-blocker enabled you may be blocked from proceeding. A university, in need of new dorms but without the capital to build one, leases land to the REIT, which then builds, owns, and manages the facility. I am not receiving compensation for it (other than from Seeking Alpha). The other three-fourths of revenue typically comes from a traditional private off-campus ownership model (sometimes in partnership with a university) which is generally more exposed to supply/demand imbalances and changes in university housing policies. While BREIT may be the "best of the bunch," non-traded REIT managers have, for decades, capitalized on investor interest in private real estate vehicles based largely on the (likely faulty) notion that private real estate doesn't exhibit the volatility of public REITs simply because it is priced less frequently and in a substantially less transparent manner. 15 April 2019, All content copyright document.write(new Date().getFullYear()); Savills. I have no business relationship with any company whose stock is mentioned in this article. Since 2014, the REIT has performed broadly in line with real estate sector benchmarks.
State Of REITs: Distress Brings Opportunity | Seeking Alpha Following EdRs acquisition by Greystar, American Campus Communities (ACC) is the only publicly traded student housing REIT in the US. Since 2014, the REIT has performed broadly in line with real estate sector benchmarks. You cannot predict the future,, Read More 10 Stocks That are Similar to Apple but CheaperContinue, If you have ever needed to put your stuff somewhere because youre moving, or just have more stuff than you can fit in your attic, basement, and garage, it is likely you have at least, Read More Why Public Storage (PSA) is Solid Buy for the Next 20 YearsContinue, People who are interested in stocks will have seen the term beta being used here and there.
6 Best REITs To Invest In for 2023 | GOBankingRates The millennial generation - the largest cohort in American history - supported the maturity of the student housing industry over the last decade into a mainstream institutional-grade real estate sector. Whether you're planning to sell, rent or are undecided, we have an expert who can help. Powering the strong performance is a recovery in enrollment growth at top universities to the highest level since 2017. Carey ( WPC, $70.03) is a leading net-lease REIT that invests in high-quality, single-tenant properties. I/we have a beneficial long position in the shares of RIET, HOMZ, ACC either through stock ownership, options, or other derivatives. Non-traded REITs - which are typically promoted to investors by broker-dealers that receive hearty up-front commissions of 3-7% and "trailers" of up to 1% annually - have rightfully been subject to heavy scrutiny from regulators due to their high fee structure, lack of liquidity, and prevalent conflicts of interests.
The REIT was established to acquire and manage high-quality purpose-built student housing assets located within close proximity to top-tier public universities across the United States, and drive value . Generally, facilities closer to campus are believed to have higher barriers-to-entry and are less exposed to oversupply or other idiosyncratic risks. Purpose-built student housing facilities are generally cheaper and are equipped with more applicable amenities for students than typical off-campus housing facilities. State budget cuts for public universities have limited schools ability to develop or renovate their housing and thats also not their area of core competency, says Meliker.
Which Student Housing REIT Should You Invest In? - Money Inc Revenue from these models comprises roughly a quarter of total revenue. Information on the company, shares and company reports. I have no business relationship with any company whose stock is mentioned in this article. The information presented does not reflect the performance of any fund or other account managed or serviced by Hoya Capital. Investments in real estate companies and/or housing industry companies involve unique risks, as do investments in ETFs. These massive acquisitions have become necessary to feed its fledging non-traded REIT business, BREIT. Attractive development yields are, of course, a double-edged sword, prompting new supply growth into the sector.
Sell Alert: 2 REITs Getting Risky | Seeking Alpha Read the other articles within this publication below, Director, Head of Department
While access to capital hasn't been a factor amid the wide NAV discounts over the past two years, we believe that the REIT model awards ACC with a long-term cost of capital advantage over its private market peers that will be unlocked once again through accretive acquisition-fueled external growth as the company regains its coveted NAV premium. Hoya Capital Real Estate ("Hoya Capital") is a registered investment advisory firm based in Rowayton, Connecticut that provides investment advisory services to ETFs, individuals, and institutions. 30 May 2023, International Property
Since completing its strategic portfolio refinement in late 2018 through the end of March before the acquisition announcement, ACC had outperformed the broad-based Vanguard Real Estate ETF (VNQ) by roughly 1.5 percentage points annually. While that is good news for the rest of the residential REIT sectors, it's not great news for the student housing sector. When hard economic times hit, there is an upswing in students returning to school. the past twelve months as the effects of soaring rents have more-than-offset ongoing COVID issues and longer-term enrollment headwinds. )
Industrials, SFR Lead a Mostly Down Week for REITS | GlobeSt With an improved cost of capital and expense growth finally under control, Core FFO growth is finally projected to reaccelerate this year to 4% growth, which would be the best year since 2014. Nareitis the worldwide representative voice for REITs and publicly traded real estate companies with an interest in U.S. real estate and capital markets. REITs invest in the majority of real estate property types, including offices, apartment buildings, warehouses, retail centers, medical facilities, data centers, cell towers, infrastructure and hotels. Founded in the UK in 1855, Savills is one of the world's leading property agents. The more modern housing options intended for students are a more attractive alternative to dorm rooms, and they offer more amenities and the privacy that is often lacking in campus based housing. Most of the previous residents left, and yet we quickly reached 100 percent occupancy.. Student housing emerged as a full-fledged institutional asset class over the last half-decade as institutional capital has flowed into the sector in search of a counter-cyclical asset class with a unique and uncorrelated return profile. RealPage reported that student housing rents are showing an "unprecedented growth rate" in pre-leasing for the Fall 2022 semester with annualized rent growth of 5% which is double the average rent growth achieved through the 2010s. A complete discussion of important disclosures is available on our website (www.HoyaCapital.com) and on Hoya Capital's Seeking Alpha Profile Page. Meliker says student housing is an attractive recession-resistant investment that outperforms in a bad economy when more people opt to go to school or stay in school longer. In our quarterly State of the REIT Nation, we analyze the recently-released NAREIT T-Tracker data which focuses on higher-level macro themes affecting the REIT sector at large. American Campus pays a dividend yield of 4.0%, ranking towards the upper-end of the REIT sector average. A selection of highlights, comments and data from the company's latest results. Bayless points out that students appreciate living in an impeccably maintained class-A community and they respond positively to managements organized alcohol-free events and zero-tolerance policies for property damage. Student housing assets, especially off-campus units that are not part of a University partnership, are also exposed to changes in University housing policies that can result in significant asset impairment.
The last public student housing REIT goes private At Savills, our most valuable resource is our people. Back in January, we initiated a position in American Campus in the REIT Focused Income Portfolio based on the improving trends we observed across the student housing sector and on the potential for a takeout given the ample amount of institutional capital targeting student housing assets. Student Quarters manage in excess of >US$1.1BN across off campus US Student Housing. Please disable your ad-blocker and refresh. The second recommendation is EDR, which went public in 2005, and prior to that maintained a decades long history of providing student housing. As of Q422, industrial enjoyed a near all-time high occupancy rate at 96.1% and annual double-digit rent growth of 11.1%. At 23 years old, the youngest of the millennials are now out of college and entering the workforce and beginning to come full-steam in the undersupplied housing markets. 1-800-3-NAREIT Alternative Investment Coach reports that most student housing REITs invest in schools that have larger student capacity.
Campus Housing REIT - Forbes Build sustainable portfolio income with premium dividend yields up to 10%. I wrote this article myself, and it expresses my own opinions. This helps to ensure that even during times of lower student enrollment, the demand for housing is the most likely to be strong. Our halls are available at 11 a.m. and 3 p.m. Monday through Friday for private in-person tours of the residence halls.
Student Housing Investment REITS - Investment Companies and Turning any of these cookies off may affect your experience of the site. This is an abridged .
Student Housing REITs: Spoiled By The Millennials With over 40,000 people working across more than 70 countries around the world, we'll always have an expert who is local to you. After two years of disappointing share price performance, American Campus outperformed the broader REIT average in 2018, returning nearly 5% compared to a 4.6% dip in the broader REIT index. Below, we see the enrollment trends from the last several years from the National Student Clearinghouse Research Center. Nothing on this site nor any commentary published by Hoya Capital is intended to be investment, tax, or legal advice or an offer to buy or sell securities. These real estate companies have to meet a number of requirements to qualify as REITs. While the large development pipeline of American Campus has added some "beta," student housing REITs have historically been one of the most "bond-like" REIT sectors, responding more closely to movements in long-term interest rates (IEF) than movements in the S&P 500 (SPY). Student housing REITs are perhaps the most recession-resistant REIT sector based on past correlations with movements in interest rates and the broader equity market. Disclosure: Hoya Capital Real Estate advises two Exchange-Traded Funds listed on the NYSE.
Hoya Capital, its affiliates, and/or its clients and/or its employees may hold positions in securities or funds discussed on this website and our published commentary. A microcosm of the trends seen across the REIT sector over the last four years, the student housing REIT sector has been gobbled up by the private markets, but we see a potential reversal of that trend given the REIT Rejuvenation this year which has restored the critical NAV premium for most REIT sectors, a critical prerequisite for accretive acquisition-fueled external growth. Savills plc, incorporated and registered in England and Wales. We want to create an environment to complement academics with our own programming and social, cultural, educational and recreational activities, he says. Student housing REITs have historically been one of the most countercyclical real estate sectors as student enrollment trends are typically inversely correlated with job growth. 1 / 11 Credit Seven REITs to own in a rental market downturn. Student housing assets, especially off-campus units that are not part of a University partnership, are also exposed to changes in University housing policies that can result in significant asset impairment. Student housing facilities are generally rented "by-bed" rather than "by-unit" and there is generally a much shorter "leasing window," as beds that are unfilled at the start of the school year are likely to sit vacant until the next school year. This is an abridged version of the full report published on Hoya Capital Income Builder Marketplace on April 30th. Instead, Rollins says two dynamics influence off-campus housing: obsolescence of available housing and the fact that demand exceeds supply. As we stated above, the sector trades at an estimated 0-10% discount to NAV, far better than the 20%+ discount it traded in early 2018. Concerns regarding rising tuition costs are overstated by the widening gap between sticker prices and net costs. In spite of the thousands of new living spaces built for students in the past decade, Bayless notes that only 20 percent of antiquated student housing has been replaced. These REITs have gotten back into their stride after 2013, he says. With Demand Outstripping Supply, Industrial Remains a Darling Sector. Information presented is believed to be factual and up-to-date, but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. While risks related to slowing enrollment growth and still-elevated levels of supply growth remain, we remain optimistic on the long-term secular growth story related to the modernization of the physical and functionally outdated student housing stock and like American Campus' high-quality portfolio of on-campus and near-campus facilities. Since its IPO nearly two decades ago, American Campus has been the pioneer of the institutional student housing ownership and development model. For instance, we have rates ranging from a shared room at $499 to a private, one-bedroom penthouse unit at $1,200 in the same building.. Readers should understand that investing involves risk and loss of principal is possible. This is good news for new investors as the prices are lower, and with the re-opening of schools across the nation represents an opportunity to buy at a good price and reap the benefits of a rebound. Churchey says EdR invests only at schools with at least 10,000 full-time students. 10 Reasons to Avoid Newark Airport at All Costs. In November 2019, it spent 1.4 billion to buy up privately-owned student housing provider Liberty Living Group plc, from the Canada Pension Plan Investment Board. Rent growth is expected to rise by 2.3% this school year compared to the 3.8% blended rent growth achieved by the apartment REIT sector in the past quarter. Occupancy rose 220 basis points to 90.6% while operating margins ticked up 10 basis points year-over-year. REITs that operate in property sectors with long-term leases might be dismayed at the prospect of an 80 percent or higher tenant turnover every year, but student housing managers know how to handle the churn of residents. We are known for our positive, entrepreneurial culture, and for attracting some of the most innovative, dedicated and knowledgeable people in the business. investing ideas These Are The 10 Best Residential And Apartment REITs To Buy For Income! Nareits REITworks, taking place June 28-29 in Las Vegas, is the premier sustainability meeting for REIT and CRE professionalsoffering educational sessions, dynamic speakers, and engaging roundtable discussions on the latest environmental stewardship and social responsibility trends in the industry.
2023 CRE Sector Update: Student Housing | Inland Investments Take a Crash Course in Student Housing Investments - U.S. News Residential REITs include REITs that specialize in apartment buildings, student housing, manufactured homes and single-family homes. This commentary is impersonal and should not be considered a recommendation that any particular security, portfolio of securities, or investment strategy is suitable for any specific individual, nor should it be viewed as a solicitation or offer for any advisory service offered by Hoya Capital. Were focused on building in the best location with the best amenities within a broad range of rental rates.
Student Housing REITs: It's Not Goodbye, It's See You Later Investments in real estate companies and/or housing industry companies involve unique risks, as do investments in ETFs. Find out more about targeting and tracking cookies here. Savills offers a wide range of specialist services from financial and investment advice to valuation, planning and property management. Although operating within the same narrow vertical, the stock exchange-listed student housing REITs have each carved out targeted niches. Up-to-the-minute news from our press teams providing the latest developments within Savills, and across the property industry. Current portfolio represents 34 communities and 11,000+ beds at 22 universities in 17 US States. Whatever your needs, we have someone who can help. At 23 years old, the youngest of the millennials are now out of college and entering the workforce and beginning to come full-steam in the undersupplied housing markets. While we don't believe a recession is imminent, we do view ACC as a hedge against an unexpected downturn in economic growth.
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