The student housing market had a remarkable comeback during the past two year, achieving record-breaking preleasing rates and rent growth. However, investment activity slowed down in 2023, as high interest rates continue to impact investment activity.
On a national level, a total of 66 student housing properties changed hands year-to-date through October, compared to the 200 that changed hands at that point in 2022. Across all U.S. markets, the average price per bed fell from $76,095 last year, to $71,703.
Based on the latest Yardi Matrix data, here are the top five markets with the biggest student housing sales volumes in the nation in the first 11 months of 2023.
5. Columbia, S.C.
The Columbia market includes student housing communities serving the University of South Carolina-Columbia, South University-Columbia, Columbia International University and Benedict College. As of November, eight completed properties totaling 4,170 beds had changed hands, amounting to a transaction volume of $229.8 million. The market's total sales volume was down compared to the 506 million registered in the same period in 2022, but was higher than in 2021, when it reached roughly $125 million.
The average price per bed hit nearly $55,100 year-to-date, making Columbia the cheapest market on our list. Prices were significantly lower than in 2022 and 2021, when they averaged at $90,600 and $82,470 per bed, respectively. The average price per square foot was $134.
In March, RREAF Holdings LLC picked up the 486-bed Rivers Edge at Carolina Stadium in Columbia. The seller, RPM Living, purchased the property near the University of South Carolina in 2016 for $30.5 million.
4. Eugene, Ore.
The Eugene student housing market gravitates near institutions, such as Willamette University, University of Oregon, Western Oregon University, Oregon State University and New Hope Christian College-Eugene. In the first 11 months of the year, the market’s transaction volume reached $318.3 million, outperforming last year’s $46.4 million, additionally to 2021’s $158 million.
A total of 2,528 beds changed hands year-to-date through November, some 1,360 beds more than in the same timeframe in 2022. The average price per bed increased since last year, to reach $125,918— marking an 8 percent hike year-over-year.
In February, Kingsbarn Realty Capital purchased Ducks Village, a 650-bed student housing community in Eugene. Topanga Management Co. sold the 22-building asset for $59.2 million. The student housing property is across the Willamette River from the University of Oregon campus.
3. Phoenix
Year-to-date through November, the Phoenix student housing market recorded a total sales volume of $688.8 million, with four properties or 3,304 beds changing hands. The metro's total sales volume saw a sharp drop since last year, when in the same period it reached $1.4 billion.
The average price per bed clocked in at $178,208, making Phoenix the second priciest market on our list. Properties traded at a higher average price than in the same timeframe last year ($138,086), but lower than 2021 ($184,461).
The metro’s main higher education institutions include Arizona State University, Bryan University, Brookline College-Phoenix, The School of Architecture and Ottawa University-Surprise. Nearly two years after completing Canvas Tempe, an 826-bed student housing community Arizona State University in Phoenix, Toll Brothers Campus Living and Harrison Street sold the asset last May. University Partners picked up the luxury property for an undisclosed price.
2. Tallahassee, Fla.
The Tallahassee student housing market centers around institutions, such as Florida State University, Florida Agricultural and Mechanical University. The total sales volume in the region in the first 11 months of 2023 reached $589.3 million—roughly 3.5 times higher than in the previous year, but nearing the $624 million recorded in 2021 at this point. The average price per bedroom year-to-date through November was $57,131, slightly lower than in 2021 ($62,472) and making it the second cheapest metro on our list, after Columbia.
In one of the largest deals of the year, FPA Multifamily purchased Seminole Grand, a 1,557-bed student housing community in Tallahassee. The Collier Cos. paid $68 million for the property. In another noteworthy deal in July, Balfour Beatty picked up the 592-bed Oktiv student housing property in a $51.4 million deal with Tailwind Group. Berkadia arranged the $33.3 million acquisition loan.
1. Atlanta
First on our list, the Atlanta market boasts the longest list of universities across the top five, comprising institutions, such as the American InterContinental University-Atlanta, Clayton State University, Strayer University-Georgia, Luther Rice College & Seminary, Life University, Atlanta Metropolitan State College or Georgia State University.
Between the beginning of January and the end of November, Atlanta’s student housing sales volume was by far the highest in the country, hitting $1.73 billion. A total of 29 communities changed ownership, with 17,231 beds sold. Deals in the market were scares last year, when in the first 11 months investment volume reached only $164 million. In 2021, deals totaled $907 million.
The average price per bed in the market spiked from the $42,960 recorded in 2022 to $197,434 year-to-dat through November, making Atlanta also the priciest metro for student housing transactions.
In September, Campus Realty Advisors acquired The Beacon, a 456-bed, 158-unit student housing community in Marietta, Ga. Located near Kennesaw State University’s Marietta campus, the property came online in 2022.
