For prominent student housing developers, June represents an intense month where a dual focus is necessary. Collegiate builders must concentrate on wrapping up construction and preleasing projects slated for fall 2015 while also breaking ground on properties tabbed for fall 2016 completion.
According to data from Axiometrics Inc., collegiate firms will deliver more beds in 2015 than in 2016 — which is another way of saying fewer projects will start in 2015 when compared with last year. The data firm estimates that fewer than than 50,000 beds will be delivered in 2016, with roughly 50,100 beds delivered in fall of this year.
Both these totals represent overall decreases in beds delivered when compared to fall 2014 and 2013, when 63,000 and 60,000 beds were completed, respectively.
This decrease in completions, coupled with projected enrollment increases, is creating a healthy balance between supply and demand, which should equate to rent growth and solid leasing velocities during the summer.
As of April, student housing properties had already preleased an average of 67 percent of their beds for the fall 2015 semester, up 250 basis points from the same time in 2014.
Rents are also growing quickly, at an average rate of 2.1 percent.
Public-private partnerships and projects at universities with fewer than 10,000 students will account for a larger portion of 2015 groundbreakings. Several REITs along with larger collegiate builders will lead the way when it comes to public-private deals, which are typically located on campus or adjacent to a college.
This month, Balfour Beatty Campus Solutions will start the second phase of a project at the University of Iowa.
American Campus Communities has public-private deals underway or slated to start at four or five universities, including Butler University, Northern Arizona University and the University of Southern California.
And more than half of Education Realty Trust’s 2015 and 2016 delivers will be on-campus deals.