Purpose-built student housing developments provide the opportunity to invest in assets supported by robust demand and limited competition.
Demand for student housing is being driven by the demographic wave represented by the Echo Boom generation. Total college enrollments increased 33% to over 20 million students in the ten years from 1999 to 2009. These increased enrollments have put pressure on schools’ ability address outdated and inadequately sized on-campus housing.
While the need for student housing is growing, increased budget constraints have resulted in colleges focusing available resources on educational programs and research, leaving limited, if any, resources to upgrade or build additional housing. As a result, schools are increasingly relying on private owner/operators to offer purpose-built student housing. Because student housing’s special purpose nature requires different operational expertise and supports more limited and restrictive financing options, this market segment has less competition than conventional segments of the multifamily market.
The Bridge Partners business plan includes buying well-located, first-generation, purpose-built student housing assets where new capital investment would support re-positioning. Bridge Partners is also interested in purchasing the underlying debt of student housing properties.