Student Housing Investment Opportunities For Family Offices 

Collaboration Between Family Offices And Asset Managers Is Essential In Identifying And Executing Lucrative Real Estate Opportunities
Paul Feinstein, CEO and Founder, Audent Global Asset Management
Paul Feinstein, CEO and Founder, Audent Global Asset Management

In recent years, there has been a noticeable surge of interest among family offices toward alternative investments, particularly in the realm of real estate.

According to recent data from FINTRX, 60% of family offices are actively involved in real estate ventures. Within this landscape, student housing investments specifically have emerged as a promising avenue for generating stable returns and diversifying portfolios.

Student housing presents a mixed bag of complexities and opportunities, with collaborative efforts between family offices and asset managers playing a pivotal role in navigating this booming market scene. Yet despite the growing awareness of the potential benefits of student housing investments among family offices, many may not fully grasp the lucrative opportunities available in this sector.

The Allure Of Student Housing Investments

The trend of investing in student housing has been gaining momentum for some time now. It has provided a natural box for family offices looking to diversify their investments to fit into. With a focus on more seasoned and stabilized assets, family offices are actively deploying capital in search of forward-thinking investment opportunities such as real estate development projects like student housing.

Strong potential student housing investments exist in the Northeast and East Coast.

Breaking free from the mold of traditional real estate ventures, student housing investments are particularly alluring due to the increasing number of students living on campuses and the expanding requirements of educational institutions.

In fact, the number of college students in the U.S. is projected to reach 19.25 million in 2024, with an average 95% occupancy rate in the best universities. Ingredients such as a robust student body, strong endowments and thriving sports programs contribute to the attractiveness of this market segment.

We’ve notably found a strong environment for student housing investments in the Northeast and East Coast regions of the U.S., but that’s not to say that there aren’t opportunities elsewhere. Student housing is hot and there’s a lot more potential on the horizon, given their compelling returns and strategic proximity to campuses.

The momentum toward new developments and repurposing old assets also underscores the potential of this investment avenue. At the start of 2023, roughly 124,000 beds across universities were in various stages of development.

Navigating The Frontier Of Student Housing In Portfolios

Investing in student housing properties is a balancing act, with factors such as saturation, turnover rates and seasonal demand requiring careful consideration. Despite these deliberations, the willingness of parents to pay a premium for student housing, often considering it an extension of tuition fees, provides a stable cash flow stream.

Comparatively, multifamily properties come with a lot more selectivity on the resident’s behalf. While the supply-demand dynamics may differ from traditional real estate, student housing’s rent growth, averaging 4.9% year-over-year, offers the potential for high yield and stable returns, making it an attractive investment for family offices seeking to construct resilient and diversified portfolios.

In general, real estate assets play a crucial role in building portfolios, providing steady cash flows and diversification benefits. In a market where different asset classes behave differently, student housing adds an additional layer of stability and wealth generation.

Collaboration Between Family Offices And Asset Managers

Collaborative efforts between family offices and asset managers are essential in identifying and executing lucrative real estate opportunities that meet the family office’s desires. Asset managers serve as a trusted resource, offering valuable insights, deal flow and financial education tailored to the unique needs of family offices.

Family offices often need direction when it comes to student housing investments. Moreover, student housing is not a “one size fits all” investment. This is where asset managers step in. Each family office should be approached case by case to understand their specific objectives and preferences.

Family offices often need direction when it comes to student housing investments.

Asset managers work with each family office to provide holistic solutions, considering various investment silos and long-term goals. While family offices often engage with multiple investment houses, they seek partners who can provide the expertise for their specific interests, such as real estate.

Overall, student housing investments present significant opportunities for family offices to collaborate with specialists for stable returns and portfolio diversification. Despite any market uncertainties we may confront over the next few years, the appeal of student housing investments remains strong.

As the wave of interest in this sector continues to grow, I would encourage family offices to explore student housing as part of their wealth journey. It’s a golden opportunity just waiting to be seized.

Paul Feinstein is CEO and Founder of Audent Global Asset Management

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