We are a Chinese developer that has done a couple of multifamily developments on the West Coast. We have taken notice of the increased activity in the student housing sector and are looking at a couple of opportunities around major research universities in the Midwest. What is fueling this surge in new student housing development and what are some indicators about the future of this trend?
Student housing goes through waves of popularity. Some college communities lack student housing; other projects are driven by students who can afford better accommodations. The strength of the local market is what really matters- direct your research in that manner.
You answered it yourself... demand! US is getting a massive inflow of foreign students mostly from Asia, which is fuelling the student accommodation development demands and further, funds are shifting DNA to accommodate the trend, which I believe will be a long and profitable trend. Such accommodations have to be properly structured in terms of economics in order that minimum headcount is met to turn to profitability. Try to avoid leased land and try to have solid collateral in place as that drives the appetite of the equity investor and debt lenders comfort.
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