Have you ever thought of investing in a student housing model? Today, Zachary Feldman talks about why investing in the student housing space is a viable endeavor. Zachary is the Vice President of Aptitude Development, and the CEO and Founder of ENJOI 77 Holdings. At Aptitude Development, they focus on the student sector, doing ground-up student housing across the country.
Here are some power takeaways from today’s conversation:
Episode Highlights:
Are Colleges Going Out of Business?
There’s a huge misconception from the headlines that colleges are going out of business. But there are great state schools and state school systems, which are seeing a lot of growth.
In fact, student housing has historically been known as the most recession-resilient asset class in the real estate sector. The reason being, during times of economic hardship, most people go back to school. And you see a massive jump in enrollment when you cannot get a job in the economy. For instance, in 2008, enrollment across the board skyrocketed.
And we're seeing today how student housing has the second-highest collections in the country, behind industrial. It’s actually performing better than multifamily, senior housing, or any other type of asset class. They saw collections between 92% and 94% as an industry in March, April, and May when no one was on campus. With parents as the guarantors – and this is the reason the student housing model works.
40% to 60% of the student houses are still occupied because these kids don't want to live with their parents. The hybrid model has been great so far for the schools that are executing on it. But schools are probably fully going back in session next fall through late spring.
What is the Student Housing Model?
Student housing is essentially a high-quality ground-up housing for kids to live in. So instead of a five-bedroom frat house or a beat-down building, students can enjoy a four-bedroom fully-furnished private space.
All students need to do is show up with only their suitcases and have all of their best friends have their own private space. They have their own bedroom, own bathroom, and shared living space. Instead of a business center, the building will have a lot of study rooms so students won’t have to fight for space, as well as areas designed for kids to utilize and enjoy.
Resources Mentioned:
Call Zachary at 781-789-4354 or email him at zf@aptitudere.com.
