Private equity thinks student have money for them

[Hibush]

The Wall Street Journal reports that PE firm Blackstone will buy student-housing owner American Campus Communities for $12.8 billion, a bet that rents will continue to rise as more college students return to campus.
"the sector looks poised to benefit from a number of tailwinds. There is relatively little new student-housing construction, which means that property owners face little new competition. A national housing shortage is pushing up rents near campus."
Another PE firm, Brookfield is making similar, though smaller, purchases.

The opportunity that they see seems at odds with many views of how much cash one can squeeze out of undergrads. The example schools were Arizona State and UC Berkeley, both of which are trying to manage the infrastructure for their large and rapidly growing enrolments. Perhaps they are not buying in small-town Willamette Valley or sourthern Vermont.

Regarding the WSJ paywall, check with your library. You may have acccess.

[dismalist]

This only makes financial sense if there is little or no new housing supply. [Additional demand is there, the investors think. Apparently, the undergrads on average are willing and able to pay.] That's a malediction of most US housing markets now, not just those for students. The root is zoning which restricts new building in size, amenities [parking], height, density, even location [California], and other characteristics.

As usual, the problem is us! :-)

[Wahoo Redux]

This sounds insane from where I am sitting now.  Our enrollment has been steadily dropping just as private rental companies decided to build new student housing next to campus.  Then COVID hit.

Guess that's the difference between U Arizona and UC Berkeley and our sad campus.

[Anselm]

I knew someone who lived in one of these giant apartments near a campus, owned by some absentee landlord.  He told me that they would force you to move into another apartment on short notice.

I get the feeling that these private equity firms will end up owning the whole country. A local concern right now is that they are buying up the trailer parks and jacking up the rent.