Day 1 - Student Housing Research

Today I started with looking at Market Research for Student Housing in Dallas. The question is: Is student housing in Dallas a good place to be investing right now? The Sperry Van Ness Report shows increasing cap rates for student housing in the last quarter of 2009- statewide. However,for the Dallas specific are, CBRichard Ellis forecasted that multi-family housing cap rates would decrease by 50 basis points in the beginning of this year (2010). Considering the cap rates are slightly decreasing, we need to show investors that our numbers work, even in a "flat or slightly decreasing cap rate" environment.

The "Real Share"Student Housing conference quotes the National Center for Education Statistics: "More and more students are enrolling in colleges and universities away from home – as a result, student populations continue to surge at many colleges and universities. The National Center for Education Statistics expects college enrollment to continue setting new records throughout the fall 2009 through fall 2017 period. Despite the best efforts by academic officials to add new housing facilities, supply is simply not meeting demand."

Here's what the Wall Street Journal has to say about Student Housing REIT's (Sept. 15, 2010 http://finance.yahoo.com/news/Student-Housing-REITs-Are-Low-twst-231852081.html?x=0&.v=1):

" TWST: What are your favorite apartment REIT names right now and why?

Mr. Levy: Right now I really like the student housing REITs, Education Realty (EDR) and American Campus Communities (ACC). I think that the fundamentals have to some degree been left behind in the recovery because they didn't get hit as hard. Given an uncertain economic outlook, all the fears of double-dips and whatnot, you don't have to worry about that with student housing. They're relatively recession resistant, and they're trading at discounts to the group average. EDR in particular is a turnaround story; so they trade at the highest implied cap rate in the group and one of the lowest price-to-AFFO multiples."

Obviously, this is REIT's not the actual physical property. So, I guess I have a bit more research to do, and specifically in the Dallas, Fort Worth market, to see where the greatest needs are, and how viable this investment type is at this time...

The second question is: which schools need more housing? That is my next informational quest.