Rent Growth Hits Another High in Fall 2023 Pre-Leasing Season
The Fall 2023 pre-lease season has hit yet another accolade for pre-lease occupancy, and annual rent growth reached an unparalleled rate of 9.5% in February.
Over 58% of student housing beds at the core 175 universities tracked by RealPage Market Analytics were pre-leased for the Fall 2023 academic year as of February, marking the highest February reading on record by a wide margin. In a more typical February, pre-lease rates hover around the halfway point of 50%, except the COVID-impacted year of 2021 when February’s pre-lease rate was about 40%.
Pre-leasing ran tightest at pedestrian properties within a half mile to campus where February’s pre-lease rate hit 60.4%. Properties within a half mile to one mile of campus had a pre-lease rate of 53.2% in February, compared to a 55.2% pre-lease rate at properties over one mile from campus.
Meanwhile, Fall 2023’s annual effective rent growth towers head and shoulders above previous years, even considering last year’s substantial rebound. Annual effective rent growth hit 9.5% in February, the third consecutive month of 9%+ rent hikes. For comparison, a typical pre-pandemic year saw rents grow between 1% and 2%, on average. Fall 2022’s annual effective rent growth ended up around 6% at the tail end of the pre-lease season.
Across distances, rent growth was very strong, ranging from 8.4% annual increases in properties within a half mile to one mile of campus to 9.8% growth in properties within a half mile to campus. Properties over one mile from campus experienced annual rent growth of 9% in February. Schools with the highest rent growth tended to be large flagship universities in the South and Sun Belt regions, such as the University of Arkansas, Florida International, Arizona State, University of Arizona and Baylor University.