Student Housing Pre-Lease Rates in July Surpass Pre-Pandemic Norms

If the last couple months of student housing performance caused a sigh of relief for operators, July’s results might cause a jump for joy.

In July, pre-lease rates hit 86.7% across the core RealPage 175 universities. That result registers higher than 2020 and 2019’s July readings, marking the first time that pre-lease rates outpaced their pre-COVID reading.

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In July 2020, pre-leasing registered at 81.9%, and in July 2019, pre-leasing registered at 85.6%.

From June to July, pre-leasing jumped 9.9% in 2021, the largest monthly jump recorded this late in the season in years. Given the current standing and robust monthly gains, it seems all but certain that final pre-leasing, which ends in August, will hit the 90% threshold. Confidence in the student housing sector has come a long way since February and March when pre-leasing and rent change were underwhelming at best.

Rent growth also hit its highest rate in July. Effective asking rents were up 2.1% annually in July, again led by properties more than one mile from campus. July’s rent growth also registers above the July 2020 and July 2019 rates.

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Properties more than one mile from campus claimed 2.7% annual rent growth, the highest rate seen in several years. Rent growth at properties within a half mile to one mile of campus was 2.3% in July, compared to 1.8% at properties within a half mile to campus. Though that reading at close-in properties weighs down overall performance, rent growth across all distances is strong and, in most instances, higher than both 2020 and 2019 readings.

In another positive reading, pre-lease rates at individual schools looks healthy. Among the core 175 universities, there are virtually no true pre-lease laggards. Only three schools register pre-leasing below 50%, and 12 schools report completely full pre-leasing as of July. This is another indication that most schools have rebounded from pandemic lows and expect a more normal school year.