Student Housing Attracting Investment in the Billions | Real Estate Investment News

Record Investment in Student Housing in 2018?

2016 was a record year for student housing in the US. $10 billion was poured into investment grade student housing projects in the US. It was a 64% increase over 2015 investment numbers.

One report suggest 2017 totals will equal 2016’s torrid levels. Is there more gas in the tank for the student housing investment sector in 2018?

According to ARA Newmark Student Housing Group’s 2016 overview, $9.33 Billion of the 2016 total was directed toward the acquisition of investment-grade student housing assets priced above $10 million. This means the total market is much bigger.

Add to that the even more impressive numbers in cities like Vancouver and you have a huge and growing investment pool serving the student housing market in Vancouver Canada. The Canadian Economic Forecast is very positive too for 2017 and 2018 and that will make investors more eager to get into condo construction and the rental market.  Yet the Vancouver condo market has many pressures on it.




No more Animal House – This is a Worthy Investment Asset

“More institutional investors are looking at student housing as a viable investment thanks to rising demand that continues to outweigh the current supply” — report from Forbes Magazine

Why the Boom in Student Housing in the US, UK, and Canada?

Why the big interest in student housing investment? It’s a global phenomena and the underlying demographics appear to be fueling demand. That’s drawing money from top investment funds.

  1. Echo boomers in particular are the key age group pushing the numbers. Enrollment is up to 20 million students in degree granting institutions alone.
  2. US state governments are withdrawing funding for higher education
  3. US housing and Canadian housing is at record low availability, and a private investment driven housing solution was needed.
  4. Investors are liking the ROI are ready to sink their money into student housing in 2017 and beyond.
  5. Low interest rates
  6. Student housing is less vulnerable to economic swings and recessions
  7. Institutional funds are moving in because they’re less interested in traditional asset classes

Interest in student housing has been growing steadily, as more investors look towards less traditional asset classes within commercial real estate. Much more institutional capital has entered the student housing space as of late,” — from a report in realtor.org.

Add low interest rates and willingness for big investment firms to participate, and you have record growth for student housing investment. Big foreign investment fund managers want in too. Recently, the Canada Pension Plan and a Singapore Investment group purchased $1.6 billion of properties in the US.

Anxious times for UBC Students Under Pressure

And the trend isn’t isolated to the US and Canada. Knight Frank reports  that purpose-built student housing projects are peaking in the UK too.

Investor demand for student accommodation blocks is so strong that some potential buyers were forced to stand during presentations at a student housing investment conference in a ballroom in Covent Garden, central London this week – from a report in the Guardian .

In terms of risk, this student housing investment sector is less sensitive. Unlike apartment rentals, renters have the financial means and are not deterred by employment fluctuations.

Rental growth in the sector has proven to be less volatile than that of conventional apartments — partially as a result of the sector being less economically sensitive. Results for some of the largest players in the market show rental growth volatility, as indicated by the standard deviation, was lower than conventional apartments, and capital expenditures are in line with those of conventional apartments,” said Tom Park, senior director, strategy and research, in a statement from irei.com article .

Foreign students are driving part of the demand too. They’re hungry for college and university degrees and their parents are willing to pony up the high price for a North American degree. These students emanate from China, Japan, Vietnam, Malaysia, Dubai, United Emirates, Brazil, Columbia, Mexico, and India.

Why is Vancouver so Popular in the Purpose Built Student Housing Market?

One notable one might be the preference of the lucrative foreign student market for the city of Vancouver. Anti-foreign policies by President Trump, high cost of living, and anti-immigration sentiments in the US are deterring foreign applicants. Vancouver is well known to Pacific Rim countries, offers a friendly atmosphere to foreign students, particularly from Asia, and Canada allows many foreign students to work and immigrate to Canada.

Add to that the lifestyle in Vancouver with its mountainous seaside communities and recreation opportunities, and the draw for wealthy foreign student’s families is complete.

Colleges and Universities in Vancouver

The Vancouver area is home to at least 12 colleges and universities serving a densely populated in the region. The institutions include Capilano University, Emily Carr University, Fairleigh Dickinson University, Kwantlen Polytechnic University, New York Institute of Technology, Trinity Western University, Langara College, OMNI College, Simon Fraser University and The University of British Columbia (UBC).

Viva Hotel Tower purchased by CIBT and converted to luxury student accommodation. Photo courtesy of studenthotel.ca

Student housing communities can serve many schools simultaneously which makes them more attractive to investors. The cities of Richmond, Surrey, Burnaby and downtown Vancouver are central to these colleges and universities and are close to Vancouver’s major transit line.

Vancouver is in the midst of a severe housing shortage with near zero vacancy rates. That has perked housing investor’s attention. And it would explain why property investment firms such as CIBT have grown so fast. CIBT picks up the equation even further by bringing commercial services in as part of the money making scenario.

For investors, the student housing investment climate is a very attractive and potentially lucrative one. It might one to add to your investment portfolio for 2018.

The 2018 US housing market is looking a little flat, while the Vancouver housing market continues to show strong growth activity. Something to think about.

*This post is not intended as professional investment advice. Prospective investors should speak with a licensed investment advisor and review closely the prospectus of any student housing investment fund.




Student Housing Investment Canada | Vancouver Condo Market UpdateCanadian Economic Forecast | Student Housing Shortage |  Student Housing Vancouver | Investing in Student Housing | Student Housing Off Campus | Are Student Housing REITS a Good Investment?Housing Market Vancouver | Vancouver Condos | Best Real Estate Investment | Doing Business in Vancouver | Toronto Condo Forecast 2018Auto Insurance Vancouver | Vancouver Real Estate Marketing | Calgary Housing Forecast 2018 | 2018 Stock Market Predictions

It’s a fast growing investment opportunity.   To learn more contact Joyce Soo of Sutton Seafair Realty in Vancouver BC (604) 273-3155.

Outsourcing Marketing to India is Killing our Businesses

After you Outsource Marketing to India, What’s Left?

In the current yet long running outsourcing IT and customer service to India craze, companies are hoping they can outsource marketing to them as well. Although coding might be okay for Indian providers, marketing is where they fall flat on their face.

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Yes, even McDonalds is outsourcing to India

Marketing communications is subtle and person, therefore a typed script, a code bloated app, or blasting out timed broadcast spam email just doesn’t cut it.  Personal is a frightening word to Indian companies. Some IT people see marketing as a subtask of IT, but that is completely ridiculous.

Marketing’s value and success in the social media era is about the subtlety of personalized human to human, real time online engagement. That’s something Indian companies can’t do, yet they’d like to have you outsource marketing to them.

Through many years of networking and working with clients, I’ve learned that if there are any Indians on staff, it will be unlikely that my company will be chosen for digital marketing. And if my company is chosen, it’s short lived and an Indian company will get to build on my quality efforts.




Indians will only Work with Indians

I wrote this post after speaking with yet another Indian IT manager, whom if you don’t know, try to influence managers to outsource digital marketing to their connections in their motherland quoting cheap costs.  Vulnerable CEOs are too quick to think they can take the heat off by outsourcing to India.  You can see how this is a negative signal — of last resorts for a manager in trouble. In contrast is the choice to hire a North American digital marketer with the ability to connect and touch prospects emotionally. There’s no reason to pull punches here. This is a big problem that’s growing.

Relying on cheap Indian digital marketing tactics is having a significant depressing impact on British and North American business competitiveness and GDP.  US trade deficit with India is rising fast at 24 billion dollars. Maintaining our international competitiveness means taking care of our marketing ourselves. India should not be controlling our marketing.

I Bought this Garbage Cheap!

If you shop at Walmart, Tesco, ToysRus, Costco, or Walgreen’s, you see wall to wall cheap plastic products from China (especially at Xmas) which get little or no use and end up in your local dump. The same thing is taking place online with Indian IT marketeers. They create digital junk whose value vaporizes quickly. I’ve worked with them in the past and learned this truth from experience. They’re the digital IT candy store that leaves you with profit cavities.

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Photo courtesy of outsourceportfolio.com

When companies use Indian IT marketeers, the value is temporary and leaves your customers feeling awkward, misunderstood, uneasy, and uncomfortable which erodes customer loyalty and brand value. When results drop, you’re left to ask them to fix it. How ironic? Their content is always along the lines of tech talk and is boring, uninformative, and actually ruins your carefully, laser-etched brand image. It’s corrosive of everything you’re building.

As the stats reveal, the outsourcing of IT and customer relationships to India is dangerous to our long term economic health and our own career opportunities. It’s only natural that India would try to tie marketing to IT.  It’s the best way to infiltrate another sector of our economy.  But indian IT leaves no satisfaction when it comes to the world of marketing which is becoming more personalized.

Why Indian Providers Fail

  • the work is of poor quality – you get what you pay for
  • work is not tailored to the local business
  • results are not organic – they’re manufactured and against Google’s link guidelines
  • non-organic networking creates poor quality leads which leads a business down the wrong road
  • lack of understanding of American or British personality and nuance
  • lack of understanding of American/British values and reasoning
  • results are often designed to provide short term value only so you’ll return to pay them more
  • they possess an unsavoury digital soul devoid of real human stories and interaction
  • time delay causes huge administrative headaches and worsens miscommunication issues
  • offshoring branding and traffic access makes a company’s control of their future tenuous
  • Indian staff here favor only Indian subcontractors whether they’re competent or not

Poor Performance Factors – Cloaking the Truth

india-outsource
Photo courtesy of ndtv.com

Poor performance from Indian firms goes well beyond grammatical and spelling errors. There is a whole issue of semantics that they can’t comprehend. Big telecom companies are cloaking the cultural and linguistic dissonance using formal customer service scripts that take the emotional and human element completely out of it.

By taking the human to human experience out of it though, and turning it into a robotic exercise driven by marketing automation, they cripple their ability to be taken seriously by customers. Consumers are being treated like mindless automatons who devour simple, mechanical messaging dished out in conveyor belt fashion.

Consequently, customer satisfaction is taken out too. And if you’ve ever spoken with Indian customer service reps for half an hour to solve a small tech issue (while they try to sell you the upgraded package that saves you money scam), you understand how exasperating it is. Big companies with monopoly positions only want cost savings and they’re willing to take a big hit in brand destruction to make those extra dollars. It’s not a good tradeoff.

Cheap is Never Good

Indian marketeers are unable to express the subtleties of a company’s value proposition and branding in personal, human terms that make it work meaningfully with North American and British customers. They don’t understand our culture so they hide in technology. They fail terribly at social media where they must connect with, interact and engage meaningfully with British or North American audiences. But don’t think for a minute that Indian companies are turning a blind eye to social media. Social media CRM chat apps, using English names, and phony photographs are their trojan horse.

In lead generation, the cheap traffic they build to websites is the least qualified, often time-wasting type that erodes marketing staff morale and which then creates disillusionment and suspicion that someone like myself has to deal with afterward.

Targeting the Bottom of the Barrel Leads

Choosing an Indian provider is a sure sign that a company is not targeting the 20% audience that comprise the best prospects. Indian companies look for easy, low hanging fruit via IT tactics that a company could get on its own. The style of Indian companies creates a rift between marketing and the company, and corrodes the company’s brand image.

And this is all under the banner of cheap, something for nothing promises that Indian companies thrive on. When indian link builders generate inbound links, they are all too often of poor quality that actually drags down company search engine rankings. Then when a North American digital marketing company comes in, they have to undo the harm created.

Instead of cost cutting on critical digital marketing functions, it might be wise to reorganize staffing to create a budget for them. The hiring of Indian companies is an insult to digital marketing because it means marketing comes last in the priority hierarchy and must operate with minimal budgets and respect. As an example, link building is the most important SEO task, yet when clients hear the phrase link building, they imagine $10 paid links comes to mind. And indian links always disappear.  Copywriting? Graphics? Always embarrassing.

Trump Says “No More”

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Despite his new building in Mumbai, Trump is steadfast on his goal of revitalizing the US economy and trade balance. Photo courtesy of Wall Street Journal

Donald Trump, the next US president is talking tough about restricting NB1 Visas which pull Indian workers into the US. Trump’s pro American talk is gaining momentum. Outsourcing to India and having Indian companies such as Tata Consultancy Services, Infosys and Wipro bring workers into the US is a highly contentious issue. But it really highlights how extreme the Indian problem has become.

I doubt you’ll argue that your marketing is your company’s future. If that’s true, then hiring Indian firms suggest your company is heading in a downward spiral. You can pull out of the deathspin by giving projects to capable North American or British marketing firms who can and will develop the right emotional messaging, branding, and engagement with customers and prospects.

How we can rid ourselves on the Indian marketing problem is to put a heavy accent on real time engagement and the emotional, cultural subtleties that make customers happy. Real time engagement is powerful in converting leads but that happens when a customer is speaking with a peer in their world. Customers want meaningful experiences, those that connect to their daily life experiences. That’s what social media is all about.

Social media’s rise shows how important social connections are to us, whether business or personal. Customers want genuine people and companies to connect with. Your transparency using North American or British providers means your customers will trust you more. Trust, likability, and expertise they can relate to personally is vital to business success today.

Hire a Canadian, US, or British firm and connect with real people worth knowing and engaging with. The success of your company, agency, brokerage, or consulting business relies on this authenticity of engagement.

Read up on the hottest real estate markets in Toronto, Los Angeles, San Diego, and in York Region Ontario. You might have me help you market your home or use a real estate agent in your town.  Compare the costs and results.