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.




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

Housing Options for Foreign Students Studying in Vancouver – Off Campus Communities

Studying in Canada? Off Campus or On Campus Housing Options

Canada is quickly becoming the preferred choice for obtaining a Western education, for students and their parents across the globe. And Canada is welcoming as many as possible.

Within a few years, some 450,000 students will be in Canada studying and many will want to immigrate to Canada permanently. These educational programs for foreign students do provide a good source of new workers, badly needed in a small country.




However, what you’ll discover when you arrive here to check out cities such as Vancouver, is the severe shortage of student housing.  On campus or off campus, the issue of finding a place to live is a challenge. Some colleges such as Kwantlen Polytecnic, have no on campus housing for students.  Some of the housing solutions may or may not be for you depending on your financial resources and your tolerance for crowded living.

There are programs such as Homestay Canada who place students with homeowners who wish to offer a place in their homes for a monthly fee (e.g., $1000 per month). And there are private businesses who offer the same services. On campus solutions might include tiny units such as these units on the UBC campus, however these units renting at $700 per month could be difficult psychologically.

Screenshot Courtesy of the Nationalpost.com

Hosteling and Billeting in Vancouver

The hosteling or billeting opportunities represent a good deal of risk for both the Vancouver homeowner and the arriving foreign student. In some cases, a deposit or prepayment of a full year’s rental payments is required.

Sometimes these businesses run into financial problems and no longer can pay the homeowner. Without payment, the homeowner is no longer legally responsible for housing the foreign student. Many parents of the students fear their kids may end up homeless and in danger. That’s not a situation conducive to good study and high grades in class.




A better solution for anyone wishing to study in Canada, is a larger company with the financial resources to manage the student rental agreement well. A well financed company such as CIBT in Vancouver has $600 million in properties, much of it in Vancouver BC. CIBT has been operating student housing communities and services since 1994. They have the experience and the reputation that gives foreign parents and students the confidence they need to come to Canada and achieve their educational and life goals.

CIBT Serves Students in Vancouver Colleges and Universities

Colleges and Universities that welcome foreign students include UBC, Langara College, Kwantlen Polytecnic, Simon Fraser University, Vancouver Community College, and OMNI college. CIBT manages a number of educational services as well. You can learn more about CIBT and the student housing opportunities they can offer.

Learn more about CIBT’s properties include the Global Education Communities which have become very well known and in demand. While living in the GEC communities, students can socialize with those from their own country and learn to speak English better before embarking on post secondary programs. Their buildings are close to the skytrain and shopping and other conveniences you’re hoping for.

You’ll be Welcome in Canada

The education of foreign students is something most Canadians approve of and we enjoy hosting those from places such as Hong Kong, Dubai, Rio De Janeiro, Singapore, Kuala Lumpur, Tokyo and the world’s rising top cities.
If you’re planning for a Canadian education, Vancouver likely will be your first choice. It’s beautiful, modern, but expensive with limited housing availability.  The Vancouver housing forecast is for continued high prices and low availability of homes and condos which translates to very high prices.

Everyone wants to live in Vancouver so expect prices to be high.

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.

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Investing in Student Housing – Off Campus New Builds

Investing in Student Housing is Hot!

A few months ago, the Canada Pension Plan’s Investment Board bought $2.1 Billion worth of student housing properties in the United States. The joint venture, with partners in Singapore and Chicago now owns 48 student housing communities with a total of nearly 32,200 beds.

Image Courtesy of Amazon.com

That mega-investment gives you a heads up on the one of the best real estate investment opportunities going – Student housing investment.  According to one report, student housing investment in 2017 is expected to equal the torrid rate of 2016.

Student housing portfolios might outperform everything especially in cities such as San Francisco, Vancouver, and Toronto. With housing very rare and rental prices exceeding $1400 a month per student, the revenue numbers begin to look promising.

You might be skeptical about risks and management costs, yet the off campus student housing investment opportunity can include hiring property management companies. New purpose-built student housing communities offer a superb investment potential whether you invest in the investment firm, like a REIT, or if you buy a unit yourself and rent it out.  Rumours of 10% to 14% ROI make it worthwhile to investigate.

In the US, land use agreements are growing and student housing projects grew $3 Billion in just half a year during the first part of 2016 according to a report from realtor.org.

CIBT Group Inc. Vancouver

I’ll introduce you to CIBT Group in Vancouver whose holding company manages $600 million in properties, communities, education services, and other services related to foreign student housing in Canada.

Bruce Campbell of Stone Castle Investment Discusses CIBT on BNN

These on campus and off campus communities are very attractive to foreign students since they attract other students from their native countries.  Students feel more comfortable and their parents prefer to rent or buy these condos because they feel their son or daughter is more likely to succeed when they have comfortable living arrangements. It all makes good sense. The new purpose-built condo projects in cities like Vancouver are on their wishlist.

The shortage of condos in Vancouver and rising prices ensures demand for these properties/investments will stay strong. You may have to be invited to the investment education meetings first.  Here’s an example of an invitation to the recent Viva Tower open house.

Vancouver and Richmond BC have a large number of colleges and universities in close proximity. This means the condos can house students from multiple post secondary institutions. UBC, Kwantlen Polytecnic, Langara College, OMNI college, and others are located in the city of Vancouver. And as we know, Vancouver real estate is in big demand and the focus has changed to the condo market.

New Builds and Pre-Construction Student Housing

Most built projects are fully bought and there’s little opportunity to purchase now. New preconstruction projects are where you can get in on this booming investment in student housing. CIBT Education is the leader in this field in Vancouver. They have a large portfolio of projects which you can invest in shares. This gives you the opportunity to capitalize on this booming market without owning individual properties and being responsible for upkeep and rental management.

If investment is a more attractive option for you rather than buying condo units outright, you can learn more about availability and ROI etc, from Joyce Soo of Sutton Group Seafair Realty in Richmond, British Columbia. She can be contacted at (604) 273-3155.

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.

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Student Housing in Booming Vancouver

Student Housing Investment Opportunities in 2018

Education is big business in Canada, to the tune of $2 Billion each year. Tens of thousands of foreign students arrive to study in places such as Vancouver and Toronto annually. With this influx comes a corresponding demand for student housing which puts pressure are on an already undersupplied market.

A big problem? Not for smart real estate investors, many of whom are the parents of these students who value a Canadian education.  Canadian colleges and universities hold a lot of prestige.

This yearly migration which will continue in 2018 and beyond, is now growing partly due to President Trump’s immigration policies in the US. Those who looked at the US first are choosing Canada instead.




The reason foreign students prefer Canada is many — cheaper tuition, cheaper accommodation, less crime, and a more inviting environment compared to the US. Canadian cities are more ethnically diverse and appear more welcoming. And students can stay and work in Canada for 3 years after graduation which gives them valuable work experience and income. In the US, they may get booted out right away.




One year of education plus accommodations at a US university might carry a price tag upwards of $70,000.  So the preference for Toronto and Vancouver is growing. Since cost is the number one issue for most foreign students, Canada is very inviting. But cities such as Vancouver or Toronto have a persistent problem — a lack of affordable condo apartments for foreign students. That persistence spells sustainable investment ROI.

Foreign Students in Canada

There are already 353,000 international students in Canada and the plan is to attract 450,000 by 2022. That’s 25,000 more per year for the next 4 years. These foreign students now make up 1% of Canada’s population. And some of the students are now adults who are arriving here with their young families.

The BC government says it has attracted 130,000 foreign students and claimed that they inject $2 billion each year into the economy, creating 29,000 jobs.




Let’s Not Forget the Canadian Students

And with hundreds of thousands of Canadian students pursuing a post secondary education as well, you can see how the demand for student housing would go unfulfilled. With regular Canadians unable to find homes, the situation for foreign students is even tougher. Condo prices and rental leases in Vancouver are unaffordable.

A typical scenario for these Canadian and foreign students is a 6 person condo where each student pays $500 to $800 per month which translates to $3000 to $5000 in monthly revenue. In Vancouver, that number is typically higher.

Interest in that type of student housing solution is strong, however the type of living arrangement is not conducive to study or living. Foreign students rarely feel they will fit into what they may see as a “frat house” situation.

New Condo Developments for Foreign Students

One notable form of housing for foreign students is new condo buildings built specifically with their needs in mind. And many of whom are from wealthy families and can afford the more exclusive units. Prospective buyers from China, South Korea, Dubai, Russia, United Emarates, Brazil, India, Turkey, Columbia, Mexico, Germany, and Japan value a Canadian post secondary education very highly.

So highly, in fact, they’re willing to buy an appropriate condo to ensure their sons or daughters have a comfortable optimal situation in what is to them, a strange and scary foreign location. They’re spending a lot of money and want to ensure this once in a lifetime opportunity is successful.




Some of the sponsoring parents look to buy a home here in Canada. In fact, the rising demand from Chinese buyers is well known. They’re even blamed by the provincial governments as the source of housing crisis in Vancouver. They want to be with their kids and experience living in the world’s best city – Vancouver. Who can blame them, and since Canadian education services are a potential international trade strength, it makes sense to develop the foreign education market.

While the foreign buyer’s tax was applied in Vancouver and has slowed sales of units, the interest from investors has returned somewhat.

Those who bought into student housing condos 4 to 6 years ago, have realized an extra bonus on their property. After their children are educated, they have sold their units for a phenomenal capital gain. But the rental income here is perhaps still some of the best rental income opportunities in North America.




We all know the average price of a condo in Vancouver is around $660,000 and those in Richmond are right smack in the vicinity of so many colleges and university campuses. And given the $1 million average home price (with no availability) the interest in condominiums is strong and expected to perhaps grow.

The city of Vancouver is committed to high rise development and urban intensification and apparently approve of the new wave of foreign students. If they aren unable to support these students needs, then the free market is stepping up to fill the void.

It’s a lucrative market you need to investigate. If you’re interested, contact Joyce Soo of Sutton Seafair Realty in Vancouver BC (604) 273-3155.

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.

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