Scattered Site Student Housing

Small buildings near campus have long been neglected by real estate investors. That's beginning to change.

The past decade saw the emergence of two new residential asset classes: single family rentals (SFR) and purpose-built student accommodation (PBSA). Both saw rapid growth and cap rate compression as institutional investors gained interest and rolled up large portfolios. Today’s Thesis Driven explores scattered site student housing, an emerging sector that combines some of the most compelling—and challenging— elements of both SFR and PBSA.

Long the domain of small mom-and-pop landlords with poor reputations for maintenance and customer service, small buildings near major universities serving students are drawing increasing interest from real estate veterans and investors due to their cash flow and potential upside.

In this letter, we’ll tackle:

• The scattered site student housing thesis;

• Typical deal profiles;

• Existing players, new entrants, and target ‘buy boxes’;

• Macro trends, threats, and tailwinds.

… and a new real estate operator you’ve probably never heard of with $1 billion under management in the sector and growing.