Global Capital, Local Edge: Why Student Housing Is Becoming a Core Asset Class

While other real estate sectors tread cautiously through inflationary pressure and yield compression, U.S. student housing is quietly outperforming. Long dismissed as niche, the sector has steadily climbed its way into the portfolios of some of the world’s largest institutional investors and it’s not just holding its ground. It’s expanding it.

Backed by strong fundamentals, structural resilience, and increasingly global capital flows, U.S. purpose-built student accommodation (PBSA) is no longer the sector you enter on a contrarian hunch. It’s one you enter to find growth, consistency, and scale.

Want expert insight on this shift?

In our latest Room to Grow episode, Teddy Leatherman, Head of JLL’s U.S. Student Housing Capital Markets, unpacks how capital flows, consolidation, and operational evolution are reshaping the student housing landscape.

Listen to the episode here.

A Sector Built to Withstand Cycles and Now, to Outperform

Few real estate classes are as insulated from macro shocks as student housing. When job markets tighten, students return to school. When inflation rises, universities still open their doors. And unlike hospitality or retail, the PBSA sector is underpinned by essential demand: access to education.

What makes this even more compelling is the non-correlation to U.S. GDP, a rare feature that helps stabilize cash flows, especially in economic downturns. That’s why student housing has become a hedge for many funds, not just an alternative.

Key indicators:

Mid-90% occupancy across major markets

4%+ average rent growth, with certain markets pushing double digits

Low default rates and strong parental lease guarantees

Enrollment growth in Tier 1 and Tier 2 university cities

The message is clear: this isn’t just a resilient asset. It’s a defensible, demand-backed growth story.

Development Pipeline Is Shrinking and That’s Good News for Operators

Rising interest rates have tightened the economics of new builds. Most developers now need to target 6.5–7% untrended yields on cost, a significant hurdle in today’s environment. The result? Annual PBSA deliveries have fallen by nearly 50%, from 60,000+ beds to 30,000 expected over the next two years.

But in an industry driven by limited land, rising enrollments, and student preference for proximity, this scarcity has created a premium on stabilized assets.

For current owners and investors, that means:

Pricing power in top-tier locations

Stronger NOI performance relative to multifamily

Greater interest from core and core-plus capital, especially for infill and walkable assets

Development may rebound over the next cycle, especially as dry powder gets redeployed, but for now, the supply gap is a feature, not a bug.

Cross-Border Capital: From Passive Interest to Platform-Building

International capital has long observed U.S. PBSA. Now, it’s entering at scale.

Investors from Canada, the UK, Australia, and Japan are not just buying assets, they’re building platforms. Whether through joint ventures, M&A, or full acquisitions, foreign investors are seeking a long-term stake in a sector they view as undervalued relative to global benchmarks.

What’s driving this shift?

Currency advantages vs. the U.S. dollar

Higher yields than domestic markets (especially Europe)

Familiarity with student housing models from UK/AUS markets

Proven resilience during global downturns

This trend mirrors a larger shift in global real estate: platform ownership, not just passive investment. And student housing is proving fertile ground for those ambitions.

Operational Evolution: Why NOI Is a Technology Story Now

It’s not just the capital stack that’s shifting, it’s how operators are running buildings.

With property taxes, insurance premiums, and staffing costs on the rise, operators are being forced to rethink how NOI is protected. And many are turning to tech-enabled operations as their edge.

Modern PBSA platforms now leverage:

AI-driven budgeting and forecasting

Real-time rent analytics and leasing dashboards

Automation in accounts payable, billing, and reconciliation

Lean F&A delivery models through offshore or third-party partners

In an environment where margins are thin and expectations are high, operational agility is becoming a differentiator, especially for those courting institutional capital.

What Students Want Is Still Evolving and It’s Reshaping Product Design

Modern student housing isn’t built the same way it was even five years ago. Walkability, privacy, wellness amenities, and hybrid-use common areas have replaced generic layouts and distant sites.

But it’s not just lifestyle preferences shaping design. Developers and operators are also adapting to rising land costs and smaller parcels leading to high-rise urban towers, more density, and double-occupancy units in non-urban markets.

There’s also a subtle global convergence happening. While “cluster flats” are still rare in the U.S., the rise of shared but high-amenity living spaces may pave the way for hybrid product models drawn from UK and European formats.

Where the Sector Is Headed Next

Student housing is no longer just an “education-linked” real estate play. It’s a reflection of deeper global shifts in where students go, how they live, and where investors believe long-term value lies.

Looking ahead, we expect to see:

Operator consolidation and M&A within U.S. PBSA

Cross-border expansion by both foreign and domestic platforms

Greater integration between asset, ops, and finance teams

And a clear push toward institutional-grade infrastructure at every level

As global education expands and the hunt for yield intensifies, U.S. student housing is positioned not just to participate in that growth, but to lead it.

Hear from a market leader

For deeper insight into these trends, listen to our podcast episode with Teddy Leatherman (JLL), where she unpacks the capital shifts, development pressures, and international momentum defining the sector today.