Inside U.S. Student Housing: Capital Trends & Global Moves

In this episode of Room to Grow, Teddy Leatherman, who leads JLL’s U.S. Student Housing platform, joins Philip Hillman for a deep dive into the evolving landscape of purpose-built student accommodation (PBSA). They explore why the sector continues to attract capital even in a high-rate environment and how investor appetite, development hurdles, and international activity are shaping the future.

What’s the episode about?

• Why student housing stays strong, even when GDP doesn’t
• 2025–26 trends: rent growth, occupancy, and market health
• Yield benchmarks and what types of capital are active
• Development halved, but signs of a rebound are clear
• Capital flows from the UK, Canada, Australia, and Japan
• Cross-border consolidation and the rise of global operators
• Boosting NOI through smarter ops, despite rising costs
• What students demand: walkability, privacy, and density

About the guests

Teddy Leatherman

Teddy leads the U.S. Student Housing platform at JLL and has over a decade of experience in student housing capital markets. Starting her career at Marcus & Millichap before joining HFF (later acquired by JLL), she now plays a pivotal role connecting institutional capital with PBSA opportunities across the U.S. and beyond. Based in Dallas, USA, she’s been instrumental in shaping the sector’s growth and cross-border momentum.

Philip Hillman

Philip Hillman is a Senior Consultant at QX Global Group and one of the earliest advisors to the UK’s Purpose-Built Student Accommodation (PBSA) sector. With over 35 years in real estate and leadership roles at JLL, including Chairman of Living Capital Markets, Philip has helped shape the sector through landmark transactions and strategic advisory. A regular speaker at industry events, he brings a deep understanding of the Living sectors across the UK and Europe.

Highlights & Time Stamps

00:00 – 02:30 | Introduction & Career Background
Philip introduces Teddy Leatherman, who leads JLL’s U.S. Student Housing Platform. She shares her journey from Marcus & Millichap to HFF (later acquired by JLL) and her persistence that led to joining Mark Gibson’s team. She now oversees JLL’s national student housing capital markets business.

02:30 – 05:40 | Defining ‘Living’ as an Asset Class
Teddy explains how “living” in the U.S. now includes all bed-based assets outside hotels. Investors are attracted by diversification and stronger yields compared to multifamily. Student housing stands out for having no correlation with GDP, making it resilient during downturns.

05:40 – 09:00 | Market Size, Performance, and Yields
The sector includes roughly 1.5 million purpose-built beds, with $8–10B in annual transactions. For 2025–26, rent growth averages 4%, with some markets reaching 30%. Occupancy sits in the mid-90s, and top assets trade at around 5% cap rates, comparable to prime living sectors.

09:00 – 12:00 | Development Pipeline & Capital Deployment
High interest rates have halved new supply from 60,000 to 30,000 beds per year. Development now needs 6.5–7% yields on cost to be viable. With $320B in undeployed capital, funds are shifting toward ground-up development and creative financing structures.

12:00 – 14:50 | Consolidation and Global Capital Flows
Teddy predicts increased consolidation among U.S. operators as larger firms acquire smaller platforms. Global interest is growing, especially from UK, Canadian, and Japanese investors. Canadian pension funds like CPPIB are expanding exposure to U.S. student housing.

14:50 – 17:30 | Operating Costs and NOI Pressures
Despite inflationary headwinds, operators are leveraging granular cost control and technology to protect margins. Insurance relief of 15–20% is helping NOI recovery. Funds in fundraising mode are focused on proving stable returns to attract reinvestment.

17:30 – 19:30 | Design and Development Trends
Walkability is the number-one amenity. Scarce campus-adjacent sites are pushing developers to build high-rise, high-density properties with double-occupancy rooms to improve yield. Bed-bath parity remains the norm, while parking varies by market.

19:30 – 21:30 | Global Students and Future Outlook
International students form only 6% of total enrollment—one of the lowest globally—providing resilience against travel shocks. Teddy forecasts greater global collaboration, continued consolidation, and expansion of cross-border operating models over the next decade.