The student housing market around the University is expecting a big year, according to Axiometrics, a corporation specializing in student housing research data. The University’s market ranked fifth in bed spaces to be added for student housing properties.
This is the third highest year ever in new bed spaces nationwide, falling behind 2014 and 2013, according to Axiometrics data. Senior Vice President of Analytics for Axiometrics Jay Denton said in the 2016 report that even though the numbers are a little lower, the market remains steady.
“Though deliveries of new supply are not as high as they were a couple of years ago, demand remains strong, and students are generally absorbing the new beds,” Denton said in the report. “One thing that differentiates student housing from conventional apartments is that the distribution of new supply can change dramatically year to year. As construction near one school meets the demand, a building boom will begin in another university market.”
Student Housing Analytics Lead Taylor Gunn said the University is coming off a huge building boom in 2015. She said the effects will continue in 2016.
“I think LSU saw their boom last year,” Gunn said. “We’re still seeing, kind of, a carry-over from the boom.”
More than 60 percent of the existing off-campus supply in the University’s market has been delivered in the last five to six years alone. But that doesn’t necessarily translate to success for the complexes, according to the report. The influx of over 3,800 beds in the past two years added to the already saturated market.
From 2013 to 2016, July preleasing dropped 16.1 percent, from 93 to 76.9 percent, according to Axiometrics.
Gunn said this performance is typical with markets experiencing a high influx of new bed spaces.
“It’s not necessarily that there’s not a need for it,” Gunn said. “A market being able to handle that much new supply at the same time.”
The swell in development dropped rent prices for the University’s market, Gunn said. Axiometrics reported the average monthly rent per bed at $595 for fall 2016, which is the lowest average for the University’s area in the last four years. Typically, the price of rent will go down as complexes struggle to fill up, Gunn said.
Biology sophomore Annie McGinnis took advantage of the low rate offered at a local complex, and said price was one of her main concerns.
Between the facility being brand new and the low rate, she said the choice was easy.
“I was looking for an apartment complex that wasn’t going to be way too overpriced,” McGinnis said.
The drop in rent price could continue into 2017, with over 700 beds projected to add to the University’s market next year, according to the report. But Gunn projects the building boom for Baton Rouge will be over soon, and the market should level out by 2018.