Evolution of the U.S. Student Housing Market Eigen 10 Advisors, LLC - - PowerPoint PPT Presentation

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Evolution of the U.S. Student Housing Market

Eigen 10 Advisors, LLC

October 16, 2019

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14,582,972 5,258,042 383,055

Total Post-Secondary Enrollment

Public Private Non-degree Granting 10,430,542 6,438,670 1,695,783 1,276,019

Degree-Granting Total Enrollment

Undergrad FT Undergrad PT Grad FT Grad PT

Source: National Center for Education Statistics

23 Mil illio lion U.S .S. . St Students Enroll lled in in Post-Secondary ry Educatio ion

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Changin ing Trends - Enroll llment Unaffected (a (and So Sometim imes Im Improved) ) in in Recessio ions

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Source: National Center for Education Statistics

Total Enrollment 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 8,000,000 9,000,000 10,000,000 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 Public 4 Yr Public 2 yr Private 4 Yr Private 2 Yr

forecast

1/80

• 7/80

7/81

• 11/82

7/90

• 3/91

3/01

• 11/01

12/07

• 6/09

11/73

• 3/75

12/69

• 11/70

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In Investors - Recessio ion Concerns Sp Spik ikin ing

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20 40 60 80 100 120

2004-01 2004-07 2005-01 2005-07 2006-01 2006-07 2007-01 2007-07 2008-01 2008-07 2009-01 2009-07 2010-01 2010-07 2011-01 2011-07 2012-01 2012-07 2013-01 2013-07 2014-01 2014-07 2015-01 2015-07 2016-01 2016-07 2017-01 2017-07 2018-01 2018-07 2019-01 2019-07

Google - Recession Topic Search

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Enroll llment Growth St Strongest in in So South and West

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Source: National Center for Education Statistics, 2016 data

Enrollment Growth by State 2000- 2016 (000s) < 50 50 -100 100-150 > 150

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35.0% 39.1% 0.3% 15.1% 0.5% 0.0% 5.7% 2.3% 1.9%

% Undergrads

Pub 4 yr Pub 2 yr Pub < 2 yr Pr NP 4 yr Pr NP 2 yr Pr NP < 2 yr Pr FP 4 yr Pr FP 2 yr Pr FP < 2 yr

Source: National Center for Education Statistics

Enrollment Status

Estim imatin ing St Student Housin ing Mar arket Siz Size

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40% of Undergrads are Old lder than 23 yrs and Nearly ly Half lf are In Independent

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0% 10% 20% 30% 40% 50% 60% Dependent Independent, no dependents, unmarried / separated Independent, no dependents, married Independent, w dependents, unmarried / separated Independent, w dependents, married Grad Undergrad 0% 20% 40% 60% 80% 15-23 24-29 30+

Age

Grad Undergrad

Source: NCES

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Source: NCES, Survey: Niche.com, 75 largest 4 yr universities

2.7 .7 mil illi lion St Students in in Univ iversit ity Owned Propertie ies – Many Vie iewed as s Mid id to Poor r Quali lity

2 4 6 8 10 12 14 16 18 20 35 40 45 50 55 60 65 70 75 80 85 # of Schools

% of Students Rating Dorms as High Quality

Poor Dorm Quality

Dorm Quality D C B A

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In Inventory ry Growth Slo Slowin ing in in Univ iversit ity Owned Propertie ies

Source: RealPage

90% 91% 92% 93% 94% 95% 96% 97% 98% 99% 100% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 10,000 20,000 30,000 40,000 50,000 60,000 70,000 Beds Change in # Beds Change in Occ. Beds Occupancy

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Univ iversit ity Owned –Pace of Cost In Increases Slo Slowin ing

0% 1% 2% 3% 4% 5% 6% 7% 8% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Meal Plan Change Room Cost Change

Source: RealPage

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62% of St Students Liv ive Off Campus – Not With ith Parents

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Source: National Center for Education Statistics

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Pub 4 yr Pub 2 yr Pub < 2 yr Pr NP 4 yr Pr NP 2 yr Pr NP < 2 yr Pr FP 4 yr Pr FP 2 yr Pr FP < 2 yr

Undergraduates

On campus Off campus Living with parents

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8.9 .9 Mil illi lion St Students Need Off-Campus Rental l Housin ing in in 2018 = 8.2 .2% of f U.S. .S. Renter Popula latio ion

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Source: Eigen 10 Advisors, LLC, NCES

• 1,000,000

2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 Public 4 year Public 2 year Private 4 year Private 2 year # Students

Undergraduate Housing

On Campus Parents Owned Rented

• 500,000

1,000,000 1,500,000 2,000,000 Public 4 year Private 4 year # Students

Graduate Housing

On Campus Parents Owned Rented

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Barri riers to Su Success: : Housin ing In Insecurit ity

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• 32,000+ Homeless College Students
• 8.8% of Undergrads & 8.5% of Grad

Students at risk of homelessness

• 23.4% of Undergraduates & 17.2% of

Graduate Students in Poverty

• > 2/3 of Undergrads work while in school

Source: HUD, NCES

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Affordabil ilit ity Is Is Im Important

34 34% of

• f Undergrads an

and 38 38% of

• f Gr

Grads Ear arn < < $2 $20, 0,000 per year

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5 10 15 20 25 30 35 40 45 < $10 $10-$19.9 $20-29.9 $30-49.9 $50+ % of Students

Undergrad Grad

Source: NCES

Total Income (000) for Independent Students or Parents of Dependent Students Source: NCES

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St Student Housin ing - Newer r Unit its Less Lik ikely ly to Have Double le Occupancy

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0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% % of Units with Double Occupancy Year Built

Source: RealPage

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St Student Housin ing Sa Sample le – Convertin ing Estim imated Beds to Unit its

Source: RealPage

Beds / Unit: Student Competitive 1.5 Student Housing 2.8

Student Housing

64% < 0.5 mi from campus 0.9 mil beds, 0.3 mil units Rent by bed

Student Competitive

70% > 1 mi from campus 5.4 mil beds, 3.2 mil units Rent by unit % of Beds in 80+ Units: Student Competitive 98.6% Student Housing 99.2%

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63,306,236 4,481,270 1,599,101 1,562,857 949,429 4,702,427 82,698 12,172,265 2,774,973 7,626,626 13,391,503 5,466,070 1,902,348 45,015

Total U.S. Housing Market

O 1, detached O 1, attached O 2-4 O 5 to 49 O 50 or more O Mobile home O Boat, RV, van, etc. R 1, detached R 1, attached R 2-4 R 5 to 49 R 50 or more R Mobile home

St Student Housin ing is is an estim timated 12% of f th the Total l 43.4m unit its in in U.S .S. . Rental l Mark rket

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Source: U.S. Census

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78% of St Student Housin ing Built ilt in in Last 20 Years

• 200,000

400,000 600,000 800,000 1,000,000 1,200,000 Pre-1970s 1970s 1980s 1990s 2000s 2010+

# Beds by Decade Built

Student Housing Student Competitive

18

Source: RealPage

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Half lf of Enroll llment is is in in 9 St States

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Source: National Center for Education Statistics, 2016 data

Total Enrollment %Chg 2000- 2016 % of Total Market Cumulative %

• f Total

Market US 19,841,014 29.6 CA 2,700,106 19.6 14% 14% TX 1,603,259 55.1 8% 22% NY 1,273,651 22.1 6% 28% FL 1,075,496 52.0 5% 34% IL 777,720 4.5 4% 37% PA 725,770 19.1 4% 41% OH 658,229 19.8 3% 44% AZ 608,084 77.5 3% 47% MI 583,035 2.7 3% 50% NC 561,496 38.8 3% 53%

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Urb rban & Hard-to to-Buil ild St States – More St Student Competit itiv ive

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40,000 80,000 120,000 160,000 Texas Florida North Carolina Georgia California Michigan Pennsylvania Alabama Indiana South Carolina Arizona Illinois Ohio Virginia Tennessee Missouri Louisiana Mississippi Utah New York

Student Housing Beds

100,000 200,000 300,000 400,000 500,000 600,000 700,000

Texas California Florida Georgia New York North Carolina Maryland District of Columbia Washington Virginia Illinois Arizona Pennsylvania Ohio Michigan Indiana Colorado Massachusetts Tennessee New Jersey

Student Competitive Beds

Source: RealPage

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10,000 20,000 30,000 40,000 50,000 60,000

University of Kentucky Towson University University of Michigan University of Arizona University of Wisconsin - Madison University of Denver Texas State University Southern Polytechnic State University University of Minnesota Ohio State University Emory University University of Central Florida University of North Carolina - Charlotte Florida State University Georgia Institute of Technology University of Texas at San Antonio University of Texas at Dallas University of Nevada - Las Vegas George Washington University University of Florida University of California - Irvine Saint Edwards University University of Maryland University of Texas at Austin North Carolina State University University of Texas at Arlington University of South Florida Texas A&M University Arizona State University

Data - 30 Largest Private Owned Housing

Student Housing Student Competitve

Source: RealPage

Majority of student housing is Student Competitive – Proportions vary by Campus.

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Sti Still ll A No Non-Institutional l Mar arket: : 55 55% of

• f Propertie

ies in in Stu Student Rental l Mar arkets Have < < 10 10 Unit its & 80 80% ar are < < 50 50 units its

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Source: NCES, U.S. Census; Rental housing markets are counties for the 70 largest 4 year universities, excluding on-line universities

0% 5% 10% 15% 20% 25% 30% Units

Rental Housing Stock 2018

Counties, Top 70 Univ US

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Effic ficie iencie ies of f Sc Scale le? Most t Owners Hold ld Few Propertie ies

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25 50 75 100 125 150 175

Capstone Collegiate Communities Zimmer Development Company Sterling University Housing Core Spaces Campus Living Villages Pierce Education Properties Park7 Group Aspen Heights Partners Coastal Ridge Real Estate Landmark Properties Horizon Realty Advisors Blue Vista Capital Management FPA Multifamily University Communities Student Quarters Campus Apartments Campus Advantage CA Ventures The Preiss Company Vesper Holdings The Collier Companies Greystar The Scion Group Harrison Street Real Estate Capital American Campus Communities

Top 25 Owners

# Properties

Source: Student Housing Business

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In Instit itutio ional l Quali lity Housin ing Gettin ing Clo Closer to Ca Campus

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0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Pre-1970s 1970s 1980s 1990s 2000s 2010+ Year Built

% Beds by Distance to Campus

Student Competitive 1+ Miles Student Competitive .5-1 Miles Student Competitive 0-.5 Miles Student Housing 1+ Miles Student Housing .5-1 Miles Student Housing 0-.5 Miles

Source: RealPage

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St Student Housin ing Unit its Larger Over r Tim Time

0% 20% 40% 60% 80% 100% Pre-1970s 1970s 1980s 1990s 2000s 2010s 1/1 2/1 2/1.5 2/2 3/2 3/3 4/2 4/4 Other

Bed/Bath Pre-1970s 1970s 1980s 1990s 2000s 2010s 1/1 17% 14% 12% 3% 3% 4% 2/1 27% 15% 11% 3% 2% 2% 2/1.5 5% 5% 1% 1% 0% 0% 2/2 11% 15% 18% 16% 15% 15% 3/2 5% 18% 8% 6% 2% 1% 3/3 0% 6% 6% 11% 19% 14% 4/2 7% 15% 18% 32% 12% 6% 4/4 2% 1% 10% 22% 36% 37% Other 25% 11% 17% 8% 10% 20%

Source: RealPage

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St Student Co Competit itiv ive Prim rimaril ily 1/1 /1 or r 2/2 /2 Bed/Bath

0% 20% 40% 60% 80% 100% Pre-1970s 1970s 1980s 1990s 2000s 2010s 1/1 2/1 2/1.5 2/2 3/2 3/3 4/2 4/4 Other

Bed/Bath Pre-1970s 1970s 1980s 1990s 2000s 2010s 1/1 27% 26% 29% 23% 27% 34% 2/1 34% 26% 16% 10% 4% 2% 2/1.5 7% 10% 4% 1% 1% 0% 2/2 13% 21% 39% 44% 46% 43% 3/2 5% 8% 5% 14% 11% 5% 3/3 0% 0% 0% 1% 1% 1% 4/2 0% 0% 0% 1% 0% 0% 4/4 0% 0% 0% 0% 0% 0% Other 13% 9% 7% 6% 10% 14%

Source: RealPage

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St Student Housin ing – La Larger Unit it Mix ix In Increases Siz Size Over Tim Time

• 200

400 600 800 1,000 1,200 Pre-1970s 1970s 1980s 1990s 2000s 2010+ SF Per Unit

Average Size by Decade

Student Housing Student Competitive

• 500

1,000 1,500 2,000 2,500 Studio 1 BR 2 BR 3 BR 4 BR 5+ BR SF Per Unit

Average Size by Unit Class

Student Housing Student Competitive

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Source: RealPage

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In Increase in in Hig igh-Ris ise Build ildin ings

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200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000 Pre-1970s 1970s 1980s 1990s 2000s 2010+ Beds High-Rise-SH High-Rise-SC Mid-Rise-SH Mid-Rise-SC Low-Rise-SH Low-Rise-SC

Source: RealPage

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Lif Life Effic ficie iency Amenit itie ies Most t Im Important

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Source: Student Housing Business.com Nov/Dec 2018

20 40 60 80 100 Resident Events Club Room Roommate matching Pool or Hot Tub Study Areas Fitness Room Pets Allowed Furniture Dishwasher Utilities Wi-fi Parking Laundry Student Survey Off Campus On Campus

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Sig Signif ific icant Co Cost #3: : FOOD!

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2 4 6 8 10 12 14 55 60 65 70 75 80 85 90 95 # Schools % Students Rating Dining Facilities Highly

• Average cost of top

dining plans is $578 per month.

• Average cost of all dining

plans is $486 per month.

• Average student housing

rent is $637 per month.

Source: Niche.com, 75 largest 4 yr universities, RealPage rent

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Fast Food Not Listed in Top Schools’ Food Choices, but….

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Source: Niche.com

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A Sig Signif ific icant Number of St Students with ith Dis isabil ilit itie ies Needs

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0% 20% 40% 60% 80% 100% Off-campus On-campus With Parents / Relatives

Percent Undergraduates with Disabilities

Without Disabilities With Disabilities

Source: National Center for Education Statistics, 2016 data

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New Co Constructio ion

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20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Units

Student Competitive - New Construction

MW NE S W

Source: RealPage

10,000 20,000 30,000 40,000 50,000 60,000 70,000 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Beds

Student Housing New Construction

Midwest Northeast South West

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Priv rivate Sc Schools ls In Increasin ing St Stock Faster

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0% 2% 4% 6% 8% 10% 12% 2010 2011 2013 2014 2015 2016 2017 2018 2019 %Chg YoY Beds

Increase in Stock Per Year

Private Public 10,000 20,000 30,000 40,000 50,000 60,000 70,000 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 New Beds

Increase in Stock Per Year

Public Private

Source: RealPage

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Rents Up Slig Slightly ly While ile St Student Competit itiv ive Occupancy Hold lds

$0 $100 $200 $300 $400 $500 $600 $700 $800 $900 $1,000 87% 88% 89% 90% 91% 92% 93% 94% 95% 96% 2014 2015 2016 2017 2018 Rent-SH Rent-SC

Source: RealPage

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Rent an and Occupancy by Decade Bu Built ilt

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$0 $200 $400 $600 $800 $1,000 $1,200 $1,400 89% 90% 91% 92% 93% 94% 95% 96% Pre-1970s 1970s 1980s 1990s 2000s 2010+ Effective Monthly Rent-SH Effective Monthly Rent-SC Occupancy-SH Occupancy-SC

Source: RealPage

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Co Comple letio ions Outp tpacin ing Enroll llment

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• 1.5%
• 1.0%
• 0.5%

0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Enrollment Growth Per Year

Midwest Northeast South West 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 %Chg YoY Beds

Increase in Stock Per Year

Northeast South West Midwest

Source: RealPage Top 175 Schools

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Ch Change in in Vacancy & Rent by Regio ion

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Source: RealPage Top 175 Schools

$0 $100 $200 $300 $400 $500 $600 $700 $800 $900 86% 88% 90% 92% 94% 96% 98% 2014 2015 2016 2017 2018

Midwest

Rent-SH Rent-SC Occupancy-SH Occupancy-SC $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800 86% 88% 90% 92% 94% 96% 98% 2014 2015 2016 2017 2018

West

Rent-SH Rent-SC Occupancy-SH Occupancy-SC $0 $100 $200 $300 $400 $500 $600 $700 $800 $900 86% 88% 90% 92% 94% 96% 98% 2014 2015 2016 2017 2018

South

Rent-SH Rent-SC Occupancy-SH Occupancy-SC $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800 86% 88% 90% 92% 94% 96% 98% 2014 2015 2016 2017 2018

Northeast

Rent-SH Rent-SC Occupancy-SH Occupancy-SC

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New Su Supply ly Concentrated in in a Few Sc Schools ls

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 2015 2016 2017 2018 2019 % of Total

Top 10 Concentration

New Units New Beds

39

Source: RealPage

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Despit ite New Co Constructio ion, Housin ing Not t Keepin ing Up with ith Enroll llment Ch Changes in in Many Univ iversit itie ies

40

Source: RealPage; Housing includes student competitive and student housing

• 5,000

10,000 15,000 20,000 25,000 30,000 35,000 California State - Fullerton Iowa State Univ of California - Riverside California State - San Marcos Washington State Kennesaw State University of Texas at Tyler Univ of California - Los Angeles Utah Valley University Univ of California - Davis Arizona State Florida International Texas A&M - Kingsville Univ of Southern California Univ of Central Florida Oregon State Rutgers - New Brunswick Univ TX - Rio Gr - Edinburg Univ of Texas at Arlington Housing Shortfall 2010+ Enrollment Chg 2009-18