December Pre-Lease Rate Surpasses 40%

Much like the last couple months, student housing pre-lease rates for Fall 2023 continue to perform at their strongest level in years.

Over 40% of student housing beds at the core 175 universities tracked by RealPage Market Analytics were pre-leased for the Fall 2023 academic year, marking the highest December reading on record by a wide margin.

A typical December pre-lease rate runs just below 30% as students are just getting settled into the new academic year and not yet usually looking for next year’s housing. The bump seen from December to January is generally lower, given that students go home for the holiday break.

Across distances, properties within a half mile of campus reported the strongest pre-lease occupancy as of December at 42.3%. Properties within one half mile to one mile of campus reported the lowest pre-lease occupancy (though still historically strong) at 35.1%. Properties more than one mile from campus reported 37.9% pre-lease occupancy as of December.

Annual effective rent change followed a similar pattern with properties within a half mile of campus claiming the strongest rent growth of 9.7% as of December. All other properties reported annual effective rent change of about 8.4% in December. Overall annual rent change stood at 9.3% in December – also a historically high rate.

From a university level, several schools – particularly flagship state schools – reported ultra-strong pre-lease occupancy as of December. The flagship state schools in Tennessee, Arkansas, Wisconsin (Madison), North Carolina, Illinois (Urbana-Champaign), Kentucky, Michigan and Arizona had all already surpassed the halfway mark for pre-leased beds by December.

In a final note of optimism for student housing operators: on-site occupancy is already running considerably higher in Fall 2022 than in previous years. On-site occupancy – that is, the rate of students occupying their leased beds – generally runs around 91%. That rate took a hit down to about 88% in Fall 2020, and then rebounded to above 93% in Fall 2021. So far in Fall 2022, on-site occupancy hovers above 96%.