Student Housing Pre-Lease Rates in July Surpass Pre-Pandemic Norms

If the last couple months of student housing performance caused a sigh of relief for operators, July’s results might cause a jump for joy.

In July, pre-lease rates hit 86.7% across the core RealPage 175 universities. That result registers higher than 2020 and 2019’s July readings, marking the first time that pre-lease rates outpaced their pre-COVID reading.

In July 2020, pre-leasing registered at 81.9%, and in July 2019, pre-leasing registered at 85.6%.

From June to July, pre-leasing jumped 9.9% in 2021, the largest monthly jump recorded this late in the season in years. Given the current standing and robust monthly gains, it seems all but certain that final pre-leasing, which ends in August, will hit the 90% threshold. Confidence in the student housing sector has come a long way since February and March when pre-leasing and rent change were underwhelming at best.

Rent growth also hit its highest rate in July. Effective asking rents were up 2.1% annually in July, again led by properties more than one mile from campus. July’s rent growth also registers above the July 2020 and July 2019 rates.

Properties more than one mile from campus claimed 2.7% annual rent growth, the highest rate seen in several years. Rent growth at properties within a half mile to one mile of campus was 2.3% in July, compared to 1.8% at properties within a half mile to campus. Though that reading at close-in properties weighs down overall performance, rent growth across all distances is strong and, in most instances, higher than both 2020 and 2019 readings.

In another positive reading, pre-lease rates at individual schools looks healthy. Among the core 175 universities, there are virtually no true pre-lease laggards. Only three schools register pre-leasing below 50%, and 12 schools report completely full pre-leasing as of July. This is another indication that most schools have rebounded from pandemic lows and expect a more normal school year.