Neil Shekhter – NMS – Student Housing in U.S. Attracting Foreign Investors
LOS ANGELES, CA / ACCESSWIRE / May 11, 2018 / Buyers in the commercial real estate market are seeking a new niche to invest in as the bull market enters into late innings. Fancy hotels and office towers were once the darlings of foreign investors who considered them U.S. real estate trophies. But this is no longer the case as the bull market enters its eighth year. Student housing is strongly emerging as a less exotic, although extremely popular, sector of the commercial real estate market.
Explains Neil Shekhter, chief executive officer of NMS Properties, “People will attend universities whether times or good or bad. Investors consider this niche an asset class like social infrastructure.”
When commercial property was experiencing the early stages of the bull market, properties such as New York’s historic Waldorf Astoria Hotel and One Chase Manhattan Plaza were considered jewels worth obtaining by foreign investors. But entering the eighth year of expansion and facing rising interest rates, foreign investors are noticeably seeking higher ground where safer investments such as student housing are located. Many investors report that because student housing features an anti-cyclical nature, modernizing and operating these facilities provides them with attractive high yields compared to low risks.
In the first two months of 2018, foreign capital represents 42% of student-housing transactions. This compares with 36% in 2017 and only 21% in 2016, according to NMS Properties, Inc.
The need for student housing in the United States continues high because public university enrollment continues to increase, although overall college enrollment has been down over the past seven years. “Public institutions are the center of attention,” says Lang. Student residences located near the campuses of large state universities, as well as colleges with strong math, engineering, and science & technology programs, complimented by high-profile sports teams, are among the most sought after pieces of property attracting attention from foreign investors.
A strong preference by students to be close to their college campus keeps student housing demand strong, but this sector is certainly not risk-free. Compared with multifamily real estate investments, student housing has a much higher attrition rate. Leasing strategies must remain smart in order to avoid rooms being empty for a semester or even a whole year.
NMS has offered quality rentals in the Los Angeles area for nearly three decades. Since 1988, NMS has developed and managed a large portfolio of premier apartment buildings and commercial properties in Santa Monica, West Los Angeles, Brentwood and the San Fernando Valley
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SOURCE: NMS Properties, Inc.
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