Annex, a Scion community in Oxford, Ohio, serves University of Miami students.
Provided by Scion
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Consumers are increasingly concerned about the state of the economy, which has impacted yet another real estate sector: student housing.
The sector rent growth slowed to just 0.9% in July at 200 schools surveyed by Yardi. According to a report by Yardi, the average advertised rent fell to $905 per bed, down 1.4% from its $918 peak in March.
In the viewpoint, rent growth averaged 2.8% from October to July, less than half of the 5.7% recorded in the same period last year, well below the 6.9% seen a year ago.
“What we’re looking at is dropouts at the top and bottom,” said Robert Bronstein, founder and CEO of Scion, one of the biggest owners and operators of student housing.
Scion owns approximately 95,000 beds in 83 schools across 35 states and manages more than $10 billion in assets.
Bronstein said the students/parents who struggle most to buy a lower edge of the market, or a student’s home, are back to more historic and cheaper rentals on the outskirts of campus. High-end students/parents are also changing courses.
“People said, “What do you know, you know, there’s a building from three years ago, 30% cheaper than a brand new building, and you didn’t intend to use a hot tub on the roof anyway.
According to him, students are becoming more and more serious about their living spaces, preferring coworking spaces and remote interview rooms over golf simulators and cinemas. He said high-end amenities are no longer promoting occupancy. Cost reduction is the most important thing right now.
Scion plays in the middle market and acquires property at large schools, including Florida, Alabama, Oklahoma, University of Mississippi, Texas A&M, and Clemson University.
“We were very active last year. This year is very active. This may be the most active year,” Bronstein said.
He said there has been a change in investment in large flagship public universities after Covid, which is accelerating.
“Toptier, flagship public schools of 40, 50, 60,000 people. They post year after year of record registration growth. They don’t even have the ability to meet the housing needs that exist in these markets,” Bronstein said.
“I don’t think you’ll be bullish enough in Madison, Wisconsin, Ann Arbor, Michigan, Athens, Georgia, or Gainesville, Florida,” he said.
As he grows, he also gives Scion the advantages of the acquisition in today’s high profit environment.
“We’re looking at it, OK, this is the market we want to participate in. We’re not going to be there in 300 beds. We’re there in three or four assets and thousands of beds and we have actual sales leverage,” Bronstein said.
Bronstein said he was bullish as new developments were halted due to high construction and capital costs. This increases the value of Scion’s existing assets.
In its 2025 Student Housing Outlook Report, commercial property lenders Walker and Dunlop predicted a “dynamic” year for the sector.
“After macroeconomic headwinds slow trading volumes, the market is recovering as interest rates stabilize, institutional capital is convicted and registrations at major universities continue to increase,” according to the report.
The Southeastern Conference (SEC) continues to be the most active conference for student housing investment, and the Big Ten is gaining momentum as large schools see record-breaking registration growth.
It also highlighted the same shift from the high-cost buildings stacked with bells and hists, which Bronstein noted.
“While luxury amenities once defined the sector, the latest trend is a shift towards functionality, convenience and affordability,” the report states.
