How one investor is playing the school year

A version of this article first appeared in the CNBC Property Play newsletter with Diana Olick. Property Play covers new and evolving opportunities for the real estate investor, from individuals to venture capitalists, private equity funds, family offices, institutional investors and large public companies. Sign up to receive future editions, straight to your inbox.

Students are heading back to school across the nation and leasing student housing at a faster clip than they were last year. 

For investors, that creates new opportunities, but one leader in the field cautions that the differences in market fundamentals are widening across universities and regional markets. Some types of universities are seeing much higher occupancies and lagging construction, while others are overbuilt with falling demand.

On a national level, pre-leasing across the Yardi 200 — a curated set of the most important student housing markets, representing 90% of the institutional space — reached 89.1% in July ahead of fall move-ins. That is up from 88.1% in July 2025 but still below August 2025 levels of 89.9%. 

According to Yardi, 117 of the 200 markets surveyed in July were at or above their year-earlier pre-leasing levels, but there was significant variation across different markets. 

“New supply is increasingly concentrated in large markets, dragging down performance at schools with the most beds and weighing more heavily on national metrics,” wrote Tyson Huebner, director of research at Yardi Matrix, in the report.

Harrison Street Asset Management is one of the largest investors and developers in the sector, with more than $24 billion allocated across 432 student housing properties since its launch in 2005. Its investments total more than 238,000 beds across 200 university markets in North America and Europe. 

“Our conviction in student housing is really high, but our conviction in every student housing market is not,” said Mike Gordon, global chief investment officer for real estate at Harrison Street. “Frankly, I think that creates a really interesting investment environment.”

Gordon said there are a lot of investors trying to get access to the sector, but only a limited number of managers with long-term experience in it. Specialization, he said, is more vital than ever, because the differences between university markets have grown quickly due to funding cuts, enrollment and specific student demand. 

“Enrollment, applications, selectivity, research funding, student outcomes are increasingly concentrated at many of the leading institutions. Michigan, UVA, UNC, a number of the large public Power Four universities,” said Gordon, referring to the schools that belong to the four major athletic conferences. “Prospective students continue to value strong graduation incomes, alumni earnings, research capabilities, and many of the university markets that we focus on are really operating at or above 95% occupancy.”

He noted that housing supply has lagged enrollment growth at the universities in a number of these markets, specifically citing Virginia Tech, Auburn University and Penn State. 

“I think about the best university towns almost like factory towns where the factory is never closing. The university is the factory, and what it produces is intellectual capital. It attracts students, obviously, but also professors and researchers, entrepreneurs, companies that want to be close to that intellectual capital, and everyone needs somewhere to live,” Gordon said. 

Harrison Street acquires and develops assets on its own and through public-private partnerships with state universities. It has also been selling some of its assets given rising demand in certain markets. 

Earlier this year, Harrison Street sold a 12-property student housing portfolio for $910 million, one of the largest dispositions in the sector in recent years.