- Core Spaces plans to develop nearly 10K off-campus student housing beds in Tampa, Madison, and Knoxville.
- National demand for student housing is still recovering from the pandemic, driven by higher recent enrollment levels.
- Investors like KKR and Landmark Properties are capitalizing on growing stability and demand in the student housing market.
According to CoStar, developer Core Spaces is making a significant investment in off-campus student housing, with plans for nearly 10K beds across three major U.S. markets. The company’s expansion plan is the latest sign of recovering post-pandemic demand for student housing nationwide.
Key Student Markets
Core Spaces is actively developing off-campus student housing in three key markets:
- Tampa, FL: In collaboration with RD Management, Core Spaces plans to build 3K beds, 150 traditional apartments, and 10K square feet of retail space. Construction will start this fall and is expected to be completed in 2027.
- Madison, WI: Core Spaces aims to develop more than 7K beds across multiple projects, with completion dates ranging from 2026 to 2028. Key projects include a 12-story tower with 910 beds and 20 KSF of retail space, a 15-story tower with 1,723 beds, and another 15-story building with 1,330 beds.
- Knoxville, TN: Partnering with Schenk Realty, Core Spaces plans to develop 2.8K beds along Cumberland Avenue, featuring two 10-story towers, a 7-story building, and 30 KSF of retail space.
What Enrollment Cliff?
Student housing demand has risen steadily since headline-making campus shutdowns in 2020 and 2021. Despite a slight dip in pre-leasing rates for the 2023–2024 school year, the sector’s performance remains above historical averages, according to Fannie Mae.
However, new bed additions have fallen significantly, from nearly 60K student beds built in 2016 to an estimated 26K by the end of 2025.
Returning Investor Interest
Investors are once again coming out of the woodwork, attracted to the perceived stability of the recovering student housing sector.
Fannie Mae reports a favorable supply-demand imbalance in the current market, with serious potential for premium rents. Walker & Dunlop also discovered strong enrollment growth at major universities, creating high student-to-bed ratios that require additional student housing.
Unsurprisingly, KKR & Co Inc. (KKR) recently agreed to buy a 19-property student housing portfolio from Blackstone (BX) for $1.64B. Landmark Properties has also made significant acquisitions, including a 67-acre site for an 826-bed development in Columbia, SC, and a 321-bed complex near the University of Texas.
Why It Matters
Core Spaces’ ambitious expansion plans for off-campus student housing, alongside major acquisitions by KKR and Landmark Properties, are all positive signals for the recovering sector. Deals are starting to look much better, especially near major universities.
But while some U.S. universities will always see high applications and enrollment figures, this is certainly not the case for all colleges and universities nationwide. The now-infamous enrollment cliff, which was emerging even before the pandemic, is a real problem investors will have to account for.
