The dormitory could recover quickly in the spring semester if the universities can reopen. Investor in student housing Fred Pierce is confident that this will happen after the election is over, regardless of the outcome. As a result, it is preparing for a spring and next fall rebound and continues to be an active buyer.
"Spring is going to be interesting," said Pierce, director and founder of Pierce propertiestells GlobeSt.com. “During the pandemic, there was a clear political demarcation between states with Republican governors pushing for more aggressive reopening of businesses and schools, while states with Democratic governors did the opposite. In my opinion, this is heavily influenced by Democrats' belief that the economy shutdown will benefit Joe Biden's election prospects, while Republicans believe that a recovering economy will support the president's re-election. "
In Pierce's view of the market, he expects the reopening to happen quickly after the elections. “I assume that after the elections in November – regardless of the result – the party-political stance in connection with the reopening of the economy will dissolve and unified efforts will be made to reopen it. Schools and universities benefit from this, ”he says.
Pierce continued to see heavy workloads in his portfolio during the fall semester, but he expects more students to return to school in the spring. "I anticipate that many of the few students who chose to study from home in the fall, perhaps 3% to 5% of students, will return to college in the spring and that some universities are offering more courses in person will." he says.
In addition, international students are also likely to return to campus, which further increases demand. “There could also be an influx of international students in the spring who have had problems with travel restrictions and visas that preclude them from coming in the fall, as well as made some decisions to stay in their home countries when the federal government announced they would Visas would be revoked for international students whose classes were fully online (since revoked). Therefore, we expect more spring moves in 2021 than in most years, ”says Pierce.
Pierce's outlook has also made him optimistic about new investment opportunities. He is an active buyer, although financing has been a challenge. "We are actively pursuing new acquisitions in 2020, but the capital markets – both debt and equity – are cautioned so that the transaction volume for the rest of the year will definitely be slower than in previous years," says Pierce. “However, during the pandemic, we completed the sale of a student housing project and acquired a portfolio of more than $ 100 million. The agencies currently only lend to existing borrowers and only to properties that are 90% or more let. That will be beneficial for us as current borrowers. "