August 2, 2016
Shares in student housing REITs Education Realty Trust (EdR) and American Campus Communities (ACC) have been performing very well over the past year. Memphis-based EdR’s stock price increased by 54% over the past year, while ACC prices were up 44%. In comparison, Bloomberg’s North American apartment landlords’ index is up 12% over the same period.
There are several reasons for the increase, one being that while enrollment continues growing, on-campus residences halls aren’t keeping up with the influx of students. Investors could also be trying to hedge against the possibility of a U.S. recession. “In an environment of striking political and economic uncertainty, public investors are ascribing value to [the] certainty of cash flows in student housing,” said Ryan Burke, an analyst at Green Street Advisors.
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