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s college students return to campus, commercial real estate brokers are eyeing the student housing market as a lucrative opportunity. However, investors and brokers must carefully assess each school before making a move. According to Jeff Brown, founder and CEO of T2 Capital Management, it's essential to separate the "haves" from the "have-nots" in the student housing space.

    Brown points out that smaller schools may struggle with declining enrollment and outdated facilities, while larger institutions continue to thrive. The threat of reduced federal funding under the Trump administration adds an extra layer of complexity to the market. To mitigate risk, Brown's company considers factors such as the requirements for living on or around campus for first-year students.

    When evaluating new student housing projects, Brown emphasizes the importance of ensuring that the numbers make sense. With construction costs remaining high, developers must deliver top-of-market rents to break even. Off-campus housing, in particular, offers a lower-cost alternative to students, making it an attractive investment opportunity.

    Brown notes that while off-campus housing is often purpose-built and lacks mixed development, colleges are increasingly seeking mixed-use student housing on campus. This trend aims to create a vibrant community where students can spend time and money near their dorms. However, finding the right cost for student housing without sacrificing profitability remains a challenge.

    As education costs continue to rise, Brown's company is considering the impact of reduced federal funding and changing loan products on student debt repayment. Prospective students are increasingly asking themselves whether the return on investment justifies the cost of higher education and student housing. This shift in mindset highlights the importance of assessing demand for each school and enrollment trends before investing in student housing.

    For commercial real estate mortgage brokers, Brown advises researching prospective schools, enrollment trends, and potential return on investment before encouraging customers to move forward. By carefully evaluating these factors, brokers can help their clients make informed decisions about investments in the student housing space.