Nearly two decades after its inception, the student housing asset class has emerged as a preferred niche sector for institutional real estate investment. As cap rates have compressed, and yields have lowered accordingly, in the traditional four main “food groups” of commercial real estate — multifamily, retail, office and industrial — savvy institutional investors have begun looking to alternative asset classes for better yield and diversification benefits. That is fueling growing institutional appetite for asset classes such as student housing, senior housing, self-storage, medical office, data centers and healthcare real estate.

An indicator of the growing interest in the student housing space comes from the Pension Real Estate Association’s annual Investment Intentions Survey, where “Other” real estate sectors (including student housing) garnered 14 percent to 18 percent of expected equity investment allocations in 2015, causing PREA to single out student hou