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Off-Campus Apartment Leases Down for Fall 2021: Investor Impact?

Jan 22, 2021 by Barbara Zito
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At the start of the pandemic lockdown back in March 2020, many privately owned student housing communities stayed open while the campuses themselves shut down and administrators told students to go home. As schools quickly pivoted to online learning for the remainder of the spring semester, many students continued to pay for their student housing, reported.

Students were also eager to sign on -- and keep paying rent -- for fall 2020, even though that semester was a mixed bag for college life. Some campuses stayed completely remote; some instituted a hybrid format for instruction; and others opened up completely, if only to shut down again because of outbreaks.

This month, as students geared up for the spring semester, student occupancy rates at off-campus housing are hovering around 87%, according to But preleasing is down for fall 2021, RealPage reports. Still, it was only slightly below that of 2019. Housing close to campus (within a half-mile) was 89.2% preleased in August 2020, while those situated farther from campus dipped below 88.3%, the national average for preleases.

Will there be a return to campus in fall 2021?

Even though the vaccine distribution is making students cautiously optimistic about a triumphant homecoming in 2021, they still aren't signing leases in droves. By the end of December 2020, RealPage reports preleasing for fall 2021 is only at 25.9% of units as opposed to 32.4% of units as it was for fall 2020. To be fair, preleasing for fall 2020 started back in December 2019, before the pandemic. Knowing what we know now, it's easy to see why students are slow to sign.

Why investors should remain optimistic

Campus life has been a bummer this year for sure. But there's hope for investors -- without having to cut rents or offer concessions. Here's why.

On-campus housing is crowded

Unless students come back vaccinated for the fall term, dorm rooms and suites have the potential to be 24/7 superspreader events in their own right. As a result, residence halls might not be open at full capacity, forcing students to look to off-campus housing where there's more space to live and study amongst others.

Home life might not be conducive to study

There had been some concern among investors about students continuing to stay home if instruction remained remote. But competing for space with parents who are also working remotely and younger siblings who are homeschooling is enough to send students packing back to student housing.

Study abroad plans have been grounded

Another thing that has impacted student housing situations is the cancellation or postponement of many study abroad programs due to travel restrictions. An off-campus apartment is a poor consolation prize to living in, say, Barcelona for a semester, but for some, it sure beats staying at home with the 'rents.

Students are returning from a leave of absence

Many college students, dismayed by the thought of a less-than-stellar college experience, have taken a leave of absence. Some incoming freshman might have even taken a gap year. Guess what? Many are coming back in fall 2021, and they'll need a place to live. Freshmen traditionally live on campus, but it all depends on what the residence halls can safely and responsibly handle.

The bottom line: Hope for a homecoming victory

College life is more than just studying. It's about making connections with professors and fellow students -- and yes, there's usually a party going on somewhere. Campuses have been lonely without students, staff, and faculty, and university administrators are eager to welcome everyone back. There might be some nail biting for investors in the interim, but student housing leases should be on the upswing again soon.

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