Randy Churchey, CEO of Education Realty Trust, Inc. (EDR), says supply and demand dynamics are shifting in his company’s favor. He says demand is very constant, and he expects a 1.2% enrollment increase per year.
“A significant piece of that — and one that our investors know — is that we are a recession-resistant business,” Churchey says. “When a recession occurs and students don’t have jobs, enrollment actually goes up, which is obviously vastly different than the multifamily apartment or other sectors.”
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While demand remains constant, Churchey says that supply is dwindling. For 2015, new supply of student housing diminished 19% from the previous year.
“We haven’t announced that same number for 2016 versus 2015, but it is going to be a further decline in new supply,” he says. “So when you look at our business just from the fundamental real estate standpoint of demand and supply, it looks pretty good for the next few years.”
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