National builder Deven Group is set to grow its student housing portfolio at top-tier colleges to over $1 billion over the next three years as rising enrollment at prestigious universities collides with a supply shortage and constrained construction schedule.
The company’s investments will translate to a 25% expansion of its current portfolio of student housing properties currently valued at $750 million.
“We see great opportunity for student housing development close to larger universities,” Thom Cunningham, Deven Group’s president and CEO, said in a statement. “Tier 1 institutions continue to see enrollment demand, and we take pride in delivering high-quality housing with the campus proximity and amenities students are looking for.”
Although student housing deal volume declined 71% in 2023 to just $5.7 billion, according to finance firm Walker & Dunlop, housing at the largest universities in the country has benefited from an imbalance in supply and demand as enrollment recovers from pandemic-era lows.
Fannie Mae estimates there were only 32,000 beds added during the 2023-2024 school year and expects that number to fall to nearly 26,000 by 2025 after peaking near 60,000 beds as recently as 2016. The decline in new supply, coupled with an increase in enrollment, has bolstered student housing performance above historical averages, the government-sponsored enterprise said.
According to Walker & Dunlop, there are now 1.34 full-time enrolled students for every bed at the 20 largest universities by student housing inventory.
Deven Group, whose formal name is Development Ventures Group, is a subsidiary of Tokyo-based construction and real estate company Kajima Corp. Annual revenues at the 180-year-old parent company exceed $25 billion across property classes.
Student Housing Projects
Deven Group has been active in student housing, amassing a portfolio worth $750 million that accounts for more than 2,200 beds at various stages of development. It has claimed a rent premium at student housing properties that can run as much as 20% above traditional multifamily projects as a prime driver of its investment thesis.
The company’s latest moves include the sale of The Henry, a 23-story, 440,000-square-foot student housing property near the University of Tampa’s campus, for more than $128 million.
Located at 100 E. Tyler St. in Tampa, Florida, The Henry consists of 537 beds across 188 units and averaged 93% occupancy since its completion before the 2021 fall semester. The project was led by Deven Group, and its partners Intown Group and Halstatt Real Estate Partners.
The deal closed in June with buyer Strategic Facility Partners and includes premium student-centric amenities, including a rooftop pool with a DJ booth, and a 24/7 grab-and-go market.
Additional multifamily projects include the $260 million Knights Plaza at the University of Central Florida. Completed in 2007 in a public-private partnership with the university, the development includes a 10,000-seat basketball area, 2,000 beds for student housing, 2,100 parking spaces, and 170,000 square feet of retail across a 23-acre campus.
The company also partnered with Ulster Development and Halstatt Real Estate Partners to build UnionWest at Creative Village in downtown Orlando, Florida. The $107 million project was completed in 2019 and consists of 640 beds, 12,000 square feet of commercial space, and 105,000 square feet of education space leased to Valencia College and the University of Central Florida.
Deven Group has long been active outside of student housing, having developed large office, entertainment and hospitality projects across the United States, including the CNBC global headquarters in New Jersey, the AT&T Park baseball stadium in San Francisco, the Waldorf-Astoria and Hilton Bonnet Creek Resort in Orlando, and the Aquarium of the Pacific in Long Beach, California.