For the 12 months ended March 31, sales of student housing properties of nearly $2.3B (billion) comprised 8.7% of overall apartment market activity, marking the largest percentage ever for this niche. Pricing of $169,600/unit on a 12-month basis was up 63%, led by the sale of Gramercy Green, a Manhattan property, which sold for more than $900,000/unit. Per-unit pricing for all other apartment properties decreased 6%. Sales volume for student housing properties in Q1’09 was only $80 million, off 50% from Q4’08 and down 80% from Q1’08. Sellers are achieving just 88.7% of their asking price.

Average cap rates for student housing properties for the 12-month period increased 44 bps YOY (year over year), while caps for all other apartments rose 43 bps. The Southeast had the largest regional sales volume at $730M. Manhattan, with $320M in sales, was the only market to top $100M in volume. The top 25% of student housing assets sold for more than $200,000 per unit at lower than 7% caps, while the bottom 25% reached cap rates of 7.8% caps and achieved less than $85,000 per unit. On average, that price-per-unit spread was greater for student housing assets than for other apartments.

Real estate investment trusts (REITs) were the most active buyers in the niche, accounting 52% of volume, but they remained net sellers with 62% of all dispositions. Private investors and developers, the next most active group, both acquired and sold 24% of all properties.