Part Three – Student Housing in Canada: Is There Room in the Class for U.S. Investors?
As an investment sales underwriter, I have a crystal ball that enables me to make the following predictions:
- While it will never be on the same level of the U.S. industry due to the market’s smaller size, the student housing industry in Canada will continue to evolve and grow. Purpose-built housing will become more attractive to residents, investor/developers, and Canadian institutions. P3 arrangements will gain traction and offer a logical option for Canadian universities looking to add to or upgrade their on-campus living facilities.
- The dominant players will be the ones able to convince the Canadian institutions that student housing is a stable, stand-alone, property type worthy of investment. Due to the many cultural differences discussed in part two of this series, as well as some financial- and market-specific considerations outlined below, the major players will be Canadian or Canadian/U.S. joint ventures.
Writing these blogs has allowed me to meet many wonderful people in the student housing business on both sides of the border and to reconnect with a lot of old friends in the U.S. industry. In talking to my American contacts, my question was simple: Would you look to build to buy or build in Canada? To my delight, there were several yeses and a few maybes. Though I’m not a tax accountant and don’t know the ramifications of a U.S. company owning real estate or operating a company in Canada, here are some of my observations:
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