When the coronavirus outbreak first hit, many colleges were quick to do what employers across the country did: make everything remote. In fact, a lot of institutions shut down for in-person learning, not just at the start of the pandemic but for the semesters that followed.
Now, as things have improved on the coronavirus front, many schools are gearing up to welcome students back for in-person learning. Others may be looking at hybrid learning models that allow for some schooling to be done at home.
But a number of high-profile MBA programs won't be offering a hybrid or remote model this fall. Instead, they'll be asking their business students to return to campus and attend classes in person.
Columbia, Stanford, NYU, and the University of California at Berkeley are among the most notable names to be adopting this approach. Their goal is to resume the traditional business school model that allows students to collaborate and foster connections. And this decision really could work to real estate investors' advantage.
On-campus learning means more student housing demand
Students who pursue an MBA on campus often need someplace to live in close proximity to the school they attend. That's why people who invest in student housing tend to do so well -- because there's pretty much always demand for university-adjacent accommodations.
That changed during the pandemic, though. When schools closed for in-person learning or offered virtual or hybrid options, students could suddenly avoid having to relocate to complete their studies. Now that these MBA programs are sticking to in-person classes, it could lead to an uptick in housing demand once again.
A solid investment
The fact that several prominent MBA programs won't go hybrid or remote is good for student housing, but the sector is poised to grow regardless of that decision. Net operating income for student housing is expected to grow almost 2% after 2025, according to commercial real estate intelligence firm Green Street. As such, now may be a good time for investors to look at adding income properties to their portfolios near universities or otherwise load up on student housing REITs (real estate investment trusts).
Will the delta variant force schools to change course?
The delta variant has the potential to upend a lot of reopening plans. Office buildings, for example, could get hammered if companies decide to postpone a return to in-person work due to COVID-related fears or concerns.
The good news, however, is that many colleges are requiring students to be vaccinated against COVID before returning to campus, so that safeguard is already in place. And since college and MBA students are, by nature, old enough to get vaccinated, it's also not an unreasonable ask.
As such, while the delta variant might impact other areas of the real estate market, its impact on student housing may be minimal. And if more MBA programs adopt a similar approach and decide that in-person is the only way to go, there could actually be a boom in demand that makes a lot of investors wealthier in the near term.