Student housing is sized more conservatively than conventional apartments, and priced only modestly wider. Across 19 of the 25 K-Deal securitizations closed from January through August 2026, lenders left a cushion for the annual re-leasing cycle, and pre-leasing for the 2026–27 academic year finished near the prior year’s record.
- Loans tracked 30 · 12,040 beds
- Cut-off loan balance $871M
- Weighted debt yield 10.0%
- Weighted cap rate 5.70%
How the loans are priced.
The weighted coupon is 5.38 percent, about 22 basis points over conventional loans of the same term. The caution shows up in leverage, not in the coupon: loan-to-value is 57.3 percent against 64.7 percent, coverage is 1.64x against 1.38x, and the debt yield is 10.0 percent against 8.4 percent. The capitalization rate is 5.70 percent against 5.43 percent. Value is $127,000 per bed against $220,000 per conventional unit, and the loan is about $71,700 per bed. Fifty-eight percent of fixed-rate balance is full-term interest-only, more than double the conventional share, which the lower leverage makes possible.
The beds.
Pennsylvania alone is 20 percent of balance, across 16 states. The largest loans finance purpose-built communities delivered from 2018 to 2021 beside flagship campuses. As of August, 95.9 percent of beds were pre-leased for fall 2026, against a 96.5 percent record for fall 2025 and a ten-year August average of 93 percent. Rent growth for the 2026–27 season was 0.9 percent. The expense ratio is 43.2 percent, close to conventional apartments, but turnover is total every August, so marketing, make-ready and furniture reserves weigh more. Properties built since 2010 appraised at a median $163,000 per bed, against $93,800 for older stock.
What that means for debt.
An illustrative coupon, marked to Treasuries at the end of September 2026, is about 6.50 percent — roughly 113 basis points above the first-half pricing in the tape. Sized to 1.30x coverage on a 30-year amortization, the loan is about $70,000 per bed, close to the $71,700 in the tape. Lenders underwrite trailing collections and the in-place pre-lease, not a peak rent roll. Distance to campus, the enrollment trend and on-campus bed supply set both the cap rate and the coverage requirement.
Loans are identified by market only. Debt figures are illustrative, marked to Treasuries as of 28 September 2026. For discussion only; not a valuation opinion, investment advice, or an offer to lend.