Don't Be A Fool, Stay In School With This 4.9% Dividend REIT

The recent article by Hoya Real Estate notwithstanding, we still maintain a position in the Student Housing REIT sector and put more weight on the positives outlined by Hoya than the negatives. When the article was first published, my initial thought was, 'oh no, what did I miss'. The title is "Student Housing: Fundamentals Remain Challenged". After reading the article, I agreed with most of what Hoya mentioned, and that bodes well for my thesis because Hoya is probably the best REIT analyst on Seeking Alpha, even if he doesn't get the most page views.
In any case, the fundamentals for student housing are challenging, but the trend towards public/private partnerships, the tighter educational budgets, and the quality of product that both ACC and EDR are putting out means that growth will continue despite the supply challenges. And, one thing Hoya mentioned but didn't elaborate on, is that Student Housing REITs are more defensive than many other REITs. We are certainly closer to the next economic downturn than we are to the previous one and when it will happen is anyone's guess. But when it does, and people start losing their jobs, they go back to school - and that's why they are defensive. I don't agree, however, that these REITs are more sensitive to interest rate increases. As rates rise, unlike Healthcare REITs with much longer lease terms, Student Housing REITs can reset their prices annually.
So while the article's title seemed... Read more

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