Student Housing, One of the Most Hyped Asset Classes, Runs Out of Students

Here’s the story of two student housing REITs in the UK that crashed.

Wolf here: In recent years, student housing, a subcategory of Commercial Real Estate, became one of the hottest asset classes in the US, in the UK, and elsewhere. Big money piled in. Wall Street raked in the fees by securitizing the mortgages into commercial mortgage-backed securities (CMBS). Large firms spun off their portfolios of student housing buildings into publicly traded REITs. The article below is about two of those REITs in the UK, but the issues are the same in the US. This asset class is risky even in good times because students are not stable renters. Last fall, long before Covid-19 showed up, delinquencies and special servicing rates on US student housing CMBS already spiked. The pandemic has now been heaped on top of it.

By Nick Corbishley, for WOLF STREET:

When it comes to over-priced acquisitions at peak hype, there is no worse time than just before a financial crisis. The UK’s largest student housing real estate investment trust (REIT) Unite Group fell into that trap. In November 2019, it spent £1.4 billion to buy up privately-owned student housing provider Liberty Living Group plc, from the Canada Pension Plan Investment Board. In the process, it more than doubled its net debt, from £856 million to £1.88 billion. The day after the deal was sealed, Unite’s CEO said the enlarged group would “be well positioned to meet the growing need for affordable, high quality student accommodation in university towns and cities where demand is strong.”

That need, instead of growing, has all but vanished. Since March 11, all UK university campuses have been closed due to the virus outbreak. Most students have gone back home.

In late April, Unite Group informed investors that it had been inundated with cancellation requests since offering to waive rents for students who did not plan to occupy their rooms in the final term. Based on requests received up to that point, between 43,000 and 46,000 students would not pay rent this semester, the company said. The total number of vacated beds is the equivalent of 65% of Unite’s portfolio.

As a result, the company said it expected a fall in income from the 2019/20 academic year of 16-20% on a Group share basis, or £125 million, which it said was an improvement on its previous forecasts. But that was before Cambridge University’s bombshell announcement last Thursday that it was cancelling all face-to-face lectures for the entire 2020-2021 academic year, fueling speculation that many students will stay away next year too.

“Given that it is likely that social distancing will continue to be required, the university has decided there will be no face-to-face lectures during the next academic year,” the university said in a statement. “Lectures will continue to be made available online and it may be possible to host smaller teaching groups in person, as long as this conforms to social distancing requirements.”

Given Cambridge University’s import and influence, the move is likely to trigger a cascade of similar announcements from other higher education institutions. If that happens, student life in the UK is set to be a more insular experience for the foreseeable future, dealing a massive blow not only to students, professors, lecturers and other university staff but also to the businesses and communities that have come to depend on the income they generate.

Those businesses include big corporate providers of student accommodation and private landlords, some of whom have continued to charge students for digs they no longer occupy. Many of these companies have enjoyed years of surging profits on the back of years of soaring student rents. One of the largest REITs, GCP Student Living, reported a 51% rise in profits in its last financial year alone. GCP was the first REIT invested exclusively in student housing when it came to the market in 2013, and since then has given its investors a return of 12.9% a year.

But that was before the arrival of Covid-19 and the UK government’s subsequent imposition of lockdown and social distancing measures put its entire business model on hold. The shares of both GCP and Unite Group have slumped by 47% in the past three months. GCP’s stock is now trading at the same price it was trading at in October 2014. In the case of Unite Group, some £2.5 billion has been wiped off its market cap since the coronavirus crisis began.

Unite has already had to come to terms with the likelihood that many foreign students — a key customer segment — will be staying away from the UK, at least for the next year, and is now focusing most of its marketing activities on UK-domiciled students. For British universities and the businesses that have sprouted up around them, overseas students have become a vital source of income. For a start, they pay twice as much or more in fees than UK students, who pay £9,250 a year.

China is the largest source of international students in the UK, with 115,014 study visas issued to Chinese students in 2019 – 45% of all such international visas. But according to a British Council survey of 11,000 Chinese students considering studying in the UK next year, 22% say they are likely or very likely to cancel their study plans. Another 39% say they are still undecided about whether to cancel.

It’s not just foreign students who are having second thoughts. A recent survey of UK-domiciled undergraduate applicants found that more than one in four students are willing to delay starting their courses if universities are not operating as normal due to the coronavirus pandemic. As such, if many universities follow Cambridge’s lead and cancel face-to-face classes and enforce strict social distancing, there would be 120,000 fewer students when the academic year begins in autumn.

That, coupled with the diminished numbers of overseas students, means British universities are now staring at a gaping hole in future revenues. To plug that hole, they’re already asking the UK government for a £2.2 billion rescue package, which the government has so far turned down. By Nick Corbishley, for WOLF STREET.

“The stimulus the country urgently needs is not experimental and dangerous monetary policy.” Read…  What Horrified Fund Managers, Banks & UK’s Pension Minister Said About the Bank of England’s Sudden “We Don’t Rule Out” Negative Interest Rates

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  123 comments for “Student Housing, One of the Most Hyped Asset Classes, Runs Out of Students

  1. 2banana says:

    Students, today’s lesson is on contracts.

    As in, if you voluntarily enter/sign one, you better have read it, understand it and know the penalties for not adhering to the contract.

    This is a good life lesson as the pain for a part of school year’s housing not being utilized pales in comparison to getting a poorly understood expensive mortgage that will eat you alive.

    Hopefully, the next future lesson will be on how “Big Ed” finally gets smacked and starts looking on how to make higher learning more affordable by lowering its actual costs and not by asking for more government subsidies/guarantees.

    • sierra7 says:

      So what! Go ahead. Make my day and sue me…..

      • 2banana says:

        UK vs US laws are different on how businesses can collect debts.

        Good series to watch to Netflix. The HCEO nearly always get their money and are some of the most polite (and patient) folks on the planet in debt collection.

        “Can’t Pay? We’ll Take It Away! is a factual/reality documentary series on Channel 5. It follows the work of High Court Enforcement Officers (previously known as Sheriffs) as they execute privately obtained High Court writs across England and Wales on behalf of private clients, on those who have failed to make repayments on alleged debts or refuse to vacate a property.”

      • Joe Saba says:

        it’s not like you had future with sports degree anyway

      • char says:

        Students are known to have fast amounts of money, especially in their name.

    • Javert Chip says:

      Students, today’s lesson is on the FINANCIAL REALITY of contracts.

      Almost regardless of the contract, suing 43,000 individual students scattered all over the world, most of whom are relatively poor, for $500 of missing rent resulting from a global catastrophe is a public relations disaster and financially pointless: securing judgements and collection costs far exceed the contract obligation.

      • char says:

        You assume they would get judgments in their favor. Living with ten strangers close together is not a situation i would call covid proof. With a bit of bad luck they will also need to return the payments of students that stayed because housing was considered unsafe.

    • char says:

      It is normal for a part of the student population to not finish their study. I assume that a large part of those students also empty their student housing. So how are those contracts dealt with?

      It would from a societal point of view be idiotic to force failed students to pay.

      • El Katz says:

        Following Char’s logic, a student who fails their courses should not be forced to pay the tuition. Or the student who fails to get a job in the field of study should get a refund of tuition paid.

        Life has consequences…… Better to learn those when you’re 20 than when you’re 60.

        • char says:

          You don’t need to pay next years tuition. And this years tuition was already paid.

          ps. IIRC if you stopped in the first semester you could get money back at my university. But that was long ago

        • Portia says:

          Consequences! LOLOLOLOL!
          Jamie Dimon, call on line 1!

        • Ed says:

          Lately, the consequences haven’t been consistent.

          If you’re a bank and made really, really bad investments in no-income mortgages? If you’re a company that squandered your cash flow on stock buybacks and even took out loans to buy back that stock (and goose executive pay)?

          Not much in the way of consequences yet. The Fed helps these bad actors out.

          I expect the REIT’s to try to get their money back and that they’ll get some. But it’s hard to chase after a student for rent if he’s not living there and has no money.

      • Petunia says:

        Onsite student housing is charge by the colleges along with tuition, dining plan, and parking. It’s paid for by student loans as well. So the housing is financed, the REITs get their money up front.

        • char says:

          Onsite (or university provided) student housing is rare in my country. Your landlord is not the same guy as to which you pay your tuition. I think the same is true for Britain. Also people don’t all finish their university education at the end of the school year and doing Erasmus while still paying for a room is a bit expensive.

          I think the difference in viewpoint is because i thing i’m used to a different student experience than America. You don’t have single industry towns with as main industry college but big towns that have universities/colleges. Often those universities have multiple sites inside the town and no real campus. And the university does not provide any housing. There is always a big shortage filled partly by (illegal) sub-lets, the right contacts and dads wallet. And by the dance from really bad rooms to better rooms to girlfriends rooms to kicked out by ex rooms. The good rooms never had a problem finding new rents so they never did difficult and the bad rooms could not really go to court as they were to bad, illegal or had tax issues

    • GotCollateral says:

      The problem here is that these assets were acquired with the expectation that in the years going forward, students will be living in them and paying for it, and assumed no time in between that would not be the case… on massive leverage…

      Students might get shafted for stuff already paid for, but they have no obligation to pay for services not rendered in the future…

      • GotCollateral says:

        And this was under the backdrop of increasing debt loads on students, while decreasing rate of students attending universities for about 10 years…

        10 years of negative divergence should have been a warning sign… lol

        • Stevie says:

          So a recent newspaper article surmised that the riskiest student debt is graduate debt, as there are no federal limits, graduate tuition is more, and grad loans carry higher interest rates. And that a think tank report noted that for the 2017-18 academic year, grad students were 15% of enrollment but 40% of federal loans. While also hinting at disproportionate grad debt percentages for prior years.

        • rhodium says:

          A bunch of them will turn around and be told they’re overqualified anyway.

          Some of the jobs I’ve seen that say they require a master’s degree with x amount of experience also surprisingly don’t pay much considering.

          Pricing is terribly out of whack, yet everything keeps getting dumber. How dumb do things have to get before it all fails.

      • Jack Davis says:

        If you look at the lease you will find that the parents co-signed the lease, st least here in the US and none of the large REITs or landlords have given refunds or allowed the students to break the leased
        The REITs Claim that there April collections were 90 plus percent

        • GotCollateral says:


          Sure but that thru the current school year. But what about summer 2020 (summer students), or fall 2020, or spring 2021?

          Investors we’re expecting similar cashflow gonna get shafted…

    • timbers says:

      Students, today lesson is on contracts.

      1). If you’re a student or any other variant of The Little People, you owe us. Because it’s a contract. Not to pay us will destroy you’re morals (“moral hazard”).

      2). If you’re a VIP, rich, a bank, Wall Street, a Junk Bond Hedge Fund or just a hedge fund or lobbyist, a gigantic company that does lots of stock buy backs, it’s not a contract. You can get a loan but you don’t have to pay it back because that’s not moral hazard. And if you want to pay it back but can’t, you’ll get bailed out anyway so don’t worry. In fact, recently they started giving you “loans” that they tell you from the beginning you don’t have to paid back at all…right from the get-go. So much easier that way.

      3). If you’re Little People and we owe you…like a retirement we promised you – that’s not a contract. Go f… yourself.

      4). If you’re rich, a corporation, Wall Street, VIP, a bank, Hedge Fund Junk Bond Fund, Wall Street, and you lent to Little People, it’s not just a contract – it’s a SACRED contract. A sacred contract is an extra special contract with cinnamon and sugar on top. They must pay you back. If they don’t, you’ll likely get bailed out but see your lobbyist for any updates details subject to change at any time. Don’t worry, the Ivy League educated Supremes will back you up every time (it’s sacred remember).

      • Daedalus says:

        Bravo, timbers.

        Student housing in the US was never wanted by most students, anyway. At my University, when the school got a grant to built housing, it had to force students to live there in order to fill it to the occupancy level required by the grant.

      • Stuart says:

        Parasites being eaten by a virus.

      • VintageVNvet says:

        Good one almost a board!
        Almost as if you are some local, both in time and geography seeing and describing accurately what you see to those of us either elsewhere in time or in location.
        Thank you for the wit, implied if not specified wisdom, and words.
        Tried to get Wolf to harbor next round of Constitutional Amendments, ”21st Century Bill of Rights,” etc., but he said no.
        So still hoping some youngster, ( certainly an optimist one would think, though that may be as much burden as benefit, ) will be willing and able to take on the banksters, etc., etc.
        WE the PEEDON need at least another Bill of Rights,,, and likely we need, also a 21st Century Declaration of INTERdependence or some such as an introduction, similar in tone and temerity to the original.

        • Tom Pfotzer says:

          Why are we waiting, expecting…some young person to assume and discharge the responsibility that we gray-hairs should be executing?

          Not to single you out, Vintage. You are more courageous than most – you are actually speaking about these horrors. And, better yet – you are advocating for others in your cohort to take up the shield and sword and do battle.

          The responsibility to right the ship, to bail out the hold and plug the leaks belongs with the the people – the individuals – most proximate to the crime. That’s us, Boomers. It was on our watch.

    • John Taylor says:

      I think the lesson here is more about investors and risks.
      Students aren’t typically rich – trying to force students who are suddenly sent back home to attend classes online to pay rent for units they are no longer occupying is just not a viable business plan.

      Good luck with your new debt collection gig – I bet you have just as much luck hounding the newly unemployed for gym memberships near their former workplaces in gyms that are shut down anyway.

  2. Anthony says:

    Yep, as I’ve said before I live very near Manchester University and not that far from Manchester Met and the Music College. Since March, the place has been a ghost town….all the 60,000 students just went puff and disappeared…..quite a magic act…..Oh and the, summer English language students, won’t be coming to brush up on their English……they fill the appartments after the students go home for their summer break………..

    • Joe Saba says:

      at University of Arizona – new student high rises have been going up in mass for past 5 years
      as soon as they’re built – builder flips them
      and all those alum built monsters now sit empty
      I’ve said for 30 years that if you donate building then you also need to donate 30 years worth of operating expenses

      • faifo says:

        Will they be the second new ghost town(s) of the west? An Irish economist, quite famously, used the example of Arizona’s previous building boom/bust to warn Ireland of impending doom in 2008…

  3. andy says:

    Isaac Asimov described it in his short story “The fun they had”.
    Study From Home is here to stay.

    • Greg Hamilton says:

      I met Mr Asimov, a brilliant, witty man, who had many insights into the future. The story you mentioned unfortunately is very prescient.

  4. Whatsthepoint says:

    On the brighter side, my daughter, who’s doing a PhD in engineering at a Russell group university, is looking for a new rental as her lease expires soon, and lo and behold, the asking rents seem to be softening. Although some landlords are playing chicken….

  5. lenert says:

    In liquidation, who gets the properties?

    • Joe Saba says:

      whomever bids highest at trustee sale
      bank/lender if no one meets min. bid

    • Petunia says:

      This could be an issue because most of the universities still own the land, especially public institutions. The schools get rent from the REITs.

    • Wolf Richter says:

      If they’re used as collateral, the lenders get the properties.

  6. robt says:

    What seemed like can’t-lose REIT business, significantly financed by a student-loan government agency – what could go wrong?
    Even the idea of shutting down the education system, mainly populated by younger students with negligible risk due to the current virus would seem to be a remote, close to zero, possibility. But here they are, after a couple of months, in a state of collapse.

    • char says:

      The lecturers are not young and students may have a small change of dying but they do have a big chance of getting mildly sick and spreading the disease.

      • Ed says:

        Not to mention to the locals in the college town or city.

        Students who feel they are impervious to the virus, hanging out together at the university have to be just about the best virus vectors one could find. Perhaps second to same students on spring break.

  7. Bet says:

    When I ventured to the University of Washington campus last November , I was a bit jolted by the number of obvious foreign Chinese students. I guesstimated at a it over 1:1. Hubs thought it was higher. I heard more Chinese spoken than English.
    It was a wow moment. There were some Indian students as well. But the overwhelming number was foreign. I wonder what the fall will bring.

    • Stephen says:

      Perfect set up for espionage, intellectual property theft and ‘knowledge transfer.’ Do we see hundreds of thousands of US students headed to China? The student visas from the mainland should have been shut down years ago. Of course, this is a two way game for the CIA. Don’t think that the agency is not trying to ‘turn’ some of these students to use them as assets. But on balance, foreign students ‘take’ more than they ‘give.’ They may pay the full freight as far as tuition (most of them), but universities of all yokes are still heavily state and federal funded. Hence, the students coming here are indirectly subsidized.

      Of course, may be we can charge back some of their profits – let’s say 10M a year for tuition.

    • Megan says:

      In the California state college system, there are three price tiers for tuition. The first is the in-state (California residents). The second is out-of-state tuition which is about double in-state price. The third is the international student tuition which is about three times the in-state price.
      I was at SJSU in 2008, and my tuition was around $1,800/semester while the international students were paying just under $6,000.
      There is a financial incentive for the schools to accept international students — at least in California.

      • Stevie says:

        Yes, to the point that formal complaints were made to California universities to the effect that international students were displacing domestic, at least at the more popular schools. I believe that resulted in a cap for international enrollment.

      • Ed says:

        Same at other major state schools, like the University of Michigan, which used to have the highest percentage of Chinese grad students outside of the west coast.

        The states — at least Michigan — don’t pay like they used to do. The universities have filled the hole with out-of-state students and international students. This has been going on a long time in the Midwest, where the state budgets have been under pressure for years and years.

        If Chinese and Indian and Middle Eastern students stop coming to American universities, that’s going to be really rough on the budgets. Also the research. I think almost half of engineering school researchers are not U.S. born in major universities here . . .

    • lenert says:

      They still teach Bulgarian at the Udub but not Salish.

      • Ed says:

        Speaking of Bulgaria, name the other three countries with the least efficient health care systems in the world, according to Bloomberg (it can be googled).

        Bulgaria, Azerbaijan, and Russia. Of course, along with the USA.

        We also have similar company where prison populations are concerned, but there we win outright, I think.

        It’s a bit of a shock to think the U.S. can end up on the wrong end of these lists . . . even if we could move up or down a little bit if the metric were changed, I suppose.

  8. MF says:

    Funny how a REIT purchases the entire asset set from a private equity group at full pop. Stunningly, things start going sour right away — even before covid hits.

    Hmmm. I’m sure it’s just a coincidence.

    • nick Kelly says:

      ‘Stunningly, things start going sour right away — even before covid hits.’

      They bought it in November 2019. First word of the virus in China was 2 months later. Where is the intervening period before covid hit, where thousands of students cancel their plans before covid hits ?

      There isn’t one . Like countless millions of major transactions just before covid hit , the seller was lucky and the buyer unlucky. The crash in rentals coincided with the Universities cancelling their programs.

      • MF says:

        Did you miss Wolf’s foreword? The asset class was already going sour when it was offloaded to the REIT and insiders knew it.

        Lucky sellers, indeed.

        • GotCollateral says:

          Loads of people will blame their decade(s) worth of faulty decision making process on covid… and it wont change a thing lol

          Just like most people around here weren’t paying attention to SOFR and collateral spreads before frbny brokest dealer repo went tits up in sept ’19… lol

      • MF says:

        I’m sure it’s just a coincidence that the “unlucky” buyers are retail investors who typically choose their investments once a year from a slick brochure showing investment “products” using color-coded risk profiles.

        • nick Kelly says:

          From Wolf’s piece

          ‘One of the largest REITs, GCP Student Living, reported a 51%
          rise in profits in its last financial year alone. GCP was the first REIT invested exclusively in student housing when it came to the market in 2013, and since then has given its investors a return of 12.9% a year.

          But that was before the arrival of Covid-19 ….’

          And BTW: The REIT is not a retail investor. It is a corporation with a board and when a member is asked: are you saying the failure of due diligence is due to an inability to predict Covid in November 2019, he’ll say ‘obviously ‘.

  9. frankie says:

    Salford Uni closed, sent their pupils home and didn’t charge them for their student digs after Easter. Can’t see the students rushing back. As for Chinese students returning just can’t see that and that is a big big hole in the whole student business.

    • backwardsevolution says:

      A lot of the international students studied abroad not so much for the education, but to get a foot in the door re immigration.

      As one expert in the field put it: this was mainly about immigration on the part of the students, and building monolithic campuses with unconscionable salaries for the administrators.

      Foreign students can learn just as well in their own countries, at their own universities.

      • char says:

        Some colleges departments are world class and can’t be studied at that level back home. But it is not true for most

  10. sierra7 says:

    It seems the idea of college educated people at a university in a physical sense is part of the purpose of that education. Not only a co-mingling of the variety of minds but the same of the physical presence of body. The mixing and churning of that physical presence along with the minds is what is supposed to be the objective of having that congregation so that learning is not only academic, but social. I believe that good, solid upper learning institutions will gradually re-open. Isolating college instruction will result in a partial education, not a whole one.

    • Stephen says:

      I am trying to understand how they are running many STEM courses. You can probably teach French Lit on line, but definitely not Chemistry. When I took chem at Duke in the fall of 1976, the labs were like a third of our grade. Same with many engineering classes. If you are going to think you can take chem or bio 101 on line, save your money and go to YouTube. If you are a university student and taking lab oriented classes without the labs, you are missing the most important part of the experience – actual hands on experience in the lab!

      • MC01 says:

        Chemist here: after the first year I dare to say our courses were 40-50% laboratories and the reason chemistry was the most expensive MM.FF.NN. course in my days. By comparison physics was about 30-40% laboratories: we used the Physics Department a lot so I came to know it even better than our department, where many areas were off-limits to students.
        I have literally no clue how they could shift some things (organometallic reactions to say one) online.

    • Javert Chip says:

      “…churning of that physical presence….”

      Yup; that’d be the part I enjoyed the most while in college.

  11. BuySome says:

    1880-1950…If we run profitable factories, we can afford to run eductional facilities.
    1950-2020-…If we sell education, we can start shutting down those factories.
    2020-….China re-opens factories after short interuption. We have??? Prime locations to build factories? Make noodles, not debt.

    • MC01 says:

      At last check the China Manufacturing PPI was running in the 35-40 range: pure recession territory. Factories have re-opened, many of them for over a month now, but orders aren’t coming.
      While the backlog of oil tankers is slowly being cleared, bulk carriers remain moored off China’s ports by the dozen. There’s no room to unload the iron concentrate, coal, scrap metal etc they are carrying.
      Container ships are better but far too many remain moored off the Pearl River and Yangtze Deltas: the “boxships” are waiting for enough containers to be ready for shipment to at least break even for their owners but, again, orders are not pouring in as fast as their government expected. In short the great plan to ride the virus to the top of the world failed miserably and now comes the biggest challenge of the Post-Mao Era: this thing will make the backlash from Tienanmen look like a walk in the park… if the local government allows to walk in the park, of course. ;-)

      The Bureau of Statistics in Beijing will undoubtedly regale us all with more of their now familiar feats of data adjustments. CAAC (Civil Aviation Authority of China) may even pay airlines to fly around aircraft well below breakeven to show how fast China is recovering, but not even Chinese authorities can order commercial vessels to turn off their transponders in what is one of the world’s busiest sea lanes. The hundreds of vessels moored in front of the Chinese coast for weeks now are second only to the absolute catastrophe in front of Singapore as an indicator of the challenges Asia faces.

      • Anthony A. says:

        The mood around these parts (southern Texas) is do all you can to avoid buying anything (it’s mostly junk anyway) made in China.

        • Rcohn says:

          Then people in South Texas are not shopping at Amazon ,Walmart, Target and Costco

        • Shiloh1 says:

          Best shopping for tools and garden equipment in Great Lakes area is usually at an estate sale of a Silent Generation. Craftsman hand tools mostly, Milwaukee electric power tools when they were made here, sometimes drill presses and lathes.

      • Nescio says:


        Great points. What do you feel is “the absolute catastrophe in front of SG?”.

        • MC01 says:

          Commercial vessels. Literally hundreds of commercial vessels moored in front of Singapore and now east of the Straits because they were starting to be a navigational hazard.
          These ships have literally nowhere to go: they range from the enormous bulk carrier Knightship (owned by Seanergy Maritime of Greece) to the smaller bunkering tankers used to refuel larger commercial ships. It’s not like I’ve never seen anything like this before: nobody could have ever imagined something like this.
          I am honestly surprised nobody has sent up a drone to film all these ships because it would make something equally amazing and gut-wrenching.

        • Thomas Roberts says:


          Allegedly the unemployment rate in China is at least 20% at this moment, according to the Chinese dissidents, over at new dynasty television

        • Thomas Roberts says:

          This was before the new massive lockdowns they are supposed to start in China very soon.

        • char says:

          What is the normal unemployment rate and how does the future look and do they get a kind of unemployment benefit.

          Also, i have the feeling that North Korean State Television is slightly more reliable than New Dynasty TV

        • Thomas Roberts says:


          Have you ever been to China?
          It was kind of an interesting place for a while, even though, it wasn’t that great, but, since Xi took over. It has been turning into a totalitarian prison. If you think it’s so great, move there. And then you can tell us, whether, new dynasty television or the global times is more accurate. I already know, which one I believe.

          The only reason I don’t fully back the 20% unemployment number, is because, of how difficult it is to get an accurate number, when, anyone who disputes the CCP is imprisoned.

      • Buysome says:

        Yep, a recession is when you shrink from producing wants back to producing needs. We’ll do fine if all the folks in the government soup line eat off of Fiestaware and consume the surplus harvest this winter. Might not have spoons though, unless you’re good at whittling all that excess wood that may pile up. In a trade war, China would rather starve their population than ever let us get the upper hand again. Useless ships? Like those navy ones we had sitting for decades? Or the brand new airplanes in graveyards waiting to melt down during the ’50’s. Scrap metal then, scrap metal now.

  12. Bruce Turton says:

    Not really too concerned about the ‘multiversities’ coming away with less. After all, most of the students come away from them with little useful skill sets. If there truly were ‘universities’, we might have educated people as generalists first; people with broad-based learning that reaches across many disciplines so that knowing can be relational among many more persons with alphabet salads behind their signatures. These same people might also learn more immediately useful skills like horticulture, carpentry, energy savings, reading, and a bunch of others.

    • MonkeyBusiness says:

      Isn’t that what a liberal arts education supposed to be?

      But nowadays, universities really don’t prepare you for ANYTHING. They are expensive, and their only real purpose is to separate the elites from the chaffs i.e. those going to the best schools are predestined to join their predecessors at Goldman, McKinsey, Google, etc.

      • Kansas Sunflower says:

        You forgot paying for the expensive tenured staff on the campus. I had a professor who called most of the university staff “missiles”. They were expensive and couldn’t be fired.

        • Mike G says:

          My university announced to cost of living raises for staff this year due to the financial damage from coronavirus. Meanwhile faculty will get their guaranteed 5-10% right on schedule.
          In this very expensive housing market they have hundreds of below-market units for faculty, jack squat for staff.

      • MARK J. says:

        Those Elites also serve as apperchatiks in key Federal Government Institutions, from Congress to the Supreme Court, and every bureaucracy in between, from the Federal Reserve to the so-called Justice Department. And after serving a few years, sign on with major lobbying firms. Higher Education indeed.

  13. Paulo says:

    I wonder what the face of education will look like when students twig that going to uni is a pretty expensive way to ‘find yourself’? Maybe there will be other opportunities, perhaps a few years in a Job Corps or labouring to sharpen up the list before deciding upon a career choice.

    I know every ‘senior’ generation says this, but the fresh faced 18 year olds heading to uni seem pretty young and immature to someone who left home right after high school and worked construction with an older crew. My Dad was on the Normandy beaches when he was that age, and it lasted for another 18 months for him. The modern university experience has been just another tool for society to protect the ruling class and control opportunity. As its scope increased it was simply rolled into another money making scheme. I’m sure the connected investors bailed out long before the losses set in.

    Hate to sound so cynical, but…… It was a nice run while it lasted. Education won’t be the same when this Covid is over, but the housing might be welcomed and utilised.

    • Kurtismayfield says:

      I have been counseling any Senior who is graduating to defer their enrollment to their expensive University and take Community college courses for next year.. especially if their University has already announced online classes only. They shouldn’t be paying out of their nose for the online experiences only. Just make sure their school takes the transfer credits.

    • Dave Kunkel says:

      Three of my grandchildren each worked for about 4 years after graduating from high school. When they went to college after that they were all very focused on their studies and did well.

    • lenert says:

      Ah – Construction – that bastion of enlightenment. Summers doing that were plenty enough motivation to get back to skyool in the fall.

      The teenage LFPR has been in decline since its peak of 58% in 1978 to 35% now.

  14. fred flintstone says:

    The nitwits have created quite the economy…….what is next…….our military being lent out to India in their next war with China? Wonder what the rent on a used aircraft carrier will be. Of course the Ford will need to be discounted since in 2024 it still will be in trials to fix equipment that does not work. Only 22 years after it was ordered. Reminds me of those artillery pieces in the 50’s designed to fire nuclear shells about 20 miles. Of course the shells had a destructive perimeter of 25.
    How much longer can this distorted government mess we call an economy continue before it all collapses.
    Happy Memorial Day!

    • Joe says:

      The M109 A3 was my puppy back in the early 1980s.
      It was a new thing of laser locking for the hellfire.
      I was told about how we could shoot a nuclear projectile with a rocket booster.
      Never told I would be in the blast area though…
      SNAFU(situation normal all fu*cked up).

    • Greg Hamilton says:

      You should be a script writer. Your story reminds me of the HBO film Pentagon Wars about the Bradley Fighting Vehicle. Sad but true.

    • Dave Kunkel says:

      My first job as a 2nd lieutenant in the Army in 1969 was serving as the S2 for a mechanized artillery battalion. This battalion’s primary mission was to be able to fire tactical nukes from track mounted 155mm Howitzers.

      When I had my first meeting with the Lt. Col commander and he explained all this to me, I asked, “If the effective range of a 155mm Howitzer is about 9 miles, wouldn’t you be committing suicide if you ever actually fired one of those nukes?” He said, “That was something we try not to think about.”

  15. SocalJim says:

    Problem with RETIS is many or even most have too much leverage and it is difficult to figure out which ones can survive. Only an insider can figure survival. Too much of a gamble for an outsider. You can get lucky, or you can get wiped out … I would avoid all REITS.

  16. IanCad says:

    In times of great economic and social change, entrenched interests often resort to insanity to delude themselves that the status quo is forever.
    The providers of student accommodation in Leeds (Pickard Properties) have chosen the wilful blindness route.
    To propose, in the current environment, to demolish a perfectly functional and relatively modern 239 unit student block and replace it with an upscale 604 unit surely has to rank as one of the greatest assaults ever upon common sense.

    • char says:

      Those 239 units would stand empty now. I think it is the right time now. I expect when those units are finished that covid is finished too. And if not than this is small beer

  17. Petunia says:

    I first saw the luxury student housing when my son was attending a south Florida college. The prices were higher than the surrounding off campus luxury housing. The collapse of this bad idea couldn’t come fast enough.

    I live in the southern US and all the universities here are more sports franchises than institutions of higher learning. Football is big business down here. The real estate surrounding these schools and stadiums draw a lot of real estate investors. Most of the students live in rented or owned condos around the schools. Many college sports fans also own second homes around the stadiums to attend the games. Sports seem to be the primary form of entertain here. In the last couple of years AirBnB has also been a big thing around the stadiums.

    All of this is replicated around every university in the south, so you can expect lots of real estate pain when this unfolds here as well.

    • El Katz says:

      The local CBS affiliate was talking about why the University of Arizona has to get their football / basketball sports programs going again. Apparently, they are the cash cows that pay for the lesser sports programs as well as a portion of the university operating costs. From the sounds of it, they’re more than concerned with the empty stands. The surrounding businesses (restaurants and bars) may not survive. Bread and circuses.

      My kids live in TX….. it’s never ceased to amaze me as I drive through the one stoplight towns with high school football stadiums that dwarf the school building itself. It’s madness.

      Being an old geezer, I remember my college dorm from the 70’s. Concrete block walls, furniture bolted to the wall, a pull out bolstered “daybed” to sleep on, vinyl tile floors, a gang shower down the hall and a cafeteria with a meal card. Recently, I was in a “student housing” building in Austin (UTA) to visit a friend’s daughter and was surprised at the luxury digs she was in. Her room consisted of four bedroom suites with their own private bathrooms and a lounge in the center with a TV, couches, refrigerator/kitchenette. There was a spa (as in massages spa), pool, restaurants (including sushi), a fitness center that would rival a Gold’s Gym, steam, sauna… you pretty much could name it. Expectations have changed…..

      • Shiloh1 says:

        Wasn’t the University of Arizona near the the top of the list for the recent college bailout money?

      • Mike G says:

        Small town Texas, where the high school principal makes $50k while the football coach makes $150k. Priorities.

    • VintageVNvet says:

      You are ”generalizing on the basis of insufficient information” Pet.
      If you would look around some of the older areas of the SEC particularly, you will find many residential facilities, SFR, mini-multis, condos, even some larger multis that are owned out right, and many of them owned outright for several generations,,,
      and many of those generations either grads, or drop outs for various reasons, possibly too much ”partying”, ( a well known aspect of some SEC schools,) but also certainly including having learned enough to rush home early and be able to actually help out their surviving parent…
      Never worked much ”up north” in the immediate areas around old schools, but suspect similar… and it is logical that the schools of FL would be continuing to be subject to flipper/speculator activity since the rest of our state is and pretty much always has been for many decades, eh

      • Petunia says:

        I don’t pretend to know anything about football or sports in general, but we do get invited to activities, which we never attend. What I related is based on my observations.

        Football is big business in the south and the universities make a lot of money off of it. The coaches and their salaries are often front page news. The sports also feed the real estate demand, most of which is private activity. Since almost everything is now on hold, school, sports, and employment. My opinion, that real estate around these schools is going to suffer more than ever, still stands.

        BTW, nobody considers south Florida the real south. It’s more NY with palm trees. Maybe the panhandle is considered part of the real south, but I could dispute that too.

        • VintageVNvet says:

          We older native sons and daughters used to joke that Florida as known in the hype started at the line between Tampa and Daytona Beach; everything below that was ”Florida”,,, everything above that was known to us as ”LA” as in lower Alabama,,,
          Fact was that many of the older of the European wasp types north of that line were off spring of folks who had walked down there from GA or AL before the civil war, rather than participate on either side of that debacle.
          Still kinda/sorta that way for some in those parts from what I have read.

      • Denise says:

        Just about all of the premier universities in the South are land grant universities and by definition the are in the middle of no where. Florida’s top tier universities are located in Gainesville and Tallahassee. Then you have UCF and University of South Florida which really isn’t in South Florida but the I4 corridor.

        Universities in the South have not built housing for 30 or 40 years. Making them ripe for highly profitable apartment REITS. Football is everything with universities building stadiums that seat 80000 – 100000. Football is the draw. These university towns are dependent on Students and football. Hotels and Restaurants are dependent on continues sporting events, academic conferences, sorority and fraternity parent weekends etcetera. Without any students these towns are looking at a whole lot of economic hurt.

  18. Seneca's cliff says:

    I expect that the virus has pricked the higher education bubble of which student housing is one of the latest rackets. I expect when this bubble is done deflating we will be left with about 20 World Class private universities ( the Ivies plus MIT etc.) and one flagship Public university in each state ( maybe 3 in California). Plus there may be one expensive private college in each state for the children of the rich who can’t get in to the World Class places. I think everything else will be toast. I think those campuses, and all the surrounding housing we become the new ,”projects”.

    • VintageVNvet says:

      hey SC,
      USA does not have 20 world class private OR public universities today, or a couple months ago, or whatever time you want to say after approx 1970 when the good schools of many countries finally were recovering from the very bad effects of WW2.
      IF and only IF you include MIT, CalTech, and Stanford the USA might today get up to 10, but even that is suspect. And keep in mind that MIT and CalTech and similar are not really ”universities” in the sense that are Stanford, CAL, UCLA, University of Michigan, etc…
      A long time friend, grad of MIT, called it, “The ‘Trade School’ down the river from the country club.” And would be happy to elucidate on that theme for hours for the price of a beer or six.
      With UCLA recently taking 1st ”public” in USA away from CAL, I am just hoping UCLA will be in top 5 public world wide, as CAL was for many decades, but am not particularly convinced of that happening, mostly due to the extent of the current rages of what is usually referred to as PC culture taking over both of those formerly really great schools.
      The others left after those two might hope to attain top 20 public in world, but they too are or appear to be too much subject to cultural challenges to their academic reputations to maintain or attain world status.

      • Seneca's cliff says:

        No argument that PC culture has taken on toll on formerly great U.S. universities. But if you just go by one of the standard annual rankings.

        ” Times Higher Education World University Rankings data”

        Then the U.S has 21 in the top 30. Not really the point though. Just that those 21 may be the only ones beyond a flagship public in each state and a few rich kid schools to survive, weather they are the best in the world or not.

      • lenert says:

        Forgot MIT was a land-grant school.

  19. Realist says:

    I wonder about the number of EU nationals studying at British universities. How many of them will go home/ are forced to go home ? How many EU nationals will be applying ( and admitted ) for 2020-2021 to British universities ?

    • char says:

      Erasmus students or full course students? It is not normal for the elite in European countries to send their kids to British universities and universities on the mainlaind are cheaper and have better connections. A trimester Erasmus is more done in the sunnier or more developed parts of Europe. Or the real exotic parts

    • Prof. Emeritus says:

      Imho British universities were already unappealing for Europeans due to Brexit uncertainty, it’s really the few elite campuses (Oxford, Cambridge) that can still draw attention, but English language ed. is no longer GB-exclusive, there are plenty of globally leading degrees available taught in English in Dutch, Swiss, Italian or German universities. Not to mention the huge amount of scam-tuition that some British institution offers – but yeah, the numbers staying away will still be high, but it’s only the finale of a process that started long before the COVID-19.

      • Sammy Iyer says:

        You are right. UK universities are expensive (US universities for foriegn students are prohibitively expensive)& English medium taught courses are now offered in most european universities (germany in partcular) My daughter is studying Masters in Physics in University of Paderborn (NRW govt funded) & course taught in English. Tution Fees is only 315 euro per semester (including free travel pass with in the state). University provided hostel fees/govt student medical insurance+living cost is around Euro 600/month.

  20. Michael Engel says:

    1) Suppose college tuition cost $20K/Y and rent is extra.
    2) April rent was paid.
    3) May on delay, because the student is back home.
    4) The landlord have a signed lease. He charged rent without any penalties. The rental office hope that the student will come back.
    5) If school open in mid July, the student will be back in June.
    6) May & June will be paid. Since the student studied online for x4 months he is almost good to go.
    7) Schools will condense, lighten up tests and kick out grad with min delays.
    8) Student loans will cover it all. Rent is not the biggest headache.
    9) If jobs offering and internship are canceled. If businesses and colleges are in disconnect, student loans payments will be delayed.
    10) Landlord vacancies will be overextended in a bad job market, for years.

    • sunny129 says:

      Expensive ‘ 4 wall’ education (Ivory type) models have to differentiate from so many ONLINE education campuses out there.

      Skills will/should become more important than mere credentials from so called upper tier universities. This already happened in Tech industry over a decade ago.

  21. sunny129 says:

    Like Medicine, the Education industry became first as a business with bottom line priority besides any thing else. Like corporate practice of Medicine, Education followed that model.

    I feel sorry for the students but no no body else. They all deserve what’s coming! Debt slaves and the Rentiers’ economy won’t support these neo-feudal-lords!

    • Duke DeGuise says:

      Ah, the United States, where Everything Is a Racket, and the Overclass cannibalizes the patrimony of the Republic.

      Who’s the S×#*hole Country now?

  22. Stevie says:

    Here in the US even some college professors are suggesting students take a gap year until the Covid thing shakes out. Wish I had done that myself, feeling burned out with a bad case of senioritis.

    • Anthony A. says:

      Does that mean the teachers will be off for a year with no pay?

      • Stevie says:

        I got the sense professors will use the downtime for more professional research. You know: publish or perish. For those not laid off anyway.

  23. Xabier says:

    Cambridge University is also constructing ‘Eddington’, a hideous development on once good agricultural land on the fringe of the city, largely to house university workers, and of course Chinese students.

    Some 3,000 apartments planned and quite a bit already built including the charmless and commercially pointless ‘market square’ with retail units impossible to let .

    And the summer conference trade, which is big business for the Colleges, will be dead as a dodo, too.

    Many locals will be not all that displeased to see this behemoth of greed and speculation, which used to be a University, stumble, if not actually fall.

    • MC01 says:

      I had a look on the Internet and intriguingly enough the vast bulk of the pictures for this Eddington development appear to be staged. Way too many good looking children: where are the ugly ones? In an ominous moment were they prohibited to play outside the day those pictures were taken?
      That thing looks like a more modern and lower version of the horrifying towers I lodged in when taking courses at Swansea University: they were so ugly theyare the only student lodging I remember, and all for the wrong reasons.

  24. BuySome says:

    There were always Profs. who wrote papers and held courses on the realities of making a working economy. But the schools got caught up in the hype of the oh so perfect hot air method and dropped much of that gut stuff. “Why all we need to know is how to invest in electrons!” Looks like they also make the buzzer ring…school’s out. Maybe there’s a P/T job at the mall.

  25. Demand for Physical campuses may diminish but
    housing for youngsters/loners is growing.

    The transition is -painful-, but necessary.

    As you enter BYU, Provo Utah, you’re greeted with:
    > The world is our campus.

    Young YouTube gamers can become more rich+famous
    than football players — it’s the new frontier.

  26. Another Scott says:

    In the U.S., there is one publicly traded student housing REIT, American Campus Communities. It’s stock has lost about a third of it’s value since the crisis began, and that’s after a bounce back. I don’t know enough about real estate metrics to provide an analysis of the financial statements, but the company did say that pre-leasing was down due to the shutdown

    Over the past five years, the other two REITs, Education Realty Trust and Crest Campus Communities have been acquired by Greystar and Harrison Street, respectively. They would have provided additional insight into the situation in this country.

    • lenert says:

      Neato. Their website says they “own” 26 on-campus halls in the US.

      And on the financing for universities page: “Potential for off-balance sheet treatment.”

  27. Rosebud says:

    Students, today’s lesson is on Accuracy first, (March 11, 2020), followed by Precision, (5:16pm Geneva time).

  28. Portia says:

    I bought a 12-pack today, and I am already halfway through it. Yes, sweet Portia loves her Vt brews. [Wolf, I have every intention of purchasing one of your excellent mugs in June! As an Aspie, I can say there is a remote chance of that being a lie] I have already read how one Ohio whatever is “6’4″ 290lbs has a pair and won’t be pushed around”.
    I hereby vote for no balls in decision-making, on the grounds that I am 65 and have seen no good come from testosterone.

  29. Malcom says:

    Student accommodation is a rip off, here is hoping these funds go under.

  30. Michael Engel says:

    1) Academia will have a change of character.
    2) Shakespeare will be online. Young athletes will become community organizers and the Roman amphitheatres will stay empty.
    3) Cyber, computer engineering, electronics.. will expand.
    4) The whole world is united, – under Trump, – to reverse the course of the past 30 years, that led to the rise of China as a dominant power.
    5) Where are the new orders : they sank off the Pearl River
    and the Yangtze Delta. There will be orders water dripping.
    6) China became the global mfg hub after Nixon opened China in the 70’s.
    7) American jobs were moving to communist Maoist China as a vaccine against the misbehavior of the militant unions.
    8) China used plenty US dollar banks wholesale credit, from the global pipelines, to build and expand.
    9) But in 2020 Locus China is eating their best customers alive, laughing at us.
    10) Chinese students, transferring knowledge, will not be back.
    11) NYSE co-op board will ask to evict Baba.

  31. BuySome says:

    Let’s put the blame for all this parade wrecking on the Delta house….faithfully submitted, Douglas C. Niedermeyer.

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