Same student housing product, 5.1 percent cap in a big college town, 6.8 percent in a small one

Two offerings arriving in the same week can look close to identical on paper and still price very differently. Both are 1990s vintage, both leased by the bed, both roughly 100 beds, both about half a mile from campus. The first sits at a flagship with about 45,000 students and enrollment up every year for a decade. Asking price puts it at a 5.1% going-in cap. Rent per bed is high, occupancy has been 97 or better, and there are three new buildings under construction within a mile. The second sits at a small private college of about 3,800 students in a town where the college is the largest employer. Going-in is 6.8%. Occupancy has been 94, rent per bed is a third lower, and there is no new supply because nobody would build there. The 170 basis point spread is real money on a 100 bed asset. It is also close to what the market would be expected to charge for the difference between a school likely still growing in 2035 and one that might not exist in its current form. Whether 170 basis points is enough compensation for single-institution risk depends on how a buyer weighs enrollment durability against income today. A defensible way to test it is to model the small school at a stressed occupancy and rent scenario and see whether the wider cap still clears an acceptable return; if it does not, the spread is too thin for the risk being taken.