Wunderlich has a mostly bullish take on the beaten-up sector, starting most of its selections at Buy.
Initiated at Buy are Armada Hoffler Propreties (AHH), Campus Crest Communities (CCG), Cedar Realty Trust (CDR), Education Realty Trust (EDR), Healthcare Trust of America (HTA), and Investors Real Estate Trust (IRET).
Started at Hold are Ramco-Gershenson Properties Trust (RPT), and Urstadt Biddle Properties (UBA).
Wall Street's souring on the student-housing sector comes with good reason as back-to-college season sees more cutting of rents thanks to oversupply. A record 51K off-campus beds are to be delivered this year, according to Axiometrics, with the numbers in many college towns far outpacing new enrollment.
Freddie Mac - a big guarantor of loans made to student-housing developers - is noticing, and has begun upping required equity contributions by 5-10%. "We are concerned about the amount of new construction activity in some markets," says Freddie's VP of multifamily production.
Some developers are faring far better, with privately-owned Landmark beating renters away with a stick for new projects in Tuscon, State College, PA, and Oxford, MS.
Others in the industry include Campus Crest (CCG +0.4%), and Education Realty Trust (EDR -0.3%). Campus Crest recently drew the bullish eye of SA Pro's Dane Bowler who likes the stock's deep discount to its peers.