When student-housing preleasing outruns executed rent

The initial case reads all 1,181 reported beds as contracted and carries the scheduled lease installments by floor plan. That produces 95.2% occupancy, $12.400 million of scheduled annual bed rent and $120,000 of concessions.

The move-in case replaces the single count with the status of each bed at the cutoff and the activity that follows it. It removes incomplete lease packages from contracted rent, adds the late leases that actually complete, removes first-installment defaults and applies the concession attached to each surviving lease.

The result is not merely 45 fewer beds. Scheduled bed rent falls by $470,000 and concessions increase by $190,000 because late-cycle leases are more heavily promoted. Effective bed rent is $660,000 below the preleasing case.

The June report is reconciled to resident signatures, guaranties, deposit alternatives and bed assignments. The 1,126 completed packages enter contracted rent. The 55 incomplete records remain in the leaseup schedule with their current status; they do not receive the economics of an executed lease merely because they appear in the headline.

The reconciliation continues after the cutoff. Eighteen completed leases fail to make the first installment and are cancelled under the property process. Twelve of the resident-signed files, six approved applications and ten new prospects complete before move-in. That produces 1,136 move-in beds.

A later leasing report can still show velocity without rewriting the June underwriting record. Each added bed carries its actual execution date, floor plan, installment amount and promotion. Each lost bed carries the cancellation date and the rent removed from the academic-year case.

The 1,136 beds are then grouped by assigned floor plan without replacing lease-level economics with an average asking rate. Studio and one-bedroom leases contribute $1.670 million of scheduled rent; two-bedroom leases contribute $3.440 million; four-bedroom leases contribute $6.820 million.

Concessions are read from the lease and addendum. A free installment reduces the annual contract value by that installment even though the resident occupies the bed for the full term. A recurring monthly discount remains in every applicable installment. The revised case contains $310,000 of concessions rather than the $120,000 carried in the June case.

The floor-plan view matters because the remaining vacancy is not evenly distributed. A leaseup assumption for a four-bedroom bed uses the available four-bedroom inventory, its current rate and its current promotion. It does not use the average achieved rent on the studio inventory that filled earlier in the cycle.

The twelve installments are placed in the months required by each lease rather than converted to a daily rent across the physical occupancy period. The August turn remains outside resident occupancy even though annual rent is paid in equal installments. Late leases begin on their actual contract date and do not receive revenue for a prior vacant installment.

Effective bed rent falls from $12.280 million to $11.620 million. Parking, utility reimbursements and other resident revenue falls by another $50,000 because the charges are attached to occupied beds and selected lease packages rather than applied at a fixed percentage of rent.

Total operating expense remains $5.000 million. Lower occupied-bed utilities and payment costs offset higher late-cycle marketing and turn labor in this case; property taxes, payroll, security, internet and most contract services do not move with 45 beds. Year 1 NOI falls from $7.830 million to $7.120 million.

At the $100 million purchase price, the preleasing NOI produces a 7.83% going-in yield. The $60 million loan is constrained by 60% LTV and opens at a 13.05% debt yield, just above the 13.0% minimum.

The move-in NOI produces a 7.12% yield. At 60% LTV, debt yield falls to 11.87%. The debt-yield constraint sizes proceeds at $54.769 million, $5.231 million below the preleasing case. Required purchase-price equity increases from $40.000 million to $45.231 million.

The remaining beds can still be leased before or after move-in, but the treatment must specify the floor plan, start installment and concession required. Filling 24 beds with one installment free does not produce the same annual rent as the 24 beds in the original June count. Reaching 1,181 beds with deeper late-cycle concessions recovers occupancy without recovering the original effective rent.

Cap Orbit can work across the dated preleasing reports, leasing definitions, resident leases, guaranties, deposit records, bed assignments, floor-plan inventory, concession addenda, first-installment file, cancellations, move-in report, debt quote and existing acquisition workbook in the same deal. Every reported bed can be resolved to its current lease status and assigned economics.

From there, you can have Cap Orbit rebuild the move-in case by bed, apply the correct installment schedule and concession, map occupied beds to parking and utility charges and update the existing model through revenue, turn, NOI, debt yield, proceeds and equity. The June report remains the June report; the underwriting changes when the underlying bed changes status.

The same deal record supports the late-cycle cases that matter here: fill selected floor plans with one installment free, deepen concessions to reach the reported bed count, carry a delayed start date or hold remaining beds vacant. Each case returns the same connected outputs—executed beds, move-in occupancy, scheduled rent, concessions, effective rent, NOI, debt and equity.

The standard for AI on this asset class is an acquisition case in which every reported bed resolves to an executable lease, a floor plan, an installment schedule, a concession and the capital supported by the resulting rent.