Global Education Communities Corp.
GEC’s Pure-Play Pivot: Exits Education, Doubles Down on Student Housing
Published: Aug 18, 2025
Author: FRC Analysts
*Global Education Communities Corp. has paid FRC a fee for research coverage and distribution of reports. See last page for other important disclosures, rating, and risk definitions.
Sector: N/A | Industry: Student Housing
Ticker Symbols: GEC.TO – TSX
Report Highlights
- We are resuming coverage on GEC following a two-year pause. Earlier this month, GEC divested its Sprott Shaw College (SSC) subsidiary for $35M, or $0.52/share. The deal reflects a 517% ROI since acquisition, and a revenue multiple of 0.85x, in line with industry peers.
- GEC is transitioning into a pure-play student housing company, building on over a decade of housing experience, and 30+ years in education. Following the SSC sale, GEC’s new annualized revenue run rate is expected to be $30M+ (previously $70M), with employee headcount reduced from 650 to 170.
- Compared to multi-family, student housing is a specialized asset class with generally higher rent per square foot, and higher yields for investors.
- Management is focused on building a stable, high-quality rental portfolio aimed at an eventual sale to a large institutional buyer. Rental assets offer inflation-protected income, strong demographic support, and low volatility—making them attractive to pension funds and institutions.
- GEC’s current portfolio includes 14 student housing buildings in Greater Vancouver — eight operational and six in the pipeline — totaling over 4,200 beds and an estimated build-out value of $1.4B.
- The operating projects have potential to generate ~$20M in revenue, and ~$14M in NOI, or ~$12K in NOI per bed annually. As of 2024, they were appraised at $244M. These properties serve students from over 95 institutions, and 70+ countries, with Canadian students making up more than 40% of residents.
- The development portfolio includes six buildings across four projects, totaling 2,988 beds, projected to generate $48M in annual NOI. Based on a 4% cap rate, we value these assets at $1.2B upon completion.
- While reduced immigration targets and cuts to international student permits pose challenges for education providers, GEC is buffered by a strong base of Canadian students. Vacancies for affordable units below $1,750/month, GEC’s target market, remain critically low at under 1%. With rental supply projected to lag long-term demand, and Vancouver remaining a top destination for both domestic and international students, we maintain a positive outlook on the city’s student housing market. To our knowledge, GEC has no direct competitors in Western Canada.
- Relative to REITs, GEC is trading at 6x forward revenue and 8x forward EBITDA vs sector averages of 12x and 20x, respectively, a 56% discount.
Divestment of Sprott Shaw College
Fundamental Research Corp. Equity Rating Scale:
Fundamental Research Corp. Equity Rating Scale (ratings are not a recommendation to acquire, dispose of, or take no action regarding a security; the definition of our ratings are explained below):
- Buy – Fair value is 12% above the current market price; or risk and reward is favorable
- Hold – Fair value is between 5% to 12% above the current market price
- Sell – Fair value is 5% above, or less, than the current market value; or risk and reward is unfavorable
- Suspended or Rating N/A – Coverage and ratings suspended until more information can be obtained from the company regarding recent events.
Fundamental Research Corp. – Risk Rating Scale:
- (Low Risk) – The company operates in an industry where it has a strong position (for example a monopoly, high market share etc.) or operates in a regulated industry. The future outlook is stable or positive for the industry. The company generates positive free cash flow and has a history of profitability. The capital structure is conservative with little or no debt.
- (Below Average Risk) – The company operates in an industry where the fundamentals and outlook are positive. The industry and company are relatively less sensitive to systematic risk than companies with a Risk Rating of 3. The company has a history of profitability and has demonstrated its ability to generate positive free cash flows (though current free cash flow may be negative due to capital investment). The company’s capital structure is conservative with little to modest use of debt.
- (Average Risk) – The company operates in an industry that has average sensitivity to systematic risk. The industry may be cyclical. Profits and cash flow are sensitive to economic factors although the company has demonstrated its ability to generate positive earnings and cash flow. Debt use is in line with industry averages, and coverage ratios are sufficient.
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Definition of FRC’s Fair Value Estimate – Our fair value estimate is the theoretical value of the company’s equity using widely accepted methods of valuation such as discount cash flow or comparables. IT IS NOT A TARGET PRICE or PREDICTION OF THE FUTURE STOCK PRICE.
Disclaimers and Disclosure
Analyst Certification: The views expressed in this report accurately reflect the personal views of the analyst, and no part of their compensation was, is, or will be directly or indirectly related to the specific recommendation or views expressed.
Any “forward looking statements” are our best estimates and opinions based upon information that is publicly available and that we believe to be correct, but we have not independently verified with respect to truth or correctness. There is no guarantee that our forecasts will materialize. Actual results will likely vary. The analyst and Fundamental Research Corp.
Fundamental Research Corp. “FRC” owns shares of the subject company: No. The analyst owns shares of the subject company: No , does not make a market or offer shares for sale of the subject company, and does not have any investment banking business with the subject company.
Annual fees ranging from $15,000 to $30,000 have been paid to FRC by Global Education Communities Corp. to commission this report and research coverage including update reports. This fee creates a potential conflict of interest which readers should consider. FRC takes steps to mitigate conflicts including setting fees in advance and utilizing analysts who must abide by CFA Institute Code of Ethics and Standards of Professional Conduct. Additionally, analysts may not trade in any security under coverage. Our full editorial control of all research, timing of release of the reports, and release of liability for negative reports are protected contractually. The issuer has agreed to a minimum coverage term and coverage cannot be unilaterally terminated. Distribution procedure: our reports are distributed first to our web-based subscribers on the date shown on this report then made available to delayed access users through various other channels for a limited time.
The distribution of FRC’s ratings are as follows: BUY (71%), HOLD (3%), SELL / SUSPEND (26%). Global Education Communities Corp.
This report contains “forward looking” statements. Forward-looking statements regarding the Company and/or stock’s performance inherently involve risks and uncertainties that could cause actual results to differ from such forward-looking statements. Factors that would cause or contribute to such differences include, but are not limited to, continued acceptance of the Company’s products/services in the marketplace; acceptance in the marketplace of the Company’s new product lines/services; competitive factors; new product/service introductions by others; technological changes; dependence on suppliers; systematic market risks and other risks discussed in the Company’s periodic report filings, including interim reports, annual reports, and annual information forms filed with the various securities regulators. By making these forward-looking statements, Fundamental Research Corp. and the analyst/author of this report undertakes no obligation to update these statements for revisions or changes after the date of this report. A report initiating coverage will most often be updated quarterly while a report issuing a rating may have no further or less frequent updates because the subject company is likely to be in earlier stages where nothing material may occur quarter to quarter.
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