The market for student housing is expected to blow up sooner than later
Blackstone Inc. has struck a $12.8 billion transaction with American Campus Communities Inc. (ACC) to bet on increased rents as more university students return to campus.
More than half of Blackstone Real Estate Income Trust’s (BREIT) assets are in residential property, with almost 20% of its real estate in Las Vegas and Atlanta. Now, it is heading toward a more varied expansion into the US market through student housing.
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According to the National Multifamily Housing Council, the market for student housing will expand from 8.5 million beds in 2020 to 9.2 million in 2031 – and Blackstone is acting fast. In 2021, BREIT formed a $784 million joint venture with student housing developer Landmark Properties.
Blackstone said it is prepared to pay ACC $65.47 a share – about a 14% premium to Monday’s closing price. Once finalized, this will mark BREIT’s largest student housing deal.
ACC is the nation’s largest owner, manager and developer of student housing communities. As of December 31, 2021, ACC had over 166 student housing properties with 111,900 beds on campuses like Arizona State University, Florida State University and the University of California in Berkeley.
“American Campus Communities has a best-in-class portfolio and platform, built on longstanding relationships with some of the most distinguished and fastest growing universities in the country,” Jacob Werner, co-head of acquisitions at Blackstone, said in a statement.
Read more: College-area rents on a downturn as students move back home
Since its launch in 2017, BREIT has been on an acquisition spree, having recently bought Preferred Apartment Communities in a $5.8 billion transaction and Home Partners of America in a $6 billion transaction. BREIT continues to take advantage of pandemic-related disruptions to make large-scale investments in the US, according to a Bloomberg report.
The transaction has been unanimously approved by ACC’s board of directors and is expected to close in Q3 2022, subject to approval by ACC’s shareholders and other customary closing conditions.
