The deal that could change student housing is now official. On Tuesday, the University of Kentucky Board of Trustees unanimously approved a 50-year ground lease with Memphis, Tenn.–based Education Realty Trust (EDR). The approval allows the student housing REIT to begin the first phase of the university’s on-campus housing revitalization.

The deal, which was first reported in December 2011, allows EDR to redevelop housing at UK in two phases and hold the properties under a 50-year ground lease. In Phase I, EDR will develop, construct, and eventually own a 601-bed, $25.8 million freshman honors housing community. It will include classroom and meeting space and will be available for occupancy by fall 2013. The school and student housing leaders are talking about a Phase II, which is anticipated to include an expansion to 9,000 residence-hall beds and EDR’s management of UK’s entire housing portfolio of 6,000 beds in the fall of 2013.

In the second phase, EDR will demolish most of the current on-campus dormitories, replacing them with modern and attractive living communities that will provide comfortable accommodations for UK students and programs along with up-to-date services and technology, according to a company press release.

As Multifamily Executive reported in December, the industry rumor mill says that schools like Ohio State, West Virginia University, Texas A&M, and others are exploring the possibility of privatizing housing. EDR CEO Randy Churchey thinks that if EDR does well, there will be more opportunities for student housing companies to take over on-campus housing.

“More universities [having] a favorable outcome should make it easier for other companies to explore the concept,” Churchey told MFE last year. “Kentucky kind of burst open the door. I expect that we'll have other universities that are interested. Most of them are facing the same issues—lower endowments, budget cuts from the state, and infrastructure that is somewhat old.”