Global investment firm KKR announced it is acquiring a portfolio of 19 purpose-built student housing properties from Blackstone Real Estate Income Trust (BREIT) for approximately $1.64 billion.
The over 10,000-bed portfolio, which is anchored to 14 leading universities in 10 states, was acquired by BREIT in a joint venture with Greystar Real Estate Partners in 2018.
Upon the transaction’s closing, the portfolio will be managed by University Partners, which KKR launched in 2016 with a team of industry veterans. In the past decade, KKR has acquired institutional-quality properties in top college markets and expanded University Partners to include third-party property management. Inclusive of the pending BREIT acquisition, University Partners will own and manage over 25,000 beds.
“Student housing is a sector that we have long-term conviction in. We are pleased to be working with Blackstone to complete this transaction, which will add a diverse mix of high-quality properties to our portfolio,” said Justin Pattner, partner at KKR and head of real estate equity in the Americas. “The operating capabilities we have built with University Partners over the past decade, and our ability to transact at scale, position us to create value for our investors and to continue investing in great living experiences across these communities. We are deploying into what we view as a compelling market environment to purchase quality real estate.”
Blackstone also remains invested in the student housing sector. Predominantly through its acquisition of American Campus Communities (ACC) in 2012, Blackstone ranks as the nation’s largest owner of student housing with over 190 properties and approximately 140,000 beds. Since the acquisition, it has enabled ACC to build additional student housing, breaking ground on four new communities since fall 2023. Six new communities are expected to come online this year.
“This transaction is an excellent outcome for BREIT’s investors and demonstrates the strong demand for high-quality assets in attractive markets that BREIT owns,” said Jacob Werner, co-head of Americas acquisitions for Blackstone Real Estate. “We continue to have a long-term conviction in student housing and are actively growing through BREIT’s student housing platform, ACC.”
The transaction is expected to close by the third quarter, with KKR making its investment in the portfolio primarily from its KKR Real Estate Partners Americas III fund.
Gibson, Dunn & Crutcher acted as legal adviser to KKR. For BREIT, TSB Capital Advisors and J.P. Morgan Securities served as financial advisers and Simpson Thacher & Bartlett as legal adviser.
Earlier in April, Blackstone announced its plan to acquire AIR Communities and take the multifamily firm private in a $10 billion deal. Ranked No. 46 on the National Multifamily Housing Council’s 2024 top apartment owners list, AIR Communities’ portfolio comprises 76 multifamily communities with over 27,000 units in 10 states. In January, Blackstone Real Estate announced that it would acquire Tricon Residential, also taking the Toronto-based company private.
