New York City — Funds managed by KKR have agreed to acquire a 10,000-bed student housing portfolio from Blackstone Real Estate Income Trust Inc. (BREIT) for $1.6 billion.
The portfolio consists of 19 properties located across 10 states in markets including Auburn, Alabama; Tempe, Arizona; Boulder, Colorado; State College, Pennsylvania; and Charlottesville and Petersburg, Virginia. Further details on the properties were not disclosed.
The communities were acquired by BREIT through a joint venture with Greystar Real Estate Partners in 2018. The acquisition was announced in conjunction with Greystar’s larger $4.6 billion acquisition of Education Realty Trust (EdR).
Upon closing, the portfolio will be managed by University Partners. The transaction is expected to close by the third quarter of this year. Gibson, Dunn & Crutcher LLP served as legal advisor to KKR in the transaction. TSB Capital Advisors and J.P. Morgan Securities LLC served as BREIT’s financial advisors. Simpson Thacher & Bartlett LLP served as BREIT’s legal advisor.
Blackstone is one of the largest owners of student housing in the U.S. with more than 190 properties totaling 140,000 beds. Since acquiring American Campus Communities for $12.8 billion in 2022, the firm has broken ground on four new developments with plans to begin an additional six in 2024.
“Student housing is a sector that we have long-term conviction in,” says Justin Pattner, partner and head of real estate equity in the Americas for New York City-based KKR, “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.”