Private equity firm KKR has agreed to purchase a portfolio of 19 student housing properties from Blackstone Real Estate Income Trust (BREIT) for USD 1.64 billion. The portfolio consists of over 10,000 beds across 19 communities near top universities in 10 states. Upon closing, KKR's student housing platform University Partners will take over management as it expands its owned and managed portfolio to over 25,000 beds worth USD 4 billion. Blackstone, through its company American Campus Communities (ACC), is the largest owner of student housing in the U.S., with more than 190 properties, representing approximately 140,000 beds.
Private equity firm KKR has agreed to buy a portfolio of 19 student housing properties from Blackstone Real Estate Income Trust (BREIT) for about USD 1.64 billion.
The over 10,000-bed portfolio comprises 19 purpose-built, premium student housing assets anchored to 14 leading four-year public universities across 10 states. The communities feature a wide range of best-in-class amenities and the majority are located with easy pedestrian access to campus. BREIT acquired this portfolio in 2018 in a joint venture with Greystar Real Estate Partners.
Upon closing of the transaction, the portfolio will be managed by University Partners, a leading owner and operator of student housing across the U.S. KKR launched University Partners in 2016 with a team of industry veterans as part of its strategy of creating vertically-integrated platforms to build scaled exposures to attractive real estate sectors.
Over the past decade, KKR has acquired institutional-quality properties in top university markets across the country and expanded University Partners' business to include third-party property management. Inclusive of the pending acquisition, University Partners will own and manage over 25,000 beds, representing nearly USD 4 billion of property value owned by KKR and other investors.
Blackstone, predominantly through its wholly owned portfolio company American Campus Communities (ACC), is the largest owner of student housing in the U.S., with more than 190 properties, representing approximately 140,000 beds. Blackstone bought ACC in 2022 in a deal valued at USD 12.8 billion. Since acquiring ACC, Blackstone has enabled ACC to build more student housing, including breaking ground on four new student housing communities in Fall 2023. ACC expects to welcome students to six additional new ACC communities across the country in 2024.
Blackstone Real Estate Income Trust, Inc. (BREIT) is a perpetual-life, institutional quality real estate investment platform that brings private real estate to income focused investors. BREIT invests primarily in stabilized, income-generating U.S. commercial real estate across key property types and to a lesser extent in real estate debt investments.
KKR is a leading global investment firm that offers alternative asset management as well as capital markets and insurance solutions. KKR sponsors investment funds that invest in private equity, credit and real assets and has strategic partners that manage hedge funds.
The transaction is expected to close by the third quarter of 2024, subject to customary closing conditions. KKR is making its investment in this portfolio primarily from its KKR Real Estate Partners Americas III fund.
In conclusion, this transaction furthers KKR's strategy of growing its student housing investments through University Partners. With purpose-built properties in premier university markets, the portfolio enhances KKR's footprint in the sector. The deal also aligns with Blackstone's ongoing expansion of its student housing holdings, primarily through American Campus Communities, as the largest owner student housing in the U.S.
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