Dive Brief:

• Two weeks after a Blackstone entity announced a massive acquisition, another part of the New York City-based private equity giant is selling a large portfolio.
• Last week, KKR and Blackstone Real Estate Income Trust announced that funds managed by KKR will acquire a portfolio of 19 purpose-built student housing properties from BREIT for approximately $1.64 billion. The transaction is expected to close by the third quarter of 2024, according to a press release. 
• BREIT initially acquired the over-10,000-bed portfolio in 2018 in a joint venture with Charleston, South Carolina-based Greystar Real Estate Partners. The portfolio sits near 14 four-year public universities across 10 states, with a majority of the assets located within easy pedestrian access to campus. 

Dive Insight:

Boosted by its purchase of American Campus Communities in April 2022, Blackstone is the largest owner of student housing in the U.S., with more than 190 properties representing approximately 140,000 beds. 

The Austin, Texas-based REIT has broken ground on four new student housing communities since fall 2023 and plans to open six additional new ACC communities across the country this year.

Though Blackstone didn't list a reason for the sale, Jacob Werner, co-head of Americas Acquisitions for Blackstone Real Estate, said in a news release that the transaction is an excellent outcome for BREIT’s investors.

“We continue to have long-term conviction in student housing and are actively growing through BREIT’s student housing platform, American Campus Communities, which is the largest owner of student housing in the U.S.,” he said.

Scaling up

KKR Real Estate Partners Americas III fund is the primary vehicle that KKR is using to make the acquisition. 

“Student housing is a sector that we have long-term conviction in,” Justin Pattner, partner at KKR and head of real estate equity in the Americas, said in the news release.

Once the transaction closes, KKR-owned University Partners will manage the assets. The Dallas-based student owner and operator will own and manage over 25,000 beds, representing nearly $4 billion of property value owned by KKR and other investors.

“Approximately half of the portfolio is in markets where we have existing operating experience, and this transaction will enable us to expand our presence into a number of attractive new markets,” said Travis Roberts, CEO of University Partners, in a statement.

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