Blackstone Selling Student Housing Portfolio to KKR for $1.6B

Properties encompassing 10K beds are anchored to 14 universities across 10 states.

Blackstone Real Estate Income Trust (BREIT) is selling a portfolio of 19 student-housing properties to funds managed by KKR for $1.64B.

The portfolio, which encompasses more than 10,000 beds, includes purpose-built student housing assets anchored to 14 four-year public universities across 10 states, the companies announced on Thursday.

“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.,” Jacob Werner, co-head of Americas Acquisitions for Blackstone Real Estate, said in a statement.

Blackstone acquired American Campus Communities in 2022 for $13B. ACC, which owns more than 190 student housing properties encompassing about 140,000 beds, will be opening six new ACC communities in 2024, Blackstone said in the release.

BREIT bought the portfolio that it’s selling to KKR in 2018 through a joint venture with Greystar Real Estate Partners. The transaction with KKR is expected to close in the third quarter.

KKR said the portfolio will be managed by University Partners, an owner and operator of student housing KKR launched in 2016. Including its third-party management business and the properties it is acquiring from BREIT, University Partners will own and manage more than 25,000 beds.

“This is a high quality, scaled portfolio of purpose-built student housing assets serving the country’s leading four-year public universities,” said Travis Roberts, CEO of University Partners, in a statement.

“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,” Roberts said. “We believe student housing in the top university markets will continue to benefit from strong enrollment growth and structural constraints on new supply.”

The deal with KKR is the second multi-billion-dollar transaction announced by Blackstone in recent weeks.

Earlier this month, Blackstone announced it is taking private Apartment Income REIT, also known as AIR Communities, in a $10B deal. The REIT owns 76 rental housing communities.