Betting against the trend away from bricks and mortar higher education, Blackstone is making a major acquisition of student housing at college campuses around the country at Covid depressed prices.
Blackstone has struck a $13bn deal to acquire one of the biggest portfolios of student housing in the US, extending a streak of real estate transactions that has already made the private equity company one of the biggest owners of inner-city apartment blocks and suburban homes. The purchase of American Campus Communities will give Blackstone a presence near the campuses of Princeton University, University of California, Berkeley and other institutions where the company owns more than 100 halls of residence and housing units.* Blackstone executive Jacob Werner said the transaction also presented an opportunity to use capital from the Wall Street group’s $279bn real estate unit to build new university facilities in areas that were not adequately served.
For Blackstone, the new push into university housing represents a bet that students will keep showing up for in-person learning at leading US universities despite high tuition costs, the rise of distance learning during the pandemic and a long-term decline in enrolment. About 2.1mn students embarked on a US university education last autumn, according to data from the National Student Clearinghouse Research Center. This represents only a slight rebound from pandemic-hit 2020 and a decline of 22 per cent since 2015. But the most prestigious universities have fared far better and nearby landlords have benefited. Students were paying rent of $791 a bedroom last December at 200 sought-after institutions tracked by Yardi Matrix, a real estate research company. Rents at UC Riverside rose 15 per cent to $1,004, the company said. I don’t know if there were any properties in State College included in the sale.
Blackstone has struck a $13bn deal to acquire one of the biggest portfolios of student housing in the US, extending a streak of real estate transactions that has already made the private equity company one of the biggest owners of inner-city apartment blocks and suburban homes. The purchase of American Campus Communities will give Blackstone a presence near the campuses of Princeton University, University of California, Berkeley and other institutions where the company owns more than 100 halls of residence and housing units.* Blackstone executive Jacob Werner said the transaction also presented an opportunity to use capital from the Wall Street group’s $279bn real estate unit to build new university facilities in areas that were not adequately served.
For Blackstone, the new push into university housing represents a bet that students will keep showing up for in-person learning at leading US universities despite high tuition costs, the rise of distance learning during the pandemic and a long-term decline in enrolment. About 2.1mn students embarked on a US university education last autumn, according to data from the National Student Clearinghouse Research Center. This represents only a slight rebound from pandemic-hit 2020 and a decline of 22 per cent since 2015. But the most prestigious universities have fared far better and nearby landlords have benefited. Students were paying rent of $791 a bedroom last December at 200 sought-after institutions tracked by Yardi Matrix, a real estate research company. Rents at UC Riverside rose 15 per cent to $1,004, the company said. I don’t know if there were any properties in State College included in the sale.
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