Blackstone Bets Nearly $13 Billion on Student Housing
Pandemic-Proof
During the pandemic’s early days, the bulk of college students attended classes online and remained off campus. Despite this, rent collections for student housing held steady throughout the period.
At present there’s a general shortage of housing in the US, which has resulted in increased rent for students living near campus. The growing number of international students is causing further pricing pressure. Low levels of new construction in the student housing space is also a factor. This is a favorable equation for property owners, and that’s gotten the attention of some big investors.
Going in Big
An affiliate of global investing giant Blackstone (BX) put a toe in the market last summer when it invested $784 million in eight student housing properties. Now it has upped the ante with its agreement to acquire American Campus Communities (ACC) for $12.8 billion, its largest ever investment into the sector. ACC owns 166 student-housing buildings near and on US campuses.
Blackstone expects that student’s return to campus will provide a tailwind that lends further support to the already strong rental market.
Campus Experience for a Price
American Campus Communities is a real estate investment trust that Blackstone intends to take private, where the properties can be held long term. Blackstone’s head of US real estate has stated that the sector is attractive because it performs well through a variety of economic cycles. There are also plans to build new properties to meet the increasing demand. ACC’s chief executive has asserted the company will grow under Blackstone’s leadership.
As Blackstone builds out its portfolio of properties, college students may see more options. But some wonder, as everything associated with education gets more expensive — at what price?
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