KKR and Blackstone Real Estate Income Trust have signed a deal for funds managed by KKR to acquire a portfolio of 19 purpose-built student housing properties from BREIT for $1.6bn (£1.3bn).
The 10,000-bed portfolio is comprised of 19 purpose-built student accommodation assets tied with 14 leading four-year public universities across 10 states.
BREIT acquired the 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 US.
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.
The KKR and BREIT 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.
Justin Pattner, partner at KKR and head of real estate equity in the Americas, said: “Student housing is a sector that we have long-term conviction in. We are pleased to be working with Blackstone to complete this transaction, which will add a diverse mix of high-quality properties to our portfolio.”
“The operating capabilities we have built with University Partners over the past decade and our ability to transact at scale, position us to create value for our investors and to continue investing in great living experiences across these communities. We are deploying into what we view as a compelling market environment to purchase quality real estate.”
Jacob Werner, co-head of Americas acquisitions for Blackstone Real Estate, said: “This transaction is an excellent outcome for BREIT’s investors and demonstrates the strong demand for the high-quality assets in attractive markets that BREIT owns. 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 US”
Travis Roberts, chief executive officer of University Partners, added: “This is a high-quality, scaled portfolio of purpose-built student housing assets serving the country’s leading four-year public universities.
“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. We believe student housing in the top university markets will continue to benefit from strong enrolment growth and structural constraints on new supply.”
Gibson, Dunn & Crutcher acted as legal adviser to KKR.
TSB Capital Advisors and JP Morgan Securities acted for BREIT. Simpson Thacher & Bartlett acted as BREIT’s legal adviser.
Send feedback to Akanksha Soni
Follow Estates Gazette
