KKR Strikes $1.6B Deal for BREIT Student Housing Portfolio

KKR will acquire a portfolio of 19 purpose-built student housing properties with over 10,000 beds from Blackstone Real Estate Income Trust (BREIT) for about $1.64 billion.

BREIT acquired the portfolio in June 2018 for $1.2 billion through a 95%-5% joint venture with Greystar Real Estate Partners.

“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,” Jacob Werner, co-head of Americas acquisitions for Blackstone Real Estate.

The properties are anchored to 14 major four-year public universities across 10 states and offer a variety of premium amenities, with most within walking distance of campus.

“Student housing is a sector that we have long-term conviction in,” said Justin Pattner, partner at KKR and head of Real Estate Equity in the Americas. “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 global investment firm is investing primarily through its KKR Real Estate Partners Americas III vehicle. The fund’s investors include the New Mexico State Investment Council and the New York State Common Retirement System.

After the close of the transaction, which is expected by the third quarter, the portfolio will be managed by University Partners, an owner and operator of U.S. student housing launched by KKR in 2016. University Partners will own and manage over 25,000 beds valued at nearly $4 billion.

Blackstone will remain the largest owner of student housing in the U.S. after the sale is completed, with over 190 properties representing about 140,000 beds, mostly thanks to its wholly owned portfolio company American Campus Communities (ACC). Blackstone acquired ACC in 2022 for $12.8 billion.