Investment giant KKR & Co. Inc. (KKR) has announced a deal with Blackstone Real Estate Income Trust, Inc. (BREIT) whereby KKR-managed funds will acquire a collection of 19 purpose-built student housing properties from BREIT, at an approximate cost of $1.64 billion.
The purchase is to be principally backed by the KKR Real Estate Partners Americas III Fund. The properties in question comprise of 19 premium, purpose-built student accommodations, which together offer over 10,000 beds. These properties are scattered across ten states, predominantly around 14 prominent four-year public universities.
Following the deal’s conclusion, anticipated for the third quarter, the portfolio will be overseen by KKR’s University Partners, a US-based student housing owner and operator. After the acquisition, University Partners will own and manage over 25,000 beds, corresponding to nearly $4 billion of property value collectively invested by KKR and other stakeholders.
Emphasizing the strategic benefits of the transaction, Travis Roberts, CEO of University Partners, stated that approximately half of the acquired portfolio is located in areas where they already have operational experience. This deal will enable University Partners to broaden their reach into several lucrative new markets. Mr. Roberts further expressed his belief in the continued growth and demand for student housing, particularly in top university markets, attributable to robust enrollment growth and structural constraints on new supply.
It is noteworthy that BREIT originally acquired this property portfolio in 2018, in collaboration with Greystar Real Estate Partners, LLC.
