Hilton Worldwide Holdings inked a deal to buy Graduate Hotels for $210M from Adventurous Journeys Capital Partners. The hotel chain includes 37 existing and planned properties in university towns.

Hilton will enter into long-term franchise agreements for the properties and oversee the brand's growth, which the hotelier estimates might eventually total as many as 500 locations. AJ Capital Partners will retain ownership of the real estate associated with the properties.

“While it is definitely a niche within the industry, it’s a very big niche that we think has a huge addressable market that we’re not really covering,” Hilton CEO Chris Nassetta told The Wall Street Journal.

Nassetta further told the Journal that he believes Graduate could become a “megabrand” within hospitality.

Each Graduate Hotel is themed to align with the nearby school, such as keycards that resemble student ID cards or homages to famed alumni, such as a recreation of Michael Jordan's University of North Carolina dorm room at the brand's Chapel Hill, North Carolina, location.

Demand for hotels near college campuses is driven by collegiate sports, reunions and parents' weekends, according to Nassetta. College towns also attract visitors as the location of major medical facilities and other research organizations.

Ann Arbor, Michigan, Knoxville, Tennessee, and Palo Alto, California, are some of the U.S. college towns that are home to Graduate Hotels. More are planned in Austin and Dallas, as well as Auburn, Alabama, and Princeton, New Jersey.

Counting Graduate, Hilton will own 23 hospitality brands. It plans to incorporate the Graduate brand into its lifestyle portfolio, which includes other brands such as Canopy, Curio Collection, Tapestry Collection, Tempo and Motto, each of which were launched in the last decade. Graduate Hotels will also soon be part of Hilton's booking system and loyalty program.