Investment giant Blackstone, mainly through entities associated with Blackstone Real Estate Income Trust and Blackstone Property Partners, has inked a deal to buy American Campus Communities for $12.8B in cash.

Blackstone is paying $65.47 a share for the company, which represents a 14% premium compared with the closing price for the stock on Monday. The deal is expected to close in the third quarter of this year, subject to approval by ACC shareholders.

ACC owns 166 properties in 71 markets. The majority of its assets are purpose-built student housing within walking distance of their respective university campuses. About a quarter of its communities are on campus.

Austin-based ACC will continue to manage the assets. The company, with capital backing from Blackstone, will invest in its existing assets and create new housing in university markets, Blackstone Real Estate co-Head of Americas Acquisitions Jacob Werner said in a statement.

The ACC deal is the latest indication that investors are turning their attention to student housing. Since the onset of the coronavirus pandemic, investors have sought the higher yields the asset class offers compared to more traditional assets, industry experts said at a Bisnow event last year.

“Student housing has been kind of the net beneficiary of really compressed yields on market-rate, conventional [housing] and other really hot asset classes right now,” Newmark Vice Chairman and head of its student housing division Ryan Lang said at the event. “Certainly over the past 18 to 24 months, [student housing] has looked like a relative bargain.”

Investor appetite is international as well. In February, Canadian private equity giant Brookfield said that it is mulling a sale of Student Roost, which has about 23,000 student housing beds in the UK. Just before the pandemic hit, Blackstone bought UK student housing company iQ from Goldman Sachs and the Wellcome Trust for about $6.1B.

Student housing rents remained relatively high during the pandemic, despite a long period when many students attended classes remotely, The Wall Street Journal reports.

There isn't much new student housing construction, and the national housing shortage is pushing up rents near campus. International students are also returning to the U.S. in increasing numbers, pushing up demand for student housing.