In two separate but closely related deals made public Monday, an affiliate of Greystar Real Estate Partners acquired student housing giant EdR for $4.6B. In conjunction, Blackstone REIT and Greystar JV purchased a 10,500-bed EdR student housing portfolio for $1.2B.
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The acquisitions are the latest in the movement of big institutional capital into the student housing space, as asset prices rise and cap rates fall. Rents are also rising quickly in a number of markets.
Earlier this year, for example, a JV of Goldman Sachs and Greystar acquired three student housing properties at a 4.1% cap rate in a deal that more closely resembled that of a portfolio of core multifamily assets.
The deep-pocketed Greystar, acting through a newly formed perpetual-life fund, Greystar Student Housing Growth and Income Fund, agreed to pay EdR stockholders $41.50 per share in cash. That represents a premium of 26.3% over the 90-day average share price ending May 31, and a premium of 13.6% over the closing share price the day news broke about the possible sale.
EdR is one of the largest owners, developers and managers of student housing in the United States. Currently the company owns about 45,000 beds serving 47 universities in 26 states.
BREIT will hold a 95% stake in the portfolio of 20 assets, while Greystar will hold the remaining 5%. The properties are near large institutions, including the University of California Berkeley, University of California Riverside, University of Virginia, University of Arizona, Arizona State University, University of Colorado Boulder and Penn State.
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