After Cornering Rentals, Blackstone Is Now Doubling Down On Student Dorms

For much of the past decade, private equity giant Blackstone, which at last check had $881 billion in AUM, was the single largest institutional landlord in the US, and according to some, the “largest owner of real estate in the world.” Then a few years ago, Blackstone lost that designation when it comes to residential housing (to this day it remains the largest commercial landlord by a wide margin); however the recent explosion in home prices and rents prompted the Wall Street titan to double down efforts to recover the title of undisputed landlord champion, and last summer the firm announced its latest transaction (funded by ultra cheap debt courtesy of the Fed) when it purchased Home Partners of America, which owns more than 17,000 houses throughout the US, for $6 billion.

Yes, despite a growing bipartisan political backlash against institutional landlords translating in popular blowback at a time when rents are soaring at the fastest pace on record, Blackstone continues to exhibit all the PR grace of a bull in a China shop, as it extends its marketshare grab in US real estate, with the firm extending its pivot to dorms, as it slowly but surely hopes to become the marginal price setter in all US real estate.

On Tuesday morning, Blackstone agreed to buy student-housing owner American Campus Communities in a cash transaction valuing the company at about $12.8 billion, a bet that rents will continue to rise as more college students return to campus.

The private equity firm will pay $65.47 a share, or about 14% above Monday’s closing price. Blackstone is taking the real-estate investment trust private through Blackstone Real Estate Income Trust and Blackstone Property Partners, which unlike its traditional private-equity funds can hold properties as long-term investments.- READ MORE