Morgan Stanley JV Pays $1B for Student Housing Portfolio

Morgan Stanley is adding to its student housing portfolio.

Morgan Stanley Investment Management and partner Global Student Accommodation acquired an eight-property, 6,200-bed student housing portfolio from Abu Dhabi Investment Authority and Landmark Properties, Bloomberg reported. The deal was valued at more than $1 billion.

The portfolio is close to a handful of major universities, including the University of Virginia, the University of Florida, Texas A&M and Penn State University. The portfolio is nearly fully occupied, the owners said in a press release.

Yugo, a student housing operator, is set to rebrand and manage the properties, which represent the joint venture’s first foray into Virginia, Georgia and Pennsylvania.

“This student housing portfolio fully aligns with our strategy to acquire high-quality, resilient assets in prime locations,” Morgan Stanley Real Estate Investing’s Will Milam said in a statement.

The joint venture between Morgan Stanley and GSA dates back to 2021. At the time they joined forces, GSA contributed its $1.6 billion portfolio to the partnership. That starting portfolio accounted for nearly 15,000 beds spanning 21 states and 29 cities, including Cincinnati, Raleigh, Tempe and Lexington, Kentucky.

Today, the joint venture’s portfolio spans 50 properties across 36 cities and features nearly 24,000 beds.

Student housing emerged in recent years as one of the hottest sectors for commercial real estate investors. When multifamily and other commercial real estate assets seemed unappealing, student housing appeared recession-proof, as college students are always going to need a place to temporarily live.

In 2021, Landmark launched a $784 million joint venture in student housing with Blackstone. A year later, it announced a $2 billion joint venture with the Abu Dhabi Investment Authority, one of its most frequent partners.

And in 2022, Blackstone acquired American Campus Communities for $12.8 billion.

— Holden Walter-Warner