Blackstone, Landmark Properties form $784M student housing joint venture

5,400-bed deal comes amid sustained interest in college dorms from institutional investors

Landmark Properties CEO J. Wesley Rogers and Blackstone CEO Steven Schwarzman (Landmark, Getty)
Landmark Properties CEO J. Wesley Rogers and Blackstone CEO Steven Schwarzman (Landmark, Getty)

Is student housing the next big opportunity in real estate? Institutional investors seem to think so.

On Friday, Blackstone Real Estate Income Trust announced a $784 million joint venture with student housing developer Landmark Properties to acquire and recapitalize an eight-property, 5,400-bed student housing portfolio.

The eight assets in this transaction are at “leading universities” where enrollments are on the rise, Blackstone Real Estate senior managing director Jacob Werner said in a statement.

“Student housing has a history of being resilient while generating strong cash flows,” Werner said. “We look forward to growing our presence in this asset class and working [with Landmark] on future transactions.”

Landmark is the country’s most active student housing developer and contractor. The company has over $7.7 billion assets under management, over 50,600 student housing beds and another $3.5 billion in assets under construction. This week’s deal will increase its portfolio to 79 student housing communities

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Student housing appears to be an increasingly attractive investment play for alternative asset managers. On Thursday, Bloomberg reported that Brookfield Asset Management was in talks with student housing developer Scion Group on a $1 billion student housing venture, the investment giant’s first foray into the sector.

Unlike Brookfield, Blackstone is no stranger to student housing. In 2018, the firm teamed with Greystar Real Estate Partners to invest $1.2 billion in a 10,500-bed student housing portfolio. Last year, Blackstone expanded its student housing efforts into the UK, spending $6 billion on a 28,000-bed portfolio from Goldman Sachs.

As colleges and universities rebound from the pandemic, the National Multifamily Housing Council reports that the student housing market is expected to increase by around 700,000 beds over the next decade.

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