Blackstone Boosts Student Housing Portfolio With $784M Joint Venture

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Multibillion-dollar investment giant Blackstone has started a $784 million joint venture with Landmark Properties to recapitalize eight student housing locations, totaling 5,416 beds across the United States. 

Georgia-based Landmark owns and operates more than 75 student housing properties across the nation. The companies’ partnership expands Blackstone’s already considerable real estate reach into the student housing sector. 

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“We’ve seen a very quick uptick in student housing occupancy to pre-COVID levels, which is one of the reasons we’re so bullish on the space,” Blackstone’s Jacob Werner said in a statement to Commercial Observer.

Blackstone purchased billions of dollars of real estate assets during the pandemic, ranging from single-family homes to life sciences lab space, CO reported. It finished the first quarter of 2021 with $196.3 billion in real estate assets under management, up 22 percent from the $160.9 billion in the first quarter of 2020.

As the world’s largest private owner of commercial real estate, Blackstone is only getting bigger. The company, investing under the non-traded Blackstone Real Estate Income Trust, is optimistic about the student housing sector as students return to in-person instruction and with the market experiencing a supply shortage.

“The deal, more broadly, is part of Blackstone’s conviction that the U.S. faces a shortage of residential of all varieties, including single-family homes and apartments,” Werner said. “For the most part, housing has been undersupplied in this country since the Great Financial Crisis. We think this investment plays to a similar supply-demand perspective as our broader residential portfolio.”

Blackstone has invested in the sector before. The company formed a partnership with Greystar Real Estate Partners in 2018 to purchase a 10,500-bed student housing portfolio for $1.2 billion, and bought another 28,000-bed portfolio in the United Kingdom from Goldman Sachs in 2020 for $6 billion, Bloomberg reported.

Celia Young can be reached at cyoung@commercialobserver.com.