Blackstone REIT, Landmark Form $784M Student Housing JV

Blackstone Real Estate Investment Trust and Landmark Properties are forming a joint venture to recapitalize eight student housing properties held by Landmark totaling 5,416 beds in various parts of the country.

The companies didn't reveal the precise structure of the $784M JV, but typically under such an arrangement, the JV takes possession of the properties, with the two entities forming the partnership taking a specific stake in the JV itself.

During the coronavirus pandemic, fewer students needed housing, especially non-U.S. students whose education in this country was put on hold. As many colleges required vaccination as a condition of returning to campus, however, enrollment and occupancy started to recover for the fall 2021 semester, though the delta variant remains a wild card.

"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 Senior Managing Director Jacob Werner told Bloomberg.

Longer-term prospects for student housing also seem good, based on demographic trends. The National Multifamily Housing Council predicts that over the next 10 years, enrollment in U.S. colleges and universities will continue to increase by 1.1% annually on average.

Athens, Georgia-based Landmark operates 79 student housing properties totaling about 51,000 beds. Altogether, the company has about $7.7B in assets under management. Blackstone has about $208B in real estate assets under management.

Word of the deal came a day after news broke that Brookfield Asset Management and The Scion Group are in talks to form a JV to acquire at least $1B in student housing sectors. Other recent major investors in the student housing sector include private equity firm TPG and Cardinal Group Investments.