Brookfield Reportedly Set To Make $1B Move Into Student Housing

Brookfield Asset Management is in negotiations to acquire at least $1B in student housing properties via a joint venture with The Scion Group, Bloomberg reports, citing anonymous sources.

Scion is already a major player in the sector, operating about 58,700 student housing beds and managing $5B of assets for institutional investors. More than 200 colleges and universities form its client base, including the University of California system, Arizona State University, the University of Texas and Florida State University.

Scion is also no stranger to joint ventures with investors. In 2018, the company partnered with the Canada Pension Plan Investment Board and Singapore sovereign wealth fund GIC Private Limited to buy a portfolio of 24 U.S. student housing properties totaling more than 13,600 beds for $1.1B. 

For its part, the Canada-based Brookfield hasn't invested in U.S. student housing assets. The investor does, however, own Student Roost, which has 45 properties in the U.K., providing 16,580 beds to students.

Student housing had a good run up to 2020 as the student population increased. In 2010, about 2.5 million students lived in such accommodations. Just before the coronavirus pandemic in 2020, that number had risen to nearly 2.8 million, according to Census Bureau data.

Despite the pandemic, student housing continues to be on a growth trajectory, fueled by the younger members of the age cohort often known as Gen Z, who were born after 1996. In the U.S., there are about 90 million members of that generation compared to 80 million millennials, who are generally finished with college.

The National Multifamily Housing Council predicts that from 2020 to 2031, enrollment in U.S. postsecondary schools will increase annually by an average 1.1%, giving the industry further room to grow.