Monster deal: Austin-based American Campus being sold for $13 billion

In one of the biggest acquisitions of a Central Texas company ever, Austin-based student housing company American Campus Communities is being scooped up by New York investment firm Blackstone in a deal valued at nearly $13 billion. Blackstone, the world's largest alternative asset manager, said Tuesday that it will pay $12.8 billion in an all-cash transaction for American Campus. American Campus says it is the nation’s largest owner, manager and developer of high-quality student housing communities. It owned 166 student housing properties with about 111,900 beds as of Dec. 31, including around the University of Texas, Arizona State University, Florida State University and the University of California in Berkeley. About a quarter of its buildings are on college campuses.

“American Campus Communities has a best-in-class portfolio and platform, built on longstanding relationships with some of the most distinguished and fastest growing universities in the country,” Jacob Werner, Blackstone’s co-head of Americas acquisitions, said in a statement. The per-share price of the all-cash deal is $65.47, nearly 14% higher than American Campus' last stock close. The American Campus transaction has been approved by the company's board of directors and is expected to close in the third quarter. Private equity firms are betting that private student housing complexes will provide better returns compared with apartments and other residential assets. Dormitory rates can reset every year, which serves as a hedge against inflation. The market for student housing will expand to 9.2 million beds by 2031 from 8.5 million in 2020, according to the National Multifamily Housing Council. The all-cash transaction is the largest student housing deal by the Blackstone Real Estate Income Trust. Known as BREIT for short, the $97 billion fund last year invested in the industry through a $784 million joint venture with Landmark Properties.