Greystar To Acquire EdR For $4.6B
As part of the deal Greystar and Blackstone are acquiring a portfolio of off-campus student housing for $1.2 billion.
MEMPHIS, TN–In a transaction that has been rumored for weeks, student housing REIT Education Realty Trust, or EdR, will be acquired by a fund affiliated with Greystar Real Estate Partners for $4.6 billion in cash, including debt.
The $41.50 per share purchase price represents a 26.3% premium over the 90-day volume-weighted average share price ending May 31, 2018 and a 13.6% premium over the May 31, 2018 closing share price, which was the last trading day before news stories speculating about the possible sale of EdR began circulating.
The acquisition will seed Greystar’s newly formed flagship student housing-focused perpetual-life fund, Greystar Student Housing Growth and Income Fund, which is making the acquisition.
Blackstone Enters The Picture
As part of the transaction, a 95%-5% joint venture led by Blackstone Real Estate Income Trust with Greystar will acquire a portfolio of off-campus student housing assets for $1.2 billion, which the newly combined Greystar/EdR team will continue to manage.
The portfolio consists of 10,500 beds across 20 assets, which are located next to universities with strong enrollment growth, such as University of California Berkeley, University of California Riverside, University of Virginia, University of Arizona, Arizona State University, University of Colorado Boulder and Penn State. The portfolio is about eight years old and has an occupancy rate of over 97%.
The transaction is expected to close in the second half of 2018, subject to customary closing conditions, including the approval of EdR’s stockholders.
The Appeal of EdR’s ONE Plan
One of the drivers of the deal was EdR’s ONE Plan on-campus platform, according to Greystar CEO Bob Faith. EdR describes the initiative as a program that “gives the university access to a single trusted partner.” Just last month EdR broke ground on SouthSide Commons with Lehigh University in Bethlehem, Pa. The 428-bed community is being financed through EdR’s ONE Plan.
Following this transaction, Greystar will be the second largest institutional owner and manager of student housing in the United States.