Blackstone’s Recent Purchase Confirms Dominance in Real Estate Market

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Blackstone’s Recent Purchase Confirms Dominance in Real Estate Market

Blackstone Inc will buy American Campus Communities Inc for $12.8 billion including debt, according to Reuters.  

American Campus Communities, a student housing company, announced on Tuesday that Blackstone, the world’s biggest alternative asset manager, is purchasing their company and bets on rents rising after colleges reopen.

The deal comes months after Jonathan Litt’s activist firm Land & Buildings sought a seat on American Community Campus’s board.  Litt’s firm urged the company to sell its assets aggressively and buy back stock.

American Community Campus owns 166 properties across 71 university markets across the United States.  The per-share price of the all-cash deal is nearly 14% higher than ACC’s last stock close.

The result is American Communities Campus being made private through Blackstone Real Estate Income Trust Inc and Blackstone Property Partners.  It is the latest in a string of headline-grabbing transactions by the company.

Mergers and acquisitions in the real estate investment trust sector reached a record high in 2021.  This is in part due to inexpensive capital from low interest rates, a result of the strength of the U.S. housing market and the economic recovery from the pandemic.

In 2021 along, the real estate investment trust sector rose to $140 billion from $17 billion in the previous year, according to real estate services provider JLL.

Blackstone is becoming the dominant force in the real estate industry.  In another bet, Blackstone agreed to buy Bluerock Residential Growth REIT in a $3.6 billion deal back in December.

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