(Bloomberg)—KKR & Co. has sold seven US student residences on Harrison Street, a deal that shows continued strength for the sector even as other residential and commercial real estate markets cool.
The price of the portfolio, with 4,500 beds, was $725 million, according to people familiar with the deal. Representatives for KKR and Harrison Street declined to comment.
Compared to apartments, student housing offers higher returns measured by cap rates, according to MSCI Real Assets.
“As cap rates for traditional multi-family assets reach new highs, the relative return opportunity afforded by student housing may still pique investor interest,” the Real Estate Information Service said in a May 22 report. June.
US student housing transaction volume jumped 121% in the first quarter from a year earlier to $2.4 billion, according to MSCI. Then in April, Blackstone Inc. agreed to pay $12.8 billion for American Campus Communities Inc., which claims to be the largest owner of college housing with 111,900 beds. This transaction should be finalized in September.
Commercial real estate transactions in general slowed in May after a record start to the year as rising interest rates and inflation caused prices to cool, according to MSCI.
Harrison Street is one of the largest owners of student housing in the United States, with a portfolio of 97,000 beds valued at $11.8 billion as of March 31. He has been an active trader, selling two portfolios in November worth $1.9 billion.
KKR, the private equity giant with $479 billion in assets, has acquired 10,000 student housing beds for $1.2 billion since 2016. It manages student housing through its holding company, University Partners, which operates dormitories primarily at growing public colleges.
To contact the author of this story: John Gittelsohn in Los Angeles at [email protected]
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