(Bloomberg) -- Blackstone Inc. is increasing its investment in student housing as the U.S. emerges from the Covid-19 pandemic, agreeing to buy American Campus Communities Inc. in a cash transaction valued at about $12.8 billion.

The private equity firm will pay $65.47 a share, according to a statement Tuesday, or about 14% above Monday’s closing price. 

“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 the statement.

Private equity firms are investing in college housing as Covid-19 restrictions ease and students return to campus. The firms are wagering that private, off-campus complexes will provide better returns compared with apartments and other residential assets, which have soared in value since the pandemic. 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.

Blackstone last year formed a $784 million joint venture with Landmark Properties. That deal involved a portfolio of buildings with 5,416 beds. New York-based Blackstone said at the time it was bullish on the industry because student-housing occupancy levels were quickly returning to pre-Covid levels.

Shares of Austin, Texas-based American Campus, rose 13% in pre-market trading.  

The company, which went public 18 years ago, says it’s the nation’s largest owner, manager and developer of high-quality student housing communities. The portfolio comprises 166 owned properties in 71 markets, including Arizona State University, The University of Texas at Austin, Florida State University, and the University of California – Berkeley.






(Adds pre-market trading in penultimate paragraph.)

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