(Bloomberg) -- Blackstone Inc. agreed to sell a student-housing portfolio to KKR & Co. for $1.64 billion.

Blackstone Real Estate Income Trust will offload 19 student-housing properties with more than 10,000 beds to funds managed by KKR, according to a statement Thursday. The deal, which is expected to be completed by the third quarter, includes properties located near 14 public universities.

“This transaction is an excellent outcome for BREIT’s investors and demonstrates the strong demand for the high-quality assets in attractive markets that BREIT owns,” Jacob Werner, co-head of Americas acquisitions for Blackstone Real Estate, said in the statement. 

Blackstone spent years amassing a major portfolio of student housing properties, most notably through its 2022 acquisition of American Campus Communities. The company continues to believe in student housing, Werner said, with ACC expected to open six additional communities this year. BREIT bought the portfolio that it’s selling to KKR in 2018 through a joint venture with Greystar Real Estate Partners.

Blackstone sold $1 billion of California warehouses in March and offloaded a slice of a commercial-property loan portfolio from the failed Signature Bank. With the latest student housing deal — which was sold at a 7% premium to net asset value — BREIT has sold $20 billion of real estate assets at a premium to NAV since the start of 2022, according to Blackstone.

The firm has also been hunting for deals as prices fall across the commercial property market, with President Jon Gray saying that the asset manager thinks real estate prices are bottoming. Blackstone struck a $10 billion deal earlier this month to purchase Apartment Income REIT and agreed in January to buy rental housing landlord Tricon Residential Inc. for $3.5 billion.

KKR started University Partners in 2016, seeking to bet on student housing by acquiring properties near universities across the US. The business now also does third-party management. With the latest deal, University Partners will own and manage more than 25,000 beds.

“Student housing is a sector that we have long-term conviction in,” Justin Pattner, a partner at KKR and head of real estate equity in the Americas, said in the statement. 

Pattner said the company is deploying money into a “compelling” market environment for quality buildings. KKR is acquiring the portfolio primarily from its KKR Real Estate Partners Americas III fund. About half of the properties are in markets that University Partners already has experience working in, University Partners Chief Executive Officer Travis Roberts said in the statement. 

“We believe student housing in the top university markets will continue to benefit from strong enrollment growth and structural constraints on new supply,” Roberts said.

(Updates with more details on KKR’s student-housing properties starting in seventh paragraph.)

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