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Report: Greystar in Talks to Buy Education Realty Trust for $3.1 Billion

Deal Would Be Largest Student Housing Merger Since Harrison Street/Campus Communities Pairing in 2016
June 14, 2018
Pictured: EdR's GrandMarc at Westberry Place, a 244-unit student apartment built in 2007.

Education Realty Trust Inc. is reported to be engaged in exclusive talks to be acquired by apartment owner-operator Greystar Real Estate Partners, which has offered $41.50 a share in a deal valued at $3.1 billion.

The buyout talks, first reported by the Wall Street Journal, would be the largest in the student housing sector since Harrison Street Real Estate Capital bought Campus Crest Communities, a student housing REIT with a portfolio of more than 38,000 beds in 2016.

Analysts have been expecting a possible merger transaction involving Education Realty Trust (NYSE: EDR) when reports first surfaced during the Interface Student Housing industry conference in April in Denver, the industry’s largest trade meeting. The company's stock price has lagged and the trust had already pared back development commitments for projects delivering in fall of 2019 to $120 million from this year’s $650 million.

The company is now facing the prospect of having to sell stakes in some of its best assets, said Alexander Goldfarb, REIT analyst for Sandler O’Neill Partners. EDR's earnings shortfalls over the past four years gave rise to pressure to seek a takeover deal, Goldfarb said in a note to clients Wednesday.

Closely held Greystar recently launched a $500 million real estate debt fund.

The offer price could still change when the deal is announced, which could occur this week, according to the news report. However, Education Realty was earlier reported to be in talks with undisclosed private equity firms seeking to take the REIT private.

The Wall Street Journal also cited sources that said a group led by student-housing operator Scion Group and real estate investment management firm Harrison Street Real Estate Capital, which acquired Campus Communities in 2016, is still seeking to buy out Education Realty despite the REIT's exclusive talks with Greystar.

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