Morgan Stanley Real Estate Investing and Global Student Accommodation have completed a $1 billion-plus acquisition of eight student housing properties, marking one of this year's largest transactions in the sector globally.
The off-market portfolio spans 6,200 beds across seven states. The properties serve such top-tier universities as the University of Virginia, the University of Florida, Texas A&M and Penn State. The portfolio's occupancy is nearly 100%, according to separate announcements of the deal by the buyers and sellers.
The largest property in the transaction is the 330-unit Retreat at Corvallis, serving Oregon State University.
Landmark Properties and a subsidiary of the Abu Dhabi Investment Authority sold the portfolio. The joint venture was formed in 2015 to develop student housing adjacent to leading U.S. universities.
Institutional investors have been betting that U.S. student demand, combined with constrained housing supply, will sustain high occupancy rates.
The United States represents the world's largest university market with 20 million students, according to Morgan Stanley. Demographics favor continued enrollment growth as Gen Z moves through college age.
Despite a minor slowdown in leasing velocity through the first half of this year, rent growth is a defining trend in student housing, driven by persistent demand and supply imbalances, according to College House, a student housing data analytics firm. Rents were up 5% through the first half of the year.
The deal expands the Morgan Stanley-GSA partnership to 50 properties across 23 states with nearly 24,000 beds.
"This acquisition demonstrates our access to unique opportunities and the strength of our institutional relationships," Nicholas Porter, CEO of the Dot Group, GSA's parent company, said in a statement.
International capital has been a recent driver of deals.
Yugo, a global student housing operator, will assume management of the newly acquired assets. The U.K.-based company has also been expanding in the United States independently.
In September, Yugo acquired Campus Advantage, a student housing management and investment firm based in Austin, Texas, that owns 20 properties totaling more than 5,700 units. With the acquisition, Campus Advantage plans to rebrand as Yugo U.S., based in Denver.
That deal gave Yugo U.S. control of nearly 40,000 beds across 88 properties in 28 states. The companies did not disclose terms.