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Deals & Dealmakers

Greystar to acquire student housing leader for $4.6B

EdR, one of the nation’s largest owners of student housing communities, is set to be acquired by Greystar Real Estate Partners for $4.6 billion.

Greystar has formed a new perpetual-life fund, Greystar Student Housing Growth and Income Fund, to facilitate the deal.

It has also formed a joint venture with Blackstone Real Estate Income Trust, Inc. (BREIT) to acquire a portfolio of off-campus student housing assets with 10,500 beds across 20 assets, for $1.2 billion.

“For more than 50 years, EdR has been a pioneer in the student housing industry, partnering with some of America’s most prestigious universities to enhance and transform their campus housing and achieve their student success goals,” said Randy Churchey, EdR’s Chief Executive Officer and Chairman of the Board of Directors.

“As a public company, one of our priorities is to maximize stockholder value and we believe this transaction with Greystar accomplishes that goal. We are certain today’s announcement is in the best interest of all of EdR’s stakeholders, including university partners, employees and stockholders.”
Churchey added, “Since the current EdR management team took over on January 1, 2010 — and including this transaction — EdR stockholders will have received a total stockholder return of 293 percent, which ranks in the top quartile of all public U.S. equity REITs in existence during that time period.”

EdR has one of the highest quality and best located student housing portfolios in the U.S., and it will seed Greystar’s newly formed flagship student housing-focused perpetual-life fund.

Bob Faith, the Founder, Chairman and Chief Executive Officer of Greystar, said, “We are excited to capitalize on our significant scale and experience to enhance the platform’s performance and value over the long term.

“EdR’s ONE Plan on-campus platform is an integral component that drove our interest and we are excited about the continued on-campus growth opportunities it provides. We believe in the long-term fundamentals supporting the sector and will continue to seek out opportunities to invest in student housing.”

BofA Merrill Lynch is serving as exclusive financial advisor, and Morrison & Foerster LLP and Venable LLP are serving as legal advisors to EdR. J.P. Morgan Securities LLC is serving as exclusive financial advisor, and Hogan Lovells US LLP and King & Spalding are serving as legal advisors, to Greystar.

JPMorgan Chase Bank, N.A. has provided a commitment letter to Greystar’s newly formed fund for debt financing for the transaction. Citigroup Global Markets Inc. and TSB Capital Advisors are acting as financial advisors to BREIT, and Simpson Thacher & Bartlett LLP is acting as legal advisor to BREIT.

Following this transaction, Greystar will be the 2nd largest institutional owner and manager of student housing in the United States, in addition to Greystar’s global position as the largest student housing operator in Spain and the 3rd largest owner of student housing assets in the United Kingdom.

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