EdR (NYSE: EDR) announced June 25 that it has agreed to be acquired by an affiliate of Greystar Real Estate Partners in an all-cash transaction valued at approximately $4.6 billion, including debt.
As part of the transaction, Blackstone Real Estate Income Trust, Inc. will acquire a portfolio of EdR’s off-campus student housing assets for $1.2 billion in a joint venture with Greystar. Blackstone will hold a 95 percent stake in the joint venture.
Under the terms of the sale to Greystar, EdR shareholders will receive $41.50 per share in cash. This represents a premium of 26.3 percent over the 90-day volume-weighted average share price ending May 31, the last day before news of a pending EdR sale surfaced. The transaction is expected to close in the second half of the year.
Randy Churchey, EdR chairman and CEO, said the transaction with Greystar accomplishes the goal of maximizing shareholder value.
“We are certain today’s announcement is in the best interest of all of EdR’s stakeholders, including university partners, employees and stockholders.” In a recent Nareit video interview, Churchey noted that most REITs are currently trading at a discount to net asset value (NAV), “which is very frustrating for all of us.”
Bob Faith, founder, chairman and CEO of Greystar, said EdR has “one of the highest quality and best located student housing portfolios in the U.S.,” which will seed Greystar’s newly formed flagship student housing-focused perpetual-life fund.
The portfolio of off-campus assets in the Blackstone/Greystar joint venture includes assets adjacent to universities such as: University of California Berkeley; University of California Riverside; University of Virginia; University of Arizona; Arizona State University; University of Colorado Boulder; and Penn State. The portfolio is on average eight years old and has consistently maintained occupancy rates above 97 percent, the companies said. A Greystar/EdR team will manage the assets going forward.