We have been actively helping our clients find the right private deals in real estate to serve as a component of their fixed income portfolio. I wanted to share the following Wall Street Journal Article about Private Equity firm Blackstone’s engagement in the sector, acquiring American Campus Communities for almost $12 billion:
The article highlights key things going on in this segment, which we have been monitoring and tracking as we invest for you:
Bet on Continued Rising Rents. As students return to campus, and even while they were taking classes remotely during the pandemic, rent collections remained high.
Numerous continued tailwinds. New construction remains limited, which enables property owners to face reduced competition. Additionally, the national housing shortage is pushing rents in campus areas higher. Lastly, the return of international students is driving demand.
Resilience through market cycles. In the article, Blackstone’s head of real estate, Nadeem Meghi, is noted as saying that part of the appeal of this segment is that is has not been as vulnerable to economic downturns as other sectors.