Private equity firms and asset managers are plowing billions into the student and college housing industry as they look to further capitalize on rising real estate values and an unprecedented global student housing shortage.

Led by Blackstone's April agreement to take American Campus Communities private for $12.8 billion—the largest deal in the sector on record—private equity firms have committed $20.3 billion to student housing in 2022 alone, according to PitchBook data. That total exceeds the previous five years combined.
   

At the center of private equity's spending spree is a global shortage of college housing, an issue further exacerbated by a wave of soaring real estate values and living costs. As the dust from the COVID-19 pandemic begins to settle, students are returning to campuses to find that housing is in short supply.

The shortage is notably prevalent in California, where the average cost of on‑campus living, including both housing and food, is $17,259 across University of California campuses and $14,401 across California State University campuses annually, according to the California Legislative Analyst's Office 2022-23 budget.

The soaring cost of housing has been blamed for a proportional increase in student homelessness. The rate of students experiencing homelessness has surged in recent years, affecting one in 10 California State University students, according to a UCLA report.

No PE firm has gone after student housing assets quite like Blackstone. The investor's industry-leading real estate war chest is well-known, but within that chest is a multibillion-dollar student housing portfolio.

Including Blackstone's American Campus Communities deal—a portfolio that includes 166 properties in 71 university markets including the University of California, Berkeley, Arizona State University and Florida State University—the firm has handled more transactions and blown away other asset managers in terms of deal value invested in the student housing space in the past five years.

Another major player is Singaporean sovereign wealth fund GIC, which has announced around $6 billion in student housing deals in the UK so far this year, according to PitchBook data. In May, GIC and Greystar Real Estate Partners won a £3.3 billion (about $3.9 billion) bid for Student Roost, a portfolio including over 23,000 student housing beds, according to reports.

In June, GIC and Dutch pension manager APG agreed to acquire a stake in The Student Hotel, valuing the student accommodation specialist at €2.1 billion.