April 20, 2022

$13B Blackstone deal could launch U District student housing project

Rendering by GGLO [enlarge]

Looking southeast, the two towers will be a few steps from campus and U District Station.

It's been a bit of a mystery why, amid the University District's recent proliferation of new student-housing projects, the bare site of the demolished University Temple United Methodist Church remains untouched. There's been nothing but concrete slab at 1415 N.E. 43rd St. since last summer. That's on the corner of 15th Avenue Northeast — directly west of the University of Washington campus.

American Campus Communities and architect GGLO have a master use permit for the planned 23- and 14-story towers, which are slated to have about 933 beds, amenities, parking and a new but smaller space for the church. A construction permit appears close, with Walsh Construction attached.

An anticipated land sale, which the church announced four years ago, hasn't yet closed. When it does, it may be to a different ownership. ACC and Blackstone just announced a $13 billion deal in which the investment giant will buy all ACC's shares and take it private. The deal is expected to close in the third quarter.

ACC is based in Austin, Texas, and the 18-year-old REIT calls itself the nation's largest developer, owner and manager of student housing. Its current owned portfolio stands at 166 properties with some 111,900 beds, and 203 managed properties with 140,900 beds.

In our market, all near the UW, it lists Twelve at U District, Bridges @ 11th and Hub U District — which total about 886 beds, the standard metric in student housing. If and when it starts, the University Temple project will more than double that number.

ACC co-founder and CEO Bill Bayless said of the Blackstone deal, “This transaction delivers compelling, immediate, and certain value to our shareholders, while positioning ACC to further expand our competitive advantage as we continue in our quest to lead the student housing industry to new heights. Blackstone's expertise, resources and consistent access to capital will allow us to rapidly leverage our platform and core competencies to entrepreneurially grow our core business and to pursue additional innovative opportunities.”

Blackstone's Jacob Werner said in the same joint statement, “Our perpetual capital will enable ACC to invest in its existing assets and create much-needed new housing in university markets. We're excited to work with the ACC team to deliver communities where students love living.”

Blackstone now has about $279 billion under management. It was advised in the ACC deal by Wells Fargo Securities, J.P. Morgan Securities and TSB Capital Advisors. ACC was advised by BofA Securities and KeyBanc Capital Markets.