Simpson, Dentons Drive Blackstone-American Campus
Blackstone Real Estate Income Trust Inc. and American Campus Communities Inc. (ACC) both turned to a longtime advisor for an agreement announced Tuesday, April 19, in which BREIT agreed to pay $12.8 billion to pay in cash and assume debt for ACC, an Austin, Texas-based REIT that develops, owns and operates student housing communities in the United States
ACC turned to Toni Weinstein, X. Lane Folsom and Raleigh Johnston of Dentons US LLP for legal advice, Jeffrey D. Horowitz, Ben Lett and Chris Djoganopoulos of BofA Securities Inc. and David Gorden of KeyBanc Capital Markets Inc. General Counsel for financial advice Brian Winger worked on the transaction at the company.
Weinstein has worked with American Campus Communities since 2005, the year after the REIT went public, and has completed a number of deals for the company, which advised her on the purchase of GMH Communities Trust for $1.4 billion in 2008; 19 college dormitories by Kayne Anderson Capital Advisors LP for $863 million in 2012; and seven college residences by Core Spaces LLC and DRW Holdings LLC for $591 million in 2017.
She has also worked for ACC in both the debt and equity markets and has worked on the formation of a number of joint ventures and mezzanine loan transactions. Weinstein also represented Weingarten Realty Investors in a $3.7 billion sale to Kimco Realty Corp last year. (KIM).
BREIT retained Brian M. Stadler and Matthew B. Rogers of Simpson Thacher & Bartlett LLP as advisors and Wells Fargo Securities LLC, JPMorgan Securities LLC and TSB Capital Advisors as financial advisors.
Stadler has a longstanding relationship with BREIT and its private equity sponsor Blackstone Inc. (BX). He and Rogers are working with BREIT on Resource REIT Inc.’s upcoming $3.7 billion purchases, announced Jan. 24, and the duo have partnered with Simpson Thacher’s Krista Miniutti to acquire Blackstone Acted on the $3.6 billion purchase of Bluerock Residential Growth REIT Inc. a deal announced on December 20 and finalized in early April. Stadler and Simpson Thacher’s Anthony Vernace represented Blackstone in the $10 billion purchase of QTS Realty Trust Inc last year.
Stadler and Rogers also advised BREIT last year when it partnered with Starwood Capital Group Management LLC on the $6 billion purchase of Charlotte, NC-based mid-range hotel company Extended Stay America Inc. and its stock pair REIT ESH Hospitality Inc. merged. Stadler, Rogers and Sasan Mehrara of Simpson Thacher also represented BREIT in the $3.1 billion purchase of WPT Industrial Real Estate Investment Trust last year.
BREIT will pay $65.47 per share for ACC. The parties hope to close the deal in the third quarter.
The Deal reported last year that private equity, pension funds and foreign sovereign wealth funds have a strong appetite for US student housing assets — and that ACC, the last publicly traded student housing REIT, has become a strong potential takeover target.
In January 2021, ACC settled with activist Jonathan Litt’s Land & Building Investment Management LLC in a deal that ousted the chairman of the Student Housing REIT and installed three new directors, apparently selected by the company, on a soon-to-be ten-member board. The three directors, including Alison Hill, who was previously the managing director of strategic capital at Prologis Inc. (PLD), remain on the board.
In February, ACC announced that it had rejected a Land & Buildings candidate for directorship, while calling a potential takeover bid by the activist fund a “false bid.” Litt was criticized for making offers without financing details, and ACC said he was “unable to fund or complete an offer of $57 per share.”
Last week, Litt withdrew his nominee and submitted a letter to the REIT, noting that he had “renewed confidence” that the company would address the issues he raised, such as “improved operations” and “an openness to maximizing value.” through a sale, if that is the case. The right opportunity presents itself.”
—Ronald Orol contributed to this report