American Campus Gains Traction in Q2

AUSTIN, TX-Locally-based American Campus Communities Inc. has reported that it has turned around from a loss, posting net income in Q2 2010 of $800,000, or 1 cent per share, compared to a $5.3 million loss in the same quarter last year. The firm discussed its second quarter financial results in a Wednesday conference call.

The company, which has a total managed student housing portfolio of 139 properties, also said it posted revenue of $76.7 million, up 7.6% from $71.3 million in Q2 2009. The firm also achieved quarterly FFO of $20.3 million, or 38 cents per share, compared to $16.2 million, or 33 cents per share a year ago.

“(Our team’s) hard work in efforts this quarter resulted in more than $400 million in external growth via acquisitions, off-campus development and ace,” said CEO Bill Bayless during the call. “It also produced solid internal growth and net asset value creation in our core and also meaningful activity in our third-party services segment. Our team’s delivering in every area.”

The company also had a number of successful transactions during the second quarter, such as an agreement to buy 14 student housing properties for $349 million, and the acquisition of Sanctuary Lofts, a 487-bed community near Texas State University in San Marcos, TX for $21.4 million. ACC has also started construction on a number of new projects, and has been selected by Princeton University, Illinois State University and Northern Illinois University to develop housing.

William Talbot, SVP of investments for the company, said there is continued improvement in the acquisition environment. “We have seen eight Class A properties marketed for sale that are in core locations less than a half mile from the subject university of expected occupancies in excess of 95% for the upcoming fall. From discussions with brokers, these assets are seeing strong interest and a majority of these assets are anticipated to trade in the low to mid six cap rate range. We believe we will continue to see a strong pipeline of acquisition opportunities in the third and fourth quarter as leasing is finalized. We believe cap rates will continue downward as better products continues to come to market and competition increases due to the improved access to debt and equity capital in the sector,” Talbot said during the call.