American Campus Q1 Meets Expectations

AUSTIN, TX-American Campus Communities Inc.’s Q1 figures demonstrated positive results as the company continued integrating the massive GMH portfolio acquired close to two years ago into its holdings. Total revenues, net operations and funds from operations climbed, with management confident the trend would continue.

CEO Bill Bayless said ACC’s the two main objectives are achieving net asset value in the core business, and making the American Campus Equity Program (ACE) a top investment priority. “We’ve made excellent progress on both objectives,” he commented. “First-quarter results met internal expectations.”

On the value side, NOI increased to $36 million from $18 million in the first quarter of 2008. Total revenues, in the meantime, were $77.7 million, up from the Q1 2008 total of $41 million. Funds from operations were $20 million, compared to $13 million during the same time last year.

Furthermore, the company’s ACE program, a development partnership with universities, also bore some fruit. Chief investment officer Brian Nichols said ACC is working with the University of New Mexico at Albuquerque, Portland State University in Oregon and Arizona State University in Tempe, AZ.

In New Mexico, ACC is in the early stages of development for the first phase of a 2900-bed project. The 1300-bed phase will replace older and obsolete product, and is targeted for a fall 2011 delivery. Design is still in progress for the project at Portland State, which has a fall 2012 delivery date, while feasibility studies are underway for the ASU development, with no timeline or budget set.

Nichols also said ACC acquired 24 acres near the University of San Antonio for $4.5 million. “We’re not planning on starting construction during this development cycle,” he added. “But we felt the land cost was attractive enough so we could hold this for future development.”

Meanwhile, ACC, through CB Richard Ellis is shopping a portfolio of seven properties in Arizona, California, North Carolina and South Carolina, carrying a combined $80 million in debt. Nichols said the call for offers ends the first week of May. He said that the majority of interest has been from regional buyers who have experienced operators, but won’t really know for sure until the call for offers has been received.