Each common share of GMH and each unit of GMH's operating partnership has been converted into the right to receive 0.07642 of a share of ACC common stock and $3.36 per share in cash. This is in addition to the previously announced special distribution of $1.71, which GMH shareholders received when the deal closed.
The cash-and-stock deal consisted of several moving parts including ACC's assumption of the portfolio's outstanding debt, which totaled approximately $963 million and a separate transaction in which GMH's military housing portfolio was sold to a US subsidiary of Balfour Beatty Plc for $350 million.
American Campus Communities also joint ventured with an institutional fund via Fidelity Real Estate Group. Fifteen GMH student-housing properties worth $326 million were transferred to that venture, in which American Campus is providing property management services and retaining a minority interest. KeyBank National Association provided a $200-million term loan to fund part of that particular piece of this complex deal.
Also, in April, ACC revealed it was planning to sell 4.5 million shares of its common stock in an underwritten public offering, the proceeds of which would be used help fund the transaction.
With the huge transaction now within its corporate folds, ACC can begin to focus on its strategic aim of expanding into more than 40 new collegiate markets and creating growth opportunities in each of the local REIT's business segments. The student-housing sector is a management-intensive niche that tends to perform optimally under large economies of scale, which this deal most certainly delivers: now the company owns 83 student housing communities consisting of approximately 51,600 beds, has a JV interest in 23 properties totaling approximately 13,200 beds--including eight properties held by GMH in existing joint ventures--and provides third-party management of 26,600 beds.
"We are pleased to announce the closing of this transaction," Bill Bayless, ACC CEO, says in a prepared statement. "We believe the application of our premier management systems will unlock the operational upside of the GMH portfolio, creating one of the best platforms in the industry for future earnings growth." ACC did not return calls in time for deadline.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
