AUSTIN-American Campus Communities Inc.'s Q3 2013 results showed a definite increase in funds from operations-modified along with a very slight decrease in occupancy. Specifically, FFOM was $0.39 per diluted share or $41.5 million, compared to the $0.32 per fully diluted share or $29.4 million for the same time last year. And the wholly owned portfolio occupancy of 96.7% was slightly below the 96.8% reported at the end of Q3 2012.
“We are pleased that our strong finish to the 2013-2014 lease-up has enabled us to lead the public student housing sector with occupancy of 96.7 percent,” says Bill Bayless CEO of American Campus. “The close of the third quarter marks the end of our 2013 integration efforts and the corresponding operational and financial impacts."
The next step, he notes, involves a focus more on already owned assets versus acquiring new ones. "Beyond the few acquisitions in our previously announced pipeline, we do not expect to participate in the current acquisition market but rather are focused on expanding our high quality ACE, off-campus and mezzanine development pipeline, which we intend to fund with current capacity and ongoing dispositions,” he says.
Other highlights for Q3 include:
- Delivery of seven owned development projects into service for the 2013-2014 academic year. The new projects, totaling $311.9 million in development costs, contain 3,945 beds and were 98% occupied as of September 30, 2013.
- The closing and putting into service of two presale mezzanine developments totaling $71.1 million, which were 96.4% occupied as of September 30, 2013.
- Disposition of five owned assets totaling 3,598 beds for $169.7 million, including 528 beds and $12.3 million of disposition activity subsequent to quarter end.
- Construction launch on two owned on-campus American Campus Equity projects with Drexel University and Northern Arizona University totaling $190 million and 1,644 beds.
- Acquisition of two properties, The Plaza Apartments in Tallahassee, FL, which the company intends to demolish and develop as a new student housing community, and 7th Street Station in Corvallis, OR, for a combined purchase price of $36.9 million. Subsequent to quarter-end, completed the acquisition of Park Point in Rochester, NY for a purchase price of $100.3 million.
- Completion of three on-campus third-party development projects, which earned a combined total of $4.9 million in third-party fees over the respective construction periods.
- Receipt of a third-party development project on the University of Toledo campus with estimated development fees of $2.1 million.
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