American Campus Communities, Inc. (
, a real estate investment trust (REIT), reported third quarter
2012 FFOM (funds from operations- modified) of 32 cents per
share, missing the Zacks Consensus Estimate of 37 cents.
Moreover, the quarterly FFOM also missed the year-ago level of 34
cents per share.
Reported FFOM stood at $29.4 million compared with $24.0 million
in the year-ago quarter. Adjusted FFOM, which excludes the
acquisition expenses worth $4.7 million, stood at $34.1 million
during the quarter. However, FFO for the quarter stood at
$28.9 million, compared to $23.7 million in the year- earlier
Total revenue during the quarter increased 24.8% year over year
to $118.8 million. The increase was mainly attributable to a
surge in property acquisitions, completion of development of
properties and hike in rental rates for the 2012-2013 academic
year. However, revenue missed the Zacks Consensus Estimate of
Comparable wholly-owned portfolio occupancy stood at 97.4%
compared to 98.2% in the prior-year quarter. Same store net
operating income climbed up 4.1% and average rental rate surged
3.4% on a year over year basis.
Acquisitions & Dispositions
Continuing with its portfolio repositioning program, American
Campus acquired 17 properties comprising 8,914 beds for $844.0
million during the quarter. Of the acquired properties, 15 assets
are of the student housing portfolio, for which the company plans
to invest around $13.7 million for renovation purpose to drive
rental rate and revenue growth going forward.
American Campus sold an asset subsequent to quarter end. The
company disposed a combined 528-bed community - Brookstone
Village and Campus Walk - situated in Wilmington, North Carolina,
for a total cost of $26.6 million.
During the quarter, the company completed the construction of 11
owned properties and put those into service for the upcoming
2012-2013 school year. As of September 30, 2012, the new
properties comprising of 6,703 beds are 95.2% occupied.
In addition, the company started the construction on a
seven-phase project at Prairie View A&M University in Texas.
Once this $15.6 million project is completed, it will comprise of
Subsequent to the end of the third quarter, the company
initiated the construction on a mixed-use development project
located in Orlando, Florida. The construction is scheduled to be
completed by August, 2014 and will feature 60,000 square-feet of
retail space along with four storeys of residential units.
AMER CAMPUS CTY (ACC): Free Stock Analysis
EDUCATION RLTY (EDR): Free Stock Analysis
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At the end of the third quarter 2012, the company had cash and
cash equivalents of $18.0 million and $206.0 million remaining
under its unsecured revolving credit facility.
Austin, Texas-based American Campus tweaked its 2012 FFO and
adjusted FFOM guidance. The FFO is now projected to be between
$2.04 and $2.08 per share, compared to the previous guidance
range of $1.99 to $2.10 per share. Adjusted FFOM is now expected
to be in the range of $1.99 to $2.03 per share, compared to the
previous guidance range of $1.94 to $2.05 per share.
Based on American Campus's strong internal growth, ongoing
portfolio repositioning activity and high portfolio occupancy, we
expect analysts to raise their estimates in the coming days.
Currently, the Zacks Consensus Estimate for 2012 and 2013 are
pegged at $2.00 and $2.33, respectively.
American Campus, which competes with the likes of
Education Realty Trust, Inc. (
, currently carries a Zacks #3 Rank, implying a short-term Hold
rating. We also reiterate our long-term Neutral recommendation on
Note: FFO, a widely accepted and reported measure of the
performance of REITs, is derived by adding depreciation,
amortization and other non-cash expenses to net income.