CAMPUS CREST COMMUNITIES, INC. (CCG) SPO
|Company Name||CAMPUS CREST COMMUNITIES, INC.|
|Company Address||2100 REXFORD ROAD
CHARLOTTE, NC 28211
|CEO||Ted W. Rollins|
|Employees (as of 12/31/2011)||527|
|State of Inc||MD|
|Fiscal Year End||12/31|
|Exchange||New York Stock Exchange|
|Shares Over Alloted||0|
|Shareholder Shares Offered||--|
|Lockup Period (days)||180|
|Quiet Period Expiration||8/6/2012|
We estimate that the net proceeds we will receive from the sale of shares of common stock in this offering will be approximately $ million (or approximately $ million if the underwriters’ option to purchase additional shares is exercised in full), in each case after deducting the underwriting discount and other estimated offering expenses payable by us. We will contribute the net proceeds we receive from this offering to our operating partnership in exchange for OP common units in our operating partnership. Our operating partnership intends to use the net proceeds from this offering to: (1) acquire the remaining 50.1% ownership interest in The Grove at Moscow, Idaho and the remaining 80.0% ownership interest in The Grove at Valdosta, Georgia that we do not already own, for an aggregate purchase price of $16.2 million and to repay approximately $27.3 million of mortgage debt secured by these properties; and (2) to reduce borrowings outstanding under our revolving credit facility, and any remaining net proceeds will be used for general corporate purposes. As of March 31, 2012, borrowings under the mortgage loan secured by The Grove at Moscow bore interest at a rate of LIBOR plus 2.5% and totaled $14.1 million. This loan matures on November 11, 2012. As of March 31, 2012, borrowings under the mortgage loan secured by The Grove at Valdosta bore interest at a rate of 5.0% and totaled $13.2 million. This loan matures on October 31, 2013. The proceeds from these borrowings were used to refinance construction financing for The Grove at Moscow and to provide construction financing for The Grove at Valdosta. As of March 31, 2012, borrowings under our revolving credit facility bore interest at a rate of LIBOR plus 2.25% and totaled $94.0 million. Our credit facility matures on August 17, 2014, with an option to extend the maturity date for one additional year, subject to certain terms and conditions. The proceeds from the borrowings under our credit facility were used for development, acquisition financings and other corporate purposes. Pending application of the net proceeds from this offering, we intend to invest the net proceeds temporarily in interest-bearing, short-term investment- grade securities, money-market accounts or checking accounts, which are consistent with our intention to maintain our qualification for taxation as a REIT. Such investments may include, for example, government and government agency certificates, certificates of deposit, interest-bearing bank deposits and mortgage loan participations. These initial investments are expected to provide a lower net return than we will seek to achieve from investments in student housing properties. Affiliates of Raymond James & Associates, Inc., Citigroup Global Markets Inc., Barclays Capital Inc. and RBC Capital Markets, LLC are lenders under our credit facility. To the extent that we use a portion of the net proceeds from this offering to reduce borrowings outstanding under our credit facility, these affiliates will receive their proportionate shares of such portion of the net proceeds used to reduce amounts outstanding under our credit facility.
Competition from Universities and Colleges We are subject to competition for student-tenants from on-campus housing owned by universities and colleges. On-campus student housing has inherent advantages over off-campus student housing (such as the majority of our properties) in integration with the academic community, which may cause student-tenants to prefer on-campus housing to off-campus housing. Additionally, colleges and universities may have financial advantages that allow them to provide student housing on more attractive terms than we are able to. For example, colleges and universities can generally avoid real estate taxes and borrow funds at lower interest rates than private, for profit real estate concerns, such as us. However, residence halls owned and operated by the primary colleges and universities in the markets in which we operate typically charge lower rental rates but offer fewer amenities than those offered at our properties. Despite the inherent advantages of on-campus housing, most universities are able to house only a small percentage of their overall enrollment, and are therefore highly dependent on the off-campus market to provide housing for their students. High-quality and well run off-campus student housing can therefore be a critical component of an institution’s ability to attract and retain students. Accordingly, universities and colleges often have an interest in encouraging and facilitating the construction of modern off-campus housing alternatives. Competition from Private Owners We also compete with other regional and national owner-operators of off-campus student housing in a number of markets as well as with smaller local owner- operators. Currently, the industry is fragmented with no participant holding a dominant market share. There are a number of student housing properties that are located near or in the same general vicinity of many of our properties and that compete directly with our properties. We believe that a number of other large national companies with substantial financial and marketing resources may be potential entrants in the student housing business. The activities of any of these companies could cause an increase in competition for student- tenants and for the acquisition, development and management of other student housing properties, which could reduce the demand for our properties.
We are a self-managed, self-administered and vertically-integrated developer, builder, owner and manager of high-quality, purpose-built student housing properties in the United States. As of March 31, 2012, we owned interests in 33 operating student housing properties containing approximately
6,324 apartment units and 17,064 beds. All of our operating properties are recently built, with an average age of approximately 3.2 years as of March 31, 2012. As of March 31, 2012, 27 of our operating properties, containing approximately 5,156 apartment units and 13,884 beds, are wholly-owned, and six of our operating properties, containing approximately 1,168 apartment units and 3,180 beds, are owned through joint ventures with Harrison Street Real Estate (“HSRE”), in which we own interests ranging from 20.0% to 49.9%. We expect to complete construction and commence operations at three wholly-owned properties and three joint venture properties in August 2012. Most of our properties are in medium-sized college and university markets, which we define as markets located outside of major U.S. cities that have nearby schools generally with overall enrollment of approximately 8,000 to 20,000 students. We were incorporated in the State of Maryland on March 1, 2010, and commenced operations upon completion of our initial public offering of our common stock on October 19, 2010. Substantially all of our assets are held by, and we have conducted substantially all of our activities through, our operating partnership, Campus Crest Communities Operating Partnership, LP, and its wholly-owned subsidiaries. We are the sole general partner of our operating partnership, and, as a result, our board of directors effectively directs all of our operating partnership’s affairs. As of March 31, 2012, we owned 98.6% of the outstanding common units of limited partnership interest in our operating partnership (“OP common units”), and all of the outstanding preferred units of limited partnership interest in our operating partnership. We are organized and conduct our operations to qualify as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”). As a REIT, we generally will not be subject to U.S. federal income tax on our income to the extent we currently distribute our income to our stockholders and maintain our qualification as a REIT. ------ Our principal executive offices are located at 2100 Rexford Road, Suite 414, Charlotte, North Carolina 28211, and our telephone number is (704) 496-2500. Our website is www.campuscrest.com.
|Company Counsel||Hunton & Williams LLP and Saul Ewing LLP|
|Company Counsel||Saul Ewing LLP and DLA Piper LLP (US)|
|Lead Underwriter||Barclays Capital Inc|
|Lead Underwriter||Citigroup Global Markets Inc|
|Lead Underwriter||Raymond James and Associates, Inc|
|Transfer Agent||American Stock Transfer & Trust Company, LLC|
|Underwriter||Janney Montgomery Scott LLC|
|Underwriter||RBC Capital Markets, LLC|
|Underwriter||Robert W. Baird & Co. Incorporated|
|Underwriter Counsel||Sidley Austin LLP|
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