AUSTIN, Texas--(BUSINESS WIRE)--American Campus Communities, Inc. (NYSE:ACC), the largest owner, manager and developer of high-quality student housing properties in the U.S., today announced the close of sale on an asset and the acquisition of two properties, all in separate transactions. As part of the company’s ongoing program to fund growth via dispositions, it sold Northgate Lakes, an off-campus community serving students attending the University of Central Florida (UCF) in Orlando for a sales price of $39.6 million. This sale brings the company’s year-to-date dispositions to $157.4 million. On the growth front, the company acquired 7th Street Station, a student housing community pedestrian to Oregon State University (OSU) in Corvallis, and The Plaza Apartments located across the street from Florida State University (FSU) in Tallahassee, which the company intends to demolish and redevelop the site. The combined purchase price of both acquisitions totals $36.9 million.
“We continue to execute on our long-term strategy to self-fund a greater portion of our growth,” said William Talbot, American Campus chief investment officer. “We’re focused on continually improving the quality of our portfolio by selling older products that may have diminishing future NOI growth along with assets that are farther from campus, while reinvesting in newer, core pedestrian assets in submarkets with barriers to entry.”
In July, the company completed the disposition of Northgate Lakes, a 710-bed community built in 1998 and previously acquired by the company as part of the Royal Properties portfolio in 2006. American Campus is currently developing The Plaza on University, a new pedestrian community serving students attending UCF. The 1,313-bed mixed-use development is located across from the main gates of UCF and will open in fall 2014.
American Campus closed on the acquisition of 7th Street Station in July. The 309-bed community opened 100 percent occupied in September 2012 and is currently 100 percent leased for this academic year. Located 0.3 miles from campus, the community is the first modern, purpose-built student housing community delivered in a market with significant barriers to entry. 7th Street Station offers an array of flat and townhome units along with a community center that features a fitness center, business center, game room and swimming pool. OSU is the second largest university in the Oregon University System with total fall 2012 enrollment of approximately 26,300 students. The University currently houses only 16 percent of the total student population. The company is targeting a 6.0 percent nominal and 5.8 percent economic cap rate for the first year, with year two stabilized cap rates of 5.9 percent nominal and 5.6 percent economic after stabilized expenses.
In August, the company acquired The Plaza Apartments, located just north of the FSU campus. The property will be demolished next year and developed as the second phase of the company’s highly successful U Club on Woodward project, which was fully preleased by January in its initial lease up for this fall. The acquired community is a 1970s apartment complex consisting of 359 beds and is currently 71 percent occupied. American Campus will operate the community until the current leases are vacated, which will be no later than July 31, 2014. The new development, U Club on Woodward Phase Two, will contain 496 beds in three-story townhome units and feature a 2,000-square-foot fitness center and resort-style swimming pool. The new development is expected to cost approximately $37 million with construction commencing during the third quarter of 2014 and occupancy in fall 2015.
About American Campus Communities
American Campus Communities, Inc. is the largest owner, manager and developer of high-quality student housing communities in the United States. The company is a fully integrated, self-managed and self-administered equity real estate investment trust (REIT) with expertise in the design, finance, development, construction management and operational management of student housing properties. American Campus Communities owns 163 student housing properties containing approximately 99,700 beds. Including its owned and third-party managed properties, ACC's total managed portfolio consists of 198 properties with approximately 125,600 beds. Visit www.americancampus.com and www.studenthousing.com.