AUSTIN, Texas--(BUSINESS WIRE)--American Campus Communities, Inc. (NYSE: ACC), the nation’s largest owner and manager of high-quality student housing properties, today provided an update regarding the novel coronavirus (COVID-19).
“As part of our commitment to the health and wellbeing of our residents, employees and university communities, we are closely monitoring the Centers for Disease Control and Prevention (CDC) and World Health Organization statements regarding COVID-19 and are communicating the CDC hygiene and prevention guidelines to our residents and employees,” said Bill Bayless, American Campus Communities CEO. “Colleges and universities are enacting a wide array of measures in response to COVID-19 and American Campus Communities is closely monitoring the actions and policy changes of each of the 93 universities we serve. Currently, we have not experienced any definitive negative impacts to our operating performance and are not revising our 2020 earnings guidance at this time. However, given the rapidly evolving environment, it is too soon to determine if there will ultimately be any financial impact to our business in 2020. At this point, our primary focus is on serving the needs of our student residents and partner universities to ensure that students continue to have housing in an environment conducive to academic success regardless of the curriculum delivery method.”
The company takes standards for hygiene and cleanliness seriously. As part of our standard property operating procedures, daily cleaning and disinfecting occurs in accordance with current CDC guidelines, which include everything from handwashing hygiene and cleaning product specifications to common area cleaning procedures.
Specific to COVID-19, the company has assembled a task force charged with monitoring the evolving situation and coordinating ACC’s actions and communications with employees, residents and university partners.
Academic Year 2020-2021 Leasing Update
At this time, our leasing activity for fall 2020 continues to be within our historical trend and at a pace consistent with our previously stated opening same store rental revenue growth range of 1.5 percent to 3.0 percent for the 2020-2021 academic year.
“As always, we are closely monitoring our preleasing activity for the 2020-2021 academic year and thus far have seen no evidence of impact associated with COVID-19,” said Jennifer Beese, American Campus Communities COO. “We are currently trending within our anticipated revenue growth range for this year’s lease-up, and preleasing activity over the last several weeks has met our expectations and been in-line with historical trends. Given the rapidly evolving environment, we will update the market if there is a change in the velocity of our lease-up that we believe impacts our ability to achieve our rental revenue guidance for the upcoming academic year.”
2020 Development and Capital Recycling Update
The company continues construction on its development pipeline that includes $279.7 million of deliveries in May through August 2020. At present, these projects remain on-time and on-budget and the company does not anticipate any supply chain disruption. The company is staying abreast of the policies of our partner institutions regarding access to development sites, which have been accessible to date.
Also, as previously announced, the company is under contract and expects to close on the disposition of The Varsity for proceeds of approximately $148.0 million. Subject to standard closing conditions, this transaction is still anticipated to close in the first quarter and is not subject to a financing contingency.
Non-GAAP Financial Measures
The National Association of Real Estate Investment Trusts ("NAREIT") currently defines Funds from Operations ("FFO") as net income or loss attributable to common shares computed in accordance with generally accepted accounting principles ("GAAP"), excluding gains or losses from depreciable operating property sales, impairment charges and real estate depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. We present FFO because we consider it an important supplemental measure of our operating performance and believe it is frequently used by securities analysts, investors and other interested parties in the evaluation of REITs. We also believe it is meaningful to present a measure we refer to as FFO-Modified, or (“FFOM”), which reflects certain adjustments related to the economic performance of our on-campus participating properties and excludes property acquisition costs and other non-cash items, as we determine in good faith. FFO and FFOM should not be considered as alternatives to net income or loss computed in accordance with GAAP as an indicator of our financial performance or to cash flow from operating activities computed in accordance with GAAP as an indicator of our liquidity, nor are these measures indicative of funds available to fund our cash needs, including our ability to pay dividends or make distributions.
The company defines property net operating income (“NOI”) as property revenues less direct property operating expenses, excluding depreciation, but including allocated corporate general and administrative expenses.
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. As of December 31, 2019, American Campus Communities owned 167 student housing properties containing approximately 112,800 beds. Including its owned and third-party managed properties, ACC's total managed portfolio consisted of 203 properties with approximately 139,300 beds. Visit www.americancampus.com.
In addition to historical information, this press release contains forward-looking statements under the applicable federal securities law. These statements are based on management’s current expectations and assumptions regarding markets in which American Campus Communities, Inc. (the “Company”) operates, operational strategies, anticipated events and trends, the economy, and other future conditions. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. For discussions of some risks and uncertainties that could cause actual results to differ materially from those expressed or implied by the forward-looking statements, please refer to our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2019 under the heading “Risk Factors” and under the heading “Business - Forward-looking Statements” and subsequent quarterly reports on Form 10-Q. We undertake no obligation to publicly update any forward-looking statements, including our expected 2020 operating results, whether as a result of new information, future events, or otherwise.