American Campus Communities Acquires 3,776-Bed Student Housing Portfolio for $590.6M
AUSTIN, TEXAS — American Campus Communities Inc. (NYSE: ACC) has acquired a portfolio of seven student housing properties totaling 3,776 beds across the Western and Midwestern United States for approximately $590.6 million. Affiliates of Milwaukee-based development firm and Core Spaces and Chicago-based DRW Real Estate Investments LLC sold the assets.
All of the properties are associated with major universities, with enrollment averaging about 35,000 undergraduate and graduate students at each school. The company will invest about $8 million in up-front capital improvements to the portfolio.
Two of the properties are stabilized: the 513-bed Hub Eugene and the 655-bed State, which service students at the University of Oregon and Colorado State University, respectively. The company acquired these assets in August for a combined $146.1 million.
Another two of the properties, the 850-bed The James and the 248-bed Hub U District Seattle, are opening this fall. Those properties are located near the University of Wisconsin and the University of Washington, respectively.
The final three properties, which total 1,500 beds, are all under construction and slated for fall 2018 delivery. They include Hub Ann Arbor, Hub West Lafayette and Hub Flagstaff, which offer housing to students attending the University of Michigan, Purdue University and Northern Arizona University, respectively.
“These properties in this portfolio meet the highest levels of our investment criteria — differentiated products in close proximity to campus in submarkets with high barriers to entry,” says Bill Bayless, CEO of American Campus Communities.
“With the implementation of our operating platform across the portfolio, we should achieve meaningful accretion in asset value as well as additional operating efficiencies within the five markets where we have existing properties,” he adds.
Austin-based American Campus Communities will assume sole operational control of the portfolio following the acquisition. A timetable for the closing of the sale, which is subject to property tax assessments, earn-out adjustments and other closing conditions, has not yet been established.
American Campus Communities’ stock price closed at $47.32 per share on Friday, Sept. 22, down from $51.47 per share one year ago.
— Taylor Williams