AUSTIN, TEXAS — Austin-based American Campus Communities Inc. (NYSE:ACC) will purchase a portfolio of 19 student housing properties from affiliates of Kayne Anderson Capital Advisors LP for an aggregate $862.8 million. The portfolio includes 12,049 beds, with an additional 366 beds at an additional phase currently under development at an existing property.
“We believe these 19 select assets offer high-quality products and locations in Tier 1 markets,” said Bill Bayless, CEO of American Campus Communities. “Furthermore, approximately 75 percent of the select portfolio is an average of 0.3 miles from campus in submarkets with barriers to entry.”
The properties had an occupancy rate of 92.3 percent for the 2012–2013 academic year. The weighted average age of the portfolio is 3.7 years.
The acquisition consideration includes the assumption of approximately $396.2 million of outstanding mortgage debt and $466.6 million in cash. The mortgage debt to be assumed has a weighted average annual interest rate of 5.28 percent and weighted average term to maturity of 8.3 years.
Completion of the transaction is not subject to financing and does not require approval by ACC stockholders. American Campus intends to fund the purchase price with available cash, borrowings under its revolving credit facility, a bridge loan facility or the sale of debt or equity structures.
The acquisition of the existing properties is expected to close in the fourth quarter of 2012. The acquisition of the development property is expected to close during the third quarter of 2013. After acquisition of the properties, ACC will lease and manage the development property. The company also expects to replace six third-party managers.
“We are excited about this opportunity to create substantial value by overlaying our operating platform on this portfolio,” says Bayless.
The portfolio includes the following properties:
- The Lofts of Kennesaw at Kennesaw State University
- Aspen Heights and The Cottages of Baton Rouge at Louisiana State University
- Phases I and II of The Lodges of East Lansing at Michigan State University
- The Province – Rochester at Rochester Institute of Technology
- 25Twenty at Texas Tech University
- 5 Twenty Five Angliana and 5 Twenty Four Angliana at University of Kentucky
- The Province – Louisville at University of Louisville
- Grindstone Canyon, The Cottages of Columbia and Forest Village/Woodlake at University of Missouri
- The Cottages of Durham at University of New Hampshire
- The Province – Greensboro at University of North Carolina at Greensboro
- West 27th Place at University of Southern California
- The Province – Tampa at University of South Florida
- The Lofts at Capital Garage and RAMZ Apartments on Board at Virginia Commonwealth University
- The Province – Dayton at Wright State University
ACC is the largest developer, owner and manager of student housing communities in the United States. The company’s total managed portfolio includes 169 properties with approximately 108,300 beds.
American Campus Communities’ stock price closed at $45.01 per share on Friday, up from trading at $37.31 per share at this time last year.
— Brittany Biddy