American Campus Communities, Inc. (ACC), a real estate investment trust (:REIT), recently acquired a portfolio of 19 student housing properties from affiliates of Kayne Anderson Capital Advisors, L.P. The company purchased the properties for $862.8 million, including the assumption of $395.8 million in mortgage debt and the remaining amount in cash.
The acquired portfolio spans several states and consists of a total of 12,049 beds including 366 beds which are currently under development at an existing property. The acquisition of the development property is expected to be complete in the third quarter of 2013.
With a current occupancy of 92.3% for the academic year 2012-13, these assets are expected to provide significant value through improved operations. Post-acquisition, American Campus expects some synergistic benefits from nine new properties located in seven existing markets. Additionally, the company also expects to add seven new Tier 1 markets. To further enhance rental rates and growth, the company expects to invest approximately $12.3 million in amenity upgrades and capital improvement in the properties.
The acquisition is in line with the company’s strategy to acquire high-quality properties with strong locational advantage in Tier 1 university markets that typically have high barriers to entry. The acquisition further reinforces American Campus’ policy of investing in the high-growth student housing industry as it focuses on providing premium quality student housing facilities.
American Campus is the largest developer, owner and manager of premium-quality student housing communities in the United States. The company primarily engages in development, ownership and management of high-quality student housing communities.
American Campus currently has Zacks #3 Rank, which translates into a short-term Hold rating. We have a long-term Neutral recommendation on the stock. One of its competitors, Education Realty Trust, Inc (EDR) also holds a Zacks #3 Rank.
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