American Campus Communities, Inc. (ACC), a real estate investment trust (:REIT), recently acquired 15 student housing properties from Campus Acquisitions for $627.0 million. The transaction consists of approximately $380.9 million in cash, the assumption of approximately $231.1 million of outstanding mortgage debt, and the issuance of 325,098 operating partnership units worth $15 million.
The acquired properties consist of a total of 6,579 beds. Out of the 15 properties acquired, 11 are located in existing American Campus markets and 4 are located in four new tier I markets. The acquisition is in line with the American Campus strategy of acquiring premium quality student housing properties in submarkets which have high barriers to entry. The acquired properties are located in close proximity to their associated campus with a combined distance to campus of 0.23 miles.
Besides implementing its proprietary operating platform in all the properties, American Campus expects to invest $13.7 million in capital improvements in the acquired properties. The investment is aimed at enhancing rental rates and revenue growth. With this deal, the company expects to achieve synergistic benefits within the seven markets where it already has its presence and significant accretion in asset value.
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. Presently the company wholly owns 140 student housing properties containing approximately 84,300 beds.
American Campus currently has a Zacks #3 Rank, which translates into a short-term Hold rating. We also 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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