American Campus Communities, Inc. (ACC), a real estate investment trust (:REIT), recently announced that it has priced 15 million shares at $44.25 a share to increase its liquidity. To cover the over-allotment options, American Campus also intends to offer a 30-day option to the underwriters for purchasing an additional 2,250,000 shares. The offering is expected to close on July 16, 2012.
The company expects to generate net proceeds of approximately $636.4 million from the offering after the underwriting discount and estimated offering expenses. The net proceeds from the offering will be utilized to fund the acquisition of a portfolio of 15 student housing properties from the affiliates of Campus Acquisitions, LLC.
The remaining net proceeds will be utilized to repay its current debt, including 100% of the outstanding balance of its revolving credit facility, to fund its current development pipeline and potential acquisitions of student housing properties.
During the first quarter of 2012, American Campus reported first quarter 2012 adjusted FFO (funds from operations) of 59 cents per share compared with 58 cents per share in the year-earlier quarter. Funds from operations, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.
American Campus is the largest developer, owner and manager of high-quality student housing communities in the United States. The company primarily engages in developing, owning, and managing of high-quality student housing communities. The company owns 124 student housing properties comprising approximately 76,100 beds. Including its owned and third-party managed properties, the company’s total managed portfolio consists of 152 properties with approximately 99,500 beds.
American Campus currently has Zacks #2 Rank, which translates into a short-term Buy 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 #2 Rank.
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