Campus Crest Communities Inc (CCG), a real estate investment trust (:REIT), recently completed the acquisition of the remaining 50.1% stake in The Grove at Moscow, Idaho, and the remaining 80.0% stake in The Grove at Valdosta, Georgia from its joint venture partner, Harrison Street Real Estate, for a total consideration of $16.2 million. The company also repaid approximately $27.3 million of mortgage debt secured by these properties.
The acquisition was funded through $43.5 million proceeds generated from its share offering program.
This is a strategic move by the company as with the completion of this deal, Campus Crest has taken over wholly-owned interests in seven properties from Harrison Street and increased its wholly-owned operating properties from 27 to 29. The company continues as a joint venture partner in four additional assets with Harrison Street.
The selective acquisition of the Harrison Street joint venture assets continue to be an excellent opportunity for Campus Crest to grow its wholly-owned portfolio. These assets demonstrate strong pre-leasing and operational results and are located at universities with attractive market uniqueness.
Campus Crest reported first quarter 2012 FFO (funds from operations) of 15 cents per share compared with 17 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.
Campus Crest is a developer, builder, owner and manager of high-quality, purpose-built student housing properties located close to campuses in targeted U.S. markets.The company rents student housing properties, offers student housing services and provides construction, development and management services.
Campus Crest currently retains a Zacks #2 Rank, which translates into a short-term Buy rating. We have a long-term Neutral recommendation on the stock. One of its competitors, Education Realty Trust (EDR), also carries a Zacks #2 Rank.
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