American Campus Communities Inc. Reports Operating Results (10-Q)
American Campus Communities Inc. has a market cap of $1.57 billion; its shares were traded at around $29.96 with and P/S ratio of 5. The dividend yield of American Campus Communities Inc. stocks is 4.5%. American Campus Communities Inc. had an annual average earning growth of 5.6% over the past 5 years.ACC is in the portfolios of Chris Davis of Davis Selected Advisers, Columbia Wanger of Columbia Wanger Asset Management, Ron Baron of Baron Funds, Manning & Napier Advisors, Inc, Jim Simons of Renaissance Technologies LLC, Steven Cohen of SAC Capital Advisors.
Highlight of Business Operations:Our third-party development and construction management services as of June 30, 2010 consisted of four projects under contract and currently in progress with fees ranging from $2.2 million to $7.6 million. As of June 30, 2010, fees of approximately $2.8 million remained to be earned by us with respect to these projects, which have scheduled completion dates of July 2010 through August 2011.
In June 2010, we entered into an agreement to purchase the full ownership interests in 14 student housing properties containing 8,534 beds owned in two joint ventures in which we currently have a 10 percent interest. The Company will acquire the controlling members 90 percent interest in the 14 properties based on a total estimated value of approximately $348.9 million, which includes $252.2 million in mortgage loan debt at a weighted average interest rate of 5.85 percent. Two of the joint venture properties are not included in the acquisition and will remain in the existing joint venture. Management anticipates that this transaction will close in the third quarter of 2010, subject to various closing conditions, including lender approvals.
On July 8, 2010, we acquired a 201-unit, 487-bed wholly-owned property (Sanctuary Lofts) located near the campus of Texas State University in San Marcos, Texas, for a purchase price of $21.4 million, which excludes approximately $1.8 million of anticipated transaction costs, initial integration expenses and capital expenditures necessary to bring this property up to our operating standards. We did not assume any debt as part of this transaction.
Overview: As of June 30, 2010, we were in the process of constructing one owned off-campus property and one ACE property that will be operated under a ground/facility lease with a related university system. We estimate that the total development costs relating to these activities will be approximately $74.6 million. As of June 30, 2010, we have incurred development costs of approximately $10.3 million in connection with these properties, including land costs of approximately $4.6 million. Remaining development costs are estimated to be approximately $64.3 million. The activities are described below:
University of New Mexico Phase I: As of June 30, 2010, our University of New Mexico Phase I ACE property was under construction with total development costs estimated to be approximately $39.2 million. The project is scheduled to complete construction and open for occupancy in August 2011 and will serve students attending the University of New Mexico. As of June 30, 2010, the project was approximately 1% complete, and we estimate that remaining development costs will be approximately $36.4 million. As of June 30, 2010, we have funded 100% of the project s development costs and plan to fund the remaining development costs internally.
In May 2010, we announced the establishment of an at-the-market share offering program (the “ATM Equity Program”) through which we may issue and sell, from time to time, shares of common stock having an aggregate offering price of up to $150 million. Actual sales under the program will depend on a variety of factors, including, but not limited to, market conditions, the trading price of the Company s common stock and determinations of the appropriate sources of funding for the Company. From inception of the ATM Equity Program through June 30, 2010, we issued approximately 0.3 million shares at weighted average price of $28.57 per share for net proceeds of approximately $7.5 million, after payment of approximately $0.1 million of commissions to the sales agents. We may continue to sell shares of common stock under this program from time to time based on market conditions, although we are not under an obligation to sell any shares. As of June 30, 2010, we had approximately $142.3 million available for issuance under this program. Subsequent to June 30, 2010, we sold approximately 0.2 million shares under the ATM Equity Program for net proceeds of approximately $4.4 million, after payment of approximately $67,000 of commissions to the sales agents.
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