Austin, Texas — American Campus Communities has announced progress on its 2012 growth plan and leasing status as an update for the REITWeek 2012 investor conference in New York this week. During the quarter, the company acquired Avalon Heights, an off-campus project adjacent to the University of South Florida (USF) and purchased an off-campus land parcel at Florida State University (FSU) in Tallahassee. The company anticipates construction will begin on 601 Copeland this week.
"These two transactions are representative of the growth opportunities available to well-capitalized companies in this highly fragmented sector of real estate," said Bill Bayless, American Campus CEO. "From Fall 2011 through Fall 2013, we expect to add 28 properties totaling $1.1 billion to our new store portfolio."
Avalon Heights, a $30 million student housing community containing 754 beds, is across the street from campus and 0.35 miles from campus core. The community center features more than 20,000 square feet of amenity space including a fitness center, swimming pool, hot tub, basketball court, tennis courts, sand volleyball court, tanning bed, business center, and a large game room with pool tables and gaming consoles.
ACC anticipates spending $2.1 million to upgrade the amenities and common areas of the community. The fully furnished units include full kitchens, bedroom/bathroom parity, full size washers and dryers, and a 42-inch wall-mounted flat screen TV provided in every living room. The projected year-one cap rate for the asset (inclusive of $2.1 million in capital) is 6.2 percent nominal and 5.6 percent economic, with a projected year-two nominal cap rate of 7.1 percent.
601 Copeland is a $21.1 million development project consisting of 283 beds and is 0.15 miles from FSU's campus. The 1.35-acre boutique site is located in the popular Southgate submarket, which is a heavily populated student area in the heart of sorority row. The property will feature a 5,964-square-foot community center including a fitness center, social lounge, wireless Internet café, and resort-style pool. The community will open for occupancy in Fall 2013 and is targeting a 7.0 percent initial yield on this development.
Additionally, the company completed the disposition of Pirate's Cove, a 12-year old asset located 2.5 miles from East Carolina University, for $27.5 million.
In conjunction with REITWEEK 2012, the company is filing a detailed leasing update for the 2012-2013 academic year. As of June 8, the same store portfolio is 91.8 percent applied for and 85.6 percent leased compared to 95.1 percent applied for and 88.2 percent leased for the same date prior year, with a 3.5 percent current rental rate increase projected over the in-place rent.