Austin, Texas — American Campus Communities has acquired The Block, a six-community off-campus property consisting of 1,555 beds. The Block is in the West Campus submarket and serves students attending The University of Texas at Austin.
ACC has been active in acquisitions recently. In addition to The Block, the REIT is expecting to close in mid-September on the Campus Acquisitions transaction, which was announced in July. That deal included 15 student housing properties with 6,579 beds, including two properties and an additional phase at an existing property currently under development. These acquisitions will be completed through a $627 million merger with affiliates of Campus Acquisitions. Among these holdings, ACC highlights UT's The Castilian, The Texan and The Vintage. ACC also is developing the 17-story freshman residence hall, The Callaway House Austin, opening Fall 2013.
In January, the purchase of 26 West in Austin for $86.2 million was announced. All together, American Campus will own or have under construction approximately 4,270 student housing beds in the West Campus submarket. As part of its expansion in the UT off-campus housing market, American Campus has also become the official student housing sponsor of UT Athletics.
Prior to the company's recent reentry into the market, American Campus has not owned or managed properties in the Austin market since 2005.
"We have been waiting patiently for the right opportunities to come back strong into our beloved hometown of Austin," said Bill Bayless, American Campus CEO. "The Block, along with our other Austin communities, is in line with our strategic plan to own differentiated Class A assets within walking distance to campus in submarkets with high barriers to entry. We are excited to be offering a variety of high-quality products and price points that serve the broadest range of UT students and parents."
The Block, built in 2007-2008, is currently 97 percent occupied. Each of the six communities that comprise The Block offers a parking garage, a rooftop lounge, a fitness center, and a variety of floor plans. There is also a centralized community center featuring a game room, business center, and pool with sun deck for use by all residents.
The units contain a washer and dryer, stainless steel appliances, granite countertops, cherry wood cabinets, stained concrete floors, nine-foot ceilings, and ceiling fans. The projected year-one cap rate for the project (inclusive of $3.5 million in upfront capital for upgraded amenities and deferred maintenance) is 5.9 percent nominal and 5.6 percent economic.