Through its American Campus Equity program, American Campus Communities has built or is in negotiations for 14 projects at eight schools. Its largest client is Arizona State University, where it has five on-campus developments totaling $350 million, including the 1,866-bed Vista del Sol.
chased just $410 million of student housing in 2011, a 12% drop from 2010.
However, experts say that not only will
REIT acquisitions spike in 2012 and
beyond, but they will also continue investing a significant amount of capital in new
development.
In 2011, ACC delivered $109 million in
new development and acquired $261 million in assets. “And we’ll be even more
active moving forward,” Bayless says. “We’ll
deliver $385 million in fall 2012 with 11
developments opening, and we’ve
announced an additional $258 million
pipeline for 2013.” Bayless says from fall
2011 through fall 2013, ACC will add more
than $1 billion to its portfolio through
development and acquisitions.
The REIT has some initiatives that will
help it reach that goal. Its American
Campus Equity program, which is very
active, allows ACC to develop on-campus
properties with its own equity through
ground leases with universities. This allows
universities to meet demand for on-campus housing while focusing their resources
on other facilities’ needs. Under the program, ACC has completed, is developing
or is negotiating for a total of 14 projects
at eight schools. Its largest client is Arizona
State University, where it has five on-campus developments totaling $350 million.
“Each time we enter a market, we make a
decision of what’s the most cost-effective
way to enter it,” he says. For example, ACC
developed a property at the University of
Texas at San Antonio for $44,000 a bed in
fall 2011. “We could not have bought in
that market for less than $55,000 a bed. Just
up the road at Texas State University, we
bought an infill urban property, also for
$44,000 a bed. The land assemblage and
the cost to redevelop that asset today would
have been over $50,000 a bed, so we’re very
strategic in analyzing each market.”
But REITs aren’t the only major players
out there. Institutional fund managers like
Kayne Anderson Real Estate Advisors and
Harrison Street Real Estate Capital continue
to move aggressively into the sector, some-
times joining with experienced operators.
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