American Campus Communities Enters into Non-Binding Letter of Intent to Develop and Own Housing for the Disney College Program at the Walt Disney World Resort
Business Wire 4-Jun-2018 4:05 PM
Company also provides capital recycling update
American Campus Communities, Inc. (NYSE:ACC), the largest owner,
manager and developer of high-quality student housing properties in the
U.S., today announced that it has entered into a non-binding letter of
intent to lease land from Walt Disney World Resort in Lake Buena Vista,
FL to develop and own housing for participants of the Disney College
Program. ACC and Walt Disney World Resort are still negotiating the
terms of a definitive agreement, and if ACC and Walt Disney World Resort
are able to reach a definitive agreement, the new purpose-built housing
will include ACC-designed units that offer a variety of configurations
and price points that provide privacy and individuality for residents.
If final negotiations are successfully concluded and a definitive
agreement is executed, the parties will execute a ground lease
conditioned upon the receipt of all necessary permits and final project
feasibility. The $615 million project is anticipated to be structured as
an American Campus Equity (ACE®) transaction, whereby
American Campus Communities will serve as the developer, manager and
owner via a 75-year ground lease. Although the final scope, feasibility
and timing have not been finalized, the company currently expects the
development to be delivered in multiple phases, with the first phase
scheduled for occupancy in May 2020 with full development completion in
May 2023. Upon completion, the project is targeting a stabilized yield
of 6.8 percent.
Informational Presentation
An informational presentation is available in the Investor
Relations section of the American Campus Communities website, www.americancampus.com.
Capital Recycling Update
As part of its capital allocation and funding strategy, given its
growing high-quality development pipeline, the company completed the
portfolio sale of three owned assets to an institutional partnership for
$245 million. The transaction included the prepayment of $37 million of
secured mortgage debt and represented an average economic cap rate of
4.1 percent based on in-place rental revenue, escalated trailing-12
operating expenses and historical average capital expenditures.
"We are pleased to have completed these capital recycling activities,"
said Bill Bayless, American Campus Communities CEO. "We believe the
additional dispositions further prove the value and attractiveness of
student housing to institutional real estate investors and provide us
with the opportunity to recycle capital into higher risk-adjusted return
investments. Further, the disposition of these assets provides a clear
indication of the private market value for core student housing located
within walking distance to tier-1 universities. The sold assets reflect
the large majority of the company's remaining portfolio and further
underscore the significant dislocation in valuation currently ascribed
to our company in relation to the value of the underlying real estate."
The company has also completed the sale of a minority joint venture
interest in a portfolio of owned assets to an institutional investor.
The joint venture transaction was completed on terms consistent with
those previously provided in the company's 2018 earnings guidance.
Additionally, the partnership originated $330 million of secured
mortgage debt at a coupon of 4.07 percent with the full principal
balance due at maturity in June 2028.
About American Campus Communities
American Campus Communities, Inc. is the largest owner, manager and
developer of high-quality student housing communities in the United
States. The company is a fully integrated, self-managed and
self-administered equity real estate investment trust (REIT) with
expertise in the design, finance, development, construction management
and operational management of student housing properties. As of March
31, 2018, American Campus Communities owned 171 student housing
properties containing approximately 104,800 beds. Including its owned
and third-party managed properties, ACC's total managed portfolio
consisted of 206 properties with approximately 134,400 beds. Visit www.americancampus.com.
Forward-Looking Statements
In addition to historical information, this press release contains
forward-looking statements under the applicable federal securities law.
These statements are based on management's current expectations and
assumptions regarding markets in which American Campus Communities, Inc.
operates, operational strategies, anticipated events and trends, the
economy, and other future conditions. Forward-looking statements are not
guarantees of future performance and involve certain risks and
uncertainties, which are difficult to predict.
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