American Campus Communities, Inc. (NYSE: ACC), the nation’s largest owner and manager of high-quality student housing properties, today provided an interim update in connection with REITweek 2021: Nareit’s Investor Conference, which begins June 8, 2021.
Flamingo Crossings Village Occupancy Update
American Campus Communities is currently under construction on Flamingo Crossings Village, a 10-phase, $615 million residential community for participants of the Disney College Program (“DCP”). In May 2021, Walt Disney World® Resort announced that it was recommencing the DCP in the summer of 2021 after temporarily suspending the program in 2020 due to the COVID-19 pandemic. Since commencing DCP leasing activities on May 27, approximately 1,650 participants have executed lease agreements to begin occupying Flamingo Crossings Village during the month of June 2021.
Five of the project’s 10 phases are scheduled to be delivered by July, representing 4,996 beds. The company is actively communicating with Walt Disney World Resort® management regarding the near-term timing and pace of occupancy. Based on current onboarding plans and COVID-protocols, the company anticipates occupancy of available beds to be at least 85 percent by the fall of 2021. Barring unforeseen future impacts related to the COVID-19 pandemic, the company expects the project to meet its original 2022 targeted yield, with stabilization occurring in May 2023, as initially anticipated prior to the pandemic.
Academic Year 2021-2022 Preleasing Update
“While we are very pleased with the recent progress at Disney, we remain focused on the Fall 2021 lease-up across our 68 university markets. Consistent with our comments last quarter, preleasing across the industry continues to lag behind the traditional pre-COVID pace. With regard to our portfolio, the preleasing deficit compared to the prior year continues to narrow, as universities and students transition back toward more normal activities in this unique environment. Since March 12, we continue to see our average weekly velocity of applications and leases run at approximately 2.5 times the same period last year, consistent with the volumes we noted on our last call,” said Bill Bayless, American Campus Communities CEO. “While there remains a significant amount of leasing to do before the next academic year begins, our velocity is tracking in-line with the broader industry, as represented by the ‘AxioMetrics 175,’ and our preleased percentage continues to outpace averages in the majority of our markets. As previously stated, we do not expect to fully return to historical occupancy levels for Academic Year 2021-2022. Rental rates for the preleasing we have completed to date remain slightly above prior year, however we are seeing pricing pressure in certain markets as operators become more aggressive with concessions or rate reductions. On our second quarter earnings call in late July, we expect to be in a position to provide a more meaningful leasing comparison to prior year and a range of projected occupancy levels for Fall 2021.”
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, 2021, American Campus Communities owned 166 student housing properties containing approximately 111,900 beds. Including its owned and third-party managed properties, ACC's total managed portfolio consisted of 207 properties with approximately 142,400 beds. Visit www.americancampus.com.
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. (the “company”) 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. These risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward looking-statements include those related to the COVID-19 pandemic, about which there are still many unknowns, including the duration of the pandemic and the extent of its impact, and those discussed in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2020 under the heading “Risk Factors” and under the heading “Business - Forward-looking Statements” and subsequent quarterly reports on Form 10-Q. We undertake no obligation to publicly update any forward-looking statements, including our preleasing activity or expected full year 2021 operating results, whether as a result of new information, future events, or otherwise.
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