Austin, Texas — American Campus Communities (ACC) has reported financial results for the first quarter of 2021 and provided an update on the company’s environmental initiatives.
First Quarter Operating Results
ACC’s revenue for the first quarter of 2021 totaled $232.7 million, down from $249.4 million during the first quarter of 2020. Operating income for the quarter totaled $46.4 million compared to $115.5 million last year, which included a $48.5 million gain from the disposition of one owned property. Excluding this gain, the decrease in revenue and operating income was primarily a reflection of the impact of COVID-19 on property occupancy for the 2020-2021 academic year.
The company’s net income for the first quarter of 2021 totaled $15.6 million or $0.11 per fully-diluted share, compared with a net income of $80.9 million or $0.58 per fully-diluted share during the same quarter in 2020. Funds from operations (FFO) for the first quarter totaled $81.2 million or $0.58 per fully-diluted share, as compared to $95.9 million or $0.69 per fully-diluted share for the same quarter in 2020.
Net operating income (NOI) for ACC’s same-store properties was $123.6 million in the first quarter, a decrease of 11 percent from $138.9 million in 2020. Same-store property revenues decreased by 6.4 percent and same-store property operating expenses increased by 0.5 percent. NOI for the company’s total owned portfolio decreased 11.3 percent to $124.5 million for the first quarter, down from $140.3 million during the comparable period in 2020.
2021-2022 Pre-Leasing Update
“As anticipated and consistent with our comments last quarter, we’ve begun to see an acceleration in weekly pre-leasing velocity compared to the prior year as we are now approximately one month into the period when leasing activity dramatically slowed at the beginning of the pandemic last year,” says Jennifer Beese, the Austin, Texas-based company’s COO.
“While there remains a significant amount of work to do before the next academic year begins, through March our pre-leasing velocity is tracking in-line with the broader industry, as represented by the ‘AxioMetrics 175’ markets,” she says. “More importantly, in the majority of our markets, our velocity continues to outpace market averages. Additionally, asking rental rates for our portfolio as a whole remain in-line or slightly above the levels seen during the prior year, and operators in most markets continue to be patient in terms of their pricing policies. We remain cautiously optimistic that we will experience increased occupancy levels this fall but do not expect to fully return to historical occupancy levels for the 2021-2022 academic year.”
Portfolio Update
In January, ACC completed its $54.4 million third phase of development for the Disney College Program in Orlando. Walt Disney World Resort has taken a phased approach to reopening due to COVID-19 restrictions, and is reviewing the timing for resuming the Disney College Program and the related occupancy of the project. Walt Disney World has assisted ACC in marketing and leasing the project to a broader rental market until its internship program resumes. To-date, the company has signed 148 leases. Construction is continuing on the remaining phases of the project, which are expected for completion as originally anticipated through 2023.
During the first quarter, ACC was awarded and began pre-development activities for a third-party on-campus project at Drexel University. The renovation of Kelly Hall, a 1960s-era community-bath residence hall, represents the company’s fifth public-private partnership (P3) project with Drexel University. ACC expects to earn $1.8 million in fees throughout the development period, although the full scope, feasibility, fees and timing have not been finalized. ACC also began construction on a third-party on-campus development project with Concordia University in Austin, Texas.
Environmental Initiative Update
ACC earned a Leadership in Energy and Environmental Design (LEED) platinum certification for LightView at Northeastern University in Boston. This is the company’s 38th completed or tracking LEED-certified project. In addition, the company completed its first greenhouse gas (GHG) emissions inventory to inform future target-setting and entered into renewable energy contracts at six communities for a projected 11.4 million kWh annually.
“We are committed to doing the right thing for the people and the planet,” says Bill Bayless, chief executive officer at ACC. “As we continue to navigate the challenging times this past year has brought everyone, we are looking forward to the brighter days ahead to continue to support our employees, residents, university partners and communities and drive long-term value for shareholders while delivering healthy, sustainable homes where students love living.”