Austin, Texas — American Campus Communities (ACC) has reported fourth quarter and year-end 2020 financial results. In the fourth quarter, net income grew to $24.8 million versus $24.7 million in the fourth quarter of 2019. The company reported an FFOM of $81.8 million versus $99.4 million during the prior year. Same-store net operating income (NOI) decreased by 13.7 percent over fourth quarter 2019 as revenues decreased 9 percent and operating expenses decreased 2.1 percent.
During the fourth quarter, same-store revenues were impacted by approximately $6.1 million due to rent relief, waived fees, increased uncollectible accounts primarily associated with previous academic year leases and other COVID-19-related items. ACC also executed a predevelopment agreement for the previously announced University of California Berkeley Master Development project. The proposed 750-bed development is anticipated to be structured as an American Campus Equity transaction with delivery targeting fall 2024, although the full scope, transaction structure, feasibility, fees and timing have not been finalized.
For the full year in 2020, ACC reported a net income of $72.8 million versus $85 million for the full year of 2019. The company also reported FFOM of $275.5 million compared to $336.2 million in 2019. Same-store NOI decreased by 11.3 percent over the year ended December 31, 2019, as revenues decreased 7.8 percent and operating expenses decreased 3.3 percent. Same-store revenues were impacted by approximately $51.8 million due to rent relief, waived fees, lost revenues from summer camps and conference business, increased uncollectible accounts primarily associated with previous academic year leases and other COVID-19 related items.
In addition, due to the decrease in occupancy of the same-store portfolio for the 2020-2021 academic year, same-store revenues in the academic year were approximately $27.2 million below those anticipated prior to the impacts of COVID-19.
“2020 was a tale of two periods operationally,” says Bill Bayless, CEO of the Austin, Texas-based company. “The year began with financial results that exceeded expectations in each of the first three months of the year with pre-leasing tracking significantly ahead of the prior year’s pace, including rental rate growth above original expectations.”
“Beginning in March with the COVID-19 global pandemic affecting every aspect of our lives, we focused on ‘doing the right thing’ and following eight principle objectives we laid out at the beginning of the crisis,” continues Bayless. “As we look forward into 2021, the business fundamentals of the student housing industry continue to show signs of improvement. Thus far, we have signed 3,600 leases for spring 2021 move-ins — roughly 50 percent more than last year’s 2,400. We are also hearing incrementally positive news in terms of university planned fall 2021 in-person classes, as exemplified by the recent announcements of both the U-Cal and Cal State systems.”