Austin, Texas — American Campus Communities (ACC) has announced financial results for the fourth quarter and year ended December 31, 2021.
Fourth Quarter Results
The company reported a net income of $40.7 million or $0.29 per fully-diluted share, versus $24.8 million or $0.18 per fully diluted share in the fourth quarter 2020. ACC also increased funds from operations-modified (FFOM) per fully-diluted share by 27 percent to $0.75 or $105.4 million, versus $81.8 million or $0.59 during the same time last year.
The Austin-based company grew same-store net operating income (NOI) by 14.8 percent over the fourth quarter, as revenues increased 10.2 percent and operating expenses grew 4.1 percent. ACC also commenced three third-party on-campus development projects at Drexel University, Princeton University and the University of California, Irvine.
Subsequent to quarter end, the company also began a third-party development project on the Massachusetts Institute of Technology (MIT) campus. The four projects are anticipated to contribute fees of approximately $23.4 million.
ACC was also awarded a new public-private partnership development by the Purdue University Research Foundation during the fourth quarter of last year. The project is anticipated to be structured as a third-party development with the full scope, transaction structure, feasibility, fees and timing yet to be finalized.
The company also recapitalized a 45 percent minority interest in its eight-property Arizona State University (ASU) student housing portfolio by forming a joint venture with Harrison Street for the ownership of the portfolio through a two-phase closing, with total expected proceeds to the company of $551.3 million.
2021 in Review
For the full year, ACC reported a net income of $35.5 million or $0.24 per fully-diluted share, versus $72.8 million or $0.51 per fully-diluted share for the full year 2020, which included a $48.5 million gain on the sale of one property in 2020.
The company increased FFOM per fully-diluted share by 8.1 percent to $300.6 million or $2.14, versus $275.5 million and $1.98 for the full year 2020. ACC grew same store NOI by 5.2 percent over the year ended December 31, 2020, as revenues increased 5.1 percent and operating expenses increased 5.1 percent.
The company also delivered three phases of its 10-phase Flamingo Crossings Village, located near Walt Disney World Resort. Cumulatively, ACC has delivered 6,023 beds on schedule and within budget, despite the national labor shortage and widespread supply chain constraints. ACC expects the project to meet its original 2022 targeted yield, as anticipated prior to the pandemic.
“2021 was an outstanding year for ACC and our shareholders,” says American Campus Communities CEO Bill Bayless. “Our team’s successful execution, coupled with strong industry tailwinds, propelled our business to pre-pandemic levels a full year earlier than anticipated.”
“We significantly exceeded our fall lease-up expectations and generated NOI and FFOM per share growth above the high-end of our guidance,” Bayless continues. “Thanks to our long-term strategy and the accelerating momentum of our business, even after accounting for capital recycling activity and higher than anticipated 2021 earnings per share, we expect to achieve earnings per share growth in the range of 12 percent to 16 percent in 2022.”
Academic Year 2022-2023 Pre-Leasing Update
“As anticipated, industry-wide pre-leasing as compiled by AxioMetrics for January is progressing at a faster pace than this time last year and is tracking in a manner more consistent with the sector’s traditional pre-pandemic leasing velocity,” says Jennifer Beese, the company’s president and COO.
“Having successfully navigated the disruption caused by the pandemic, we are now targeting pre-pandemic occupancy levels and expect to produce attractive rent growth for the 2022-2023 academic year, with same store rental revenue growth of 3.2 percent to 4.6 percent for the fourth quarter of 2022 included in our annual guidance,” she says.