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Bryan L. Goolsby Toni Weinstein Locke Liddell & Sapp LLP 2200 Ross Avenue, Suite 2200 Dallas, TX 75201 Telephone: (214) 740-8000 Facsimile: (214) 740-8800 | Edward F. Petrosky J. Gerard Cummins Sidley Austin Brown & Wood LLP 787 Seventh Avenue New York, NY 10019 Telephone: (212) 839-5300 Facsimile: (212) 839-5599 |
Proposed Maximum | Amount of | ||||||||
Title of Each Class of | Amount to Be | Aggregate | Registration | ||||||
Securities to Be Registered | Registered | Offering Price(1) | Fee(2) | ||||||
Common Stock, par value $.01 per share | 3,910,000 | $85,883,150 | $10,109 | ||||||
(1) | Estimated pursuant to Rule 457(c) of the Securities Act of 1933, as amended, based upon the average of the high and low sales prices of a share of common stock as reported on the New York Stock Exchange on June 17, 2005. |
(2) | A registration fee of $8,828 was previously paid in connection with the filing of the registration statement on June 6, 2005. A fee of $1,281 has been paid in connection with the filing of this Amendment No. 1. |
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The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. The prospectus is not an offer to sell the securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted. |
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• | As of March 31, 2005, our total consolidated indebtedness was approximately $309.4 million (excluding unamortized debt premiums). Our debt service obligations expose us to the risk of default and reduce (or eliminate) cash resources that are available to operate our business or pay distributions, including those necessary to maintain our REIT qualification. There is no limit on the amount of indebtedness that we may incur except as provided by the covenants in our revolving credit facility. | |
• | Our results of operations are subject to annual re-leasing, seasonality and other risks that are unique to the student housing industry. | |
• | We have been recently organized and have a limited operating history. Our management has limited experience in running a public company or in operating in accordance with the requirements for qualification as a REIT. | |
• | Provisions of our organizational documents limit the ownership of our shares. | |
• | If we fail to qualify as a REIT for federal income tax purposes, our distributions will not be deductible by us, reducing our cash available for distribution to our stockholders. | |
• | We may not be able to make distributions to our stockholders in the future, and we may make distributions that include a return of capital. |
Per Share | Total | |||||||
Public offering price | $ | $ | ||||||
Underwriting discount | $ | $ | ||||||
Proceeds, before expenses, to us | $ | $ |
Citigroup | Deutsche Bank Securities |
KeyBanc Capital Markets |
Wachovia Securities |
RBC Capital Markets |
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F-1 | ||||||||
Form of Underwriting Agreement | ||||||||
Opinion and Consent of Locke Liddell & Sapp LLP | ||||||||
Opinion and Consent of Locke Liddell & Sapp LLP | ||||||||
Consent of Ernst & Young LLP |
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Acquisitions |
Owned Development Activities |
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Amended Revolving Credit Facility |
Senior Management Restructuring |
• | James C. Hopke, Jr. rejoined our Company and was appointed as Executive Vice President and Chief Investment Officer; | |
• | Brian B. Nickel, our former Executive Vice President, Chief Investment Officer and Secretary, was appointed as Executive Vice President, Chief Financial Officer and Secretary; | |
• | Jonathan Graf, our former Vice President and Controller, was promoted to Senior Vice President, Chief Accounting Officer and Treasurer; | |
• | Greg A. Dowell, our former Senior Vice President and Chief of Operations, was promoted to Executive Vice President and Chief of Operations; and | |
• | Kim K. Voss, our former Assistant Controller, was promoted to Vice President and Controller. |
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• | Student housing is our core business. We have expertise in the unique and specialized aspects of the student housing industry and focus on student housing as our core business. We are a fully integrated organization, which is capable of conducting market analysis, administering the entitlement and municipal approval process, coordinating product design, securing financing, administering the development process and providing construction management, leasing and property management services. Since our inception in 1993, we have been one of the most active companies in the sector as we have been involved in the development, acquisition, ownership and/or management of more than 62 student housing properties containing more than 38,200 beds. | |
• | One of the industry’s most experienced teams. Collectively throughout their individual careers, the seven members of our senior management team have been involved in the development, acquisition or management of more than 114 student housing properties containing more than 73,500 beds at 78 colleges and universities. Our corporate team of student housing professionals have participated in every functional aspect of the ownership, acquisition, development and management of student housing. Six corporate employees at the level of Vice President or above, including our CEO, began their careers in student housing as resident assistants while in college, providing us with a comprehensive understanding of the operational aspects of the student housing business. We believe that this history of experience provides a base of knowledge that has facilitated building a company with substantial operating and development expertise in the student housing industry. | |
• | High quality student housing properties. As of March 31, 2005, our properties had an average age of only 4.7 years. Our properties are located in close proximity to, and in the case of our on-campus participating properties on the grounds of, major colleges and universities. Our typical units include private bedrooms, private or semi-private bathrooms, living rooms and full kitchens with modern appliances. Our properties typically offer extensive amenities and services, including swimming pools, basketball, sand volleyball and/or tennis courts and clubhouses with fitness centers, recreational rooms and computer labs, in an academically oriented environment that parents appreciate. Each of our properties is managed and cared for by our trained on-site staff— managers, maintenance, business personnel and resident assistants. | |
• | Extensive network of university and college relationships. This network provides us with acquisition, development and management opportunities. Our clients have included some the nation’s most prominent systems of higher education, including the State University of New York System, the University of California System, the Texas A&M University System, the Texas State University System, the University of Georgia System, the University of North Carolina System, the Purdue University System, the University of Colorado System and the Arizona State University System. | |
• | Industry innovators. With nearly $1 billion of development completed or in progress and in excess of $300 million of properties acquired over the last decade, we have led the industry in evolving student housing in the areas of product design concepts, site planning, unit plans and amenity offerings. We have also developed and implemented specialized student housing investment and operating systems and have created a proprietary lease administration and marketing software customized for student housing that enables us to quickly identify and respond to market changes and trends. |
• | Our results of operations are subject to an annual leasing cycle, short lease-up period, seasonal cash flows, changing university admission and housing policies and other risks inherent in the |
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student housing industry. We generally lease our owned properties under 12-month leases, and in certain cases, under ten-month, nine-month or shorter-term semester leases. As a result, we may experience significantly reduced cash flows during the summer months at properties leased under leases having terms shorter than 12 months. Furthermore, all of our properties must be entirely re-leased each year, exposing us to increased leasing risk. Student housing properties are also typically leased during a limited leasing season that usually begins in January and ends in August of each year. We are therefore highly dependent on the effectiveness of our marketing and leasing efforts and personnel during this season. | ||
• | We face significant competition from university-owned on-campus student housing, from other off-campus student housing properties and from traditional multifamily housing located within close proximity to universities. On-campus student housing has certain inherent advantages over off-campus student housing in terms of physical proximity to the university campus and integration of on-campus facilities into the academic community. Colleges and universities can generally avoid real estate taxes and borrow funds at lower interest rates than us and other private sector operators. We also compete with national and regional owner-operators of off-campus student housing in a number of markets as well as with smaller local owner-operators. | |
• | As of March 31, 2005, our total consolidated indebtedness was approximately $309.4 million (excluding unamortized debt premiums). Our debt service obligations expose us to the risk of default and reduce (or eliminate) cash resources that are available to operate our business or pay distributions, including those necessary to maintain our REIT qualification. There is no limit on the amount of indebtedness that we may incur except as provided by the covenants in our revolving credit facility. We expect to incur additional indebtedness under our revolving credit facility to fund future property development and acquisitions and other working capital needs, subject to certain conditions and the satisfaction of specified financial covenants. Our level of debt and the limitations imposed on us by our debt agreements could have significant adverse consequences. | |
• | Our future growth will be dependent upon our ability to successfully develop, acquire and manage new properties. As we develop and acquire additional properties, we will be subject to risks associated with managing new properties, including lease-up and integration risks. Newly developed and recently acquired properties may not perform as expected and newly acquired properties may have characteristics or deficiencies unknown to us at the time of acquisition. There can be no assurance that future acquisition and development opportunities will be available to us on terms that meet our investment criteria or that we will be successful in capitalizing on such opportunities. Our ability to capitalize on such opportunities will be largely dependent upon external sources of capital that may not be available to us on favorable terms, or at all. | |
• | We have been recently organized and have a limited operating history. In addition, all of our properties have been acquired or developed by us or our predecessors within the past nine years and have limited operating histories under current management. Our management has limited experience in running a public company or in operating in accordance with the requirements for qualification as a REIT. | |
• | Provisions of our charter limit the ownership of our shares. Our charter provides that, subject to certain exceptions, no person or entity may beneficially own, or be deemed to own by virtue of certain constructive ownership provisions, more than 9.8% (by value or by number of shares, whichever is more restrictive) of the outstanding shares of our common stock or more than 9.8% by value of all our outstanding shares, including both common and preferred stock. We refer to this restriction as our “ownership limit.” Our charter, however, requires exceptions to be made to this limitation if our board of directors determines that such exceptions will not jeopardize our tax status as a REIT. This ownership limit could delay, defer or prevent a change of control or other transaction that might involve a premium price for our common stock or otherwise be in the best interest of our stockholders. |
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• | In order to qualify as a REIT, we are required under the Internal Revenue Code of 1986, as amended, or the “Code,” to distribute annually at least 90% of our REIT taxable income, determined without regard to the dividends paid deduction and excluding any net capital gain. Our TRS, or “taxable REIT subsidiary,” may, in its discretion, retain any income it generates net of any tax liability it incurs on that income without affecting the 90% distribution requirements to which we are subject as a REIT. Net income of our TRS will be included in REIT taxable income, and will increase the amount required to be distributed, only if such amounts are paid out as a dividend by our TRS. In addition, we will be subject to income tax at regular corporate rates to the extent that we distribute less than 100% of our net taxable income, including any net capital gains. Because of these distribution requirements, we may not be able to fund future capital needs, including any necessary acquisition financing, from operating cash flow. Consequently, we will be compelled to rely on third party sources to fund our capital needs. We may not be able to obtain this financing on favorable terms or at all. Any additional indebtedness that we incur will increase our leverage. If we cannot obtain capital from third party sources, we may not be able to acquire or develop properties when strategic opportunities exist, satisfy our debt service obligations or make the cash distributions to our stockholders, including those necessary to qualify as a REIT. | |
• | To qualify as a REIT, we are required to comply with highly technical and complex provisions of the Code. Failure to qualify as a REIT would likely subject us to higher tax expenses and reduce or eliminate cash available for distribution to our stockholders. | |
• | The operations of our on-campus participating properties and our third party services are conducted through our TRS. The income from these operations is subject to regular federal income taxation and state and local income taxation where applicable, thus reducing the amount of cash available for distribution to our stockholders. | |
• | We may not be able to make distributions to our stockholders in the future, and we may make distributions that include a return of capital. |
• | developing and acquiring owned off-campus student housing communities that meet our focused investment criteria; | |
• | maximizing the profitability of our owned and third-party managed properties through proactive marketing, management and asset preservation strategies; and | |
• | continuing to grow our third-party development and management services businesses to generate cash flow and build our national reputation among colleges and universities. |
Follow a Disciplined Off-Campus Acquisition and Development Strategy |
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• | Proximity to campus | |
• | Unit mix compared to competition | |
• | Marketability of floor plans compared to competition | |
• | Quality and marketability of amenity offering compared to competition | |
• | Total housing cost to residents compared to each direct competitor | |
• | Age of the structure | |
• | Quality of construction and impact related to ongoing capital expenditures | |
• | Quality of furniture, fixtures and equipment and impact on ongoing capital expenditures | |
• | Condition and extraordinary cost impacts related to mechanical and physical plant systems | |
• | Operational and marketing inefficiencies and identification of areas for improvement | |
• | Internet, communications and entertainment features incorporated into the structure | |
• | Reputation of the property and competitor properties among students and key university offices |
• | Size of college or university | |
• | Enrollment characteristics and growth projections | |
• | Percent of students housed on-campus | |
• | On-campus housing requirements and policies | |
• | On-campus housing products and pricing | |
• | Development plans for future housing | |
• | University’s admission policy and expected changes to such policies | |
• | Presence of university services/programs that enable establishing formal relationships |
• | Fundamentals of the overall local housing market | |
• | Fundamentals of student housing submarkets | |
• | Nature of direct competitors and their product offering | |
• | Impact of greater housing market on each student housing submarket | |
• | Barriers to entry in each student housing submarket | |
• | Student preferences related to each student housing submarket | |
• | Planned or potential future student housing development |
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Maximize Property-Level Profitability |
• | establishing internal controls and procedures for cost control consistently throughout our communities; | |
• | appropriately staffing our properties at the site-level, minimizing multiple layers of management and increasing effectiveness; | |
• | negotiating utility and service-level pricing arrangements with national and regional vendors and requiring corporate-level approval of service agreements for each community; and | |
• | conducting analysis of the costs and effectiveness of each of our marketing programs via our proprietary LAMS system. |
Utilize our Proprietary Marketing Systems |
• | a fully integrated prospect tracking and follow-up system. Prospect information from all types of inquiries—walk-in, telephone, web site/email, or fax—is recorded and entered into the LAMS database, and an aggressive, fully-automated follow-up and tracking program is then implemented, with LAMS generating follow-up labels and electronic communications and disseminating marketing messages. | |
• | a built-in marketing effectiveness program to measure the success of our marketing efforts on a real time basis. LAMS generates a weekly traffic analysis that shows the quantity of each type of inquiry received for that period as well as the marketing medium that generated each piece of traffic. In addition, LAMS generates a period-to-period comparative traffic and leasing analysis that allows us to compare the pace of the current year’s traffic and leasing activity to that of previous years. This enables us to track the effectiveness of each marketing program being utilized and to respond accordingly. | |
• | a real-time monitor of lease closings and leasing terms. LAMS automatically generates closing reports allowing us to measure the staff’s closing ratios. The closing ratios are calculated by LAMS on an individual basis so that we may better evaluate performance and optimize our staffing. LAMS generates application and leasing status reports that detail the current period and year-to-date status of applications and leasing broken down by type of accommodation. This enables us to quickly identify potential problems related to pricing and/or desirability of our various types of accommodations and to respond accordingly. |
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• | an automated lease generation system. Each property’s lease term and rental rate information is set up in LAMS by authorized corporate staff. This enables the corporate office to maintain tight controls on pricing changes and special promotions. LAMS generates each resident lease, eliminating the potential for manual errors of our on-site staff. |
Year | Primary | Occupancy | ||||||||||||||||||||
Acquired/ | University | Rates | ||||||||||||||||||||
Property | Developed | Location | Served | (1) | Units | Beds | ||||||||||||||||
Off-campus properties: | ||||||||||||||||||||||
1. Commons On Apache | 1999 | Tempe, AZ | Arizona State University Main Campus | 100.0 | % | 111 | 444 | |||||||||||||||
2. The Village at Blacksburg | 2000 | Blacksburg, VA | Virginia Polytechnic Institute and State University | 98.6 | % | 288 | 1,056 | |||||||||||||||
3. The Village on University | 1999 | Tempe, AZ | Arizona State University Main Campus | 99.1 | % | 288 | 918 | |||||||||||||||
4. River Club Apartments | 1999 | Athens, GA | The University of Georgia— Athens | 95.5 | % | 266 | 794 | |||||||||||||||
5. River Walk Townhomes | 1999 | Athens, GA | The University of Georgia— Athens | 97.1 | % | 100 | 340 | |||||||||||||||
6. The Callaway House(2) | 2001 | College Station, TX | Texas A&M University | 101.3 | % | 173 | 538 | |||||||||||||||
7. The Village at Alafaya Club | 2000 | Orlando, FL | The University of Central Florida | 97.4 | % | 228 | 840 | |||||||||||||||
8. The Village at Science Drive | 2001 | Orlando, FL | The University of Central Florida | 99.3 | % | 192 | 732 | |||||||||||||||
9. University Village at Boulder Creek | 2002 | Boulder, CO | The University of Colorado at Boulder | 87.7 | % | 82 | 309 | |||||||||||||||
10. University Village at Fresno | 2004 | Fresno, CA | California State University, Fresno | 98.8 | % | 105 | 406 | |||||||||||||||
11. University Village at TU | 2004 | Philadelphia, PA | Temple University | 98.8 | % | 220 | 749 | |||||||||||||||
12. University Village at Sweet Home(3) | 2005 | Amherst, NY | State University of New York— Buffalo | — | 269 | 828 | ||||||||||||||||
13. University Club Tallahassee | 2005 | Tallahassee, FL | Florida State University | 93.4 | % | 152 | 608 | |||||||||||||||
14. The Grove at University Club | 2005 | Tallahassee, FL | Florida State University | 98.4 | % | 64 | 128 | |||||||||||||||
15. College Club Tallahassee | 2005 | Tallahassee, FL | Florida A&M University | 92.4 | % | 96 | 384 |
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Year | Primary | Occupancy | ||||||||||||||||||||
Acquired/ | University | Rates | ||||||||||||||||||||
Property | Developed | Location | Served | (1) | Units | Beds | ||||||||||||||||
16. The Greens at College Club | 2005 | Tallahassee, FL | Florida A&M University | 96.9 | % | 40 | 160 | |||||||||||||||
17. University Club Gainesville | 2005 | Gainesville, FL | University of Florida | 98.9 | % | 94 | 376 | |||||||||||||||
18. City Parc at Fry Street | 2005 | Denton, TX | University of North Texas | 94.7 | % | 136 | 418 | |||||||||||||||
19. Exchange at Gainesville (to be renamed) | 2005 | Gainesville, FL | University of Florida | 95.6 | % | 396 | 1,044 | |||||||||||||||
Total off-campus properties | 97.2 | % | 3,300 | 11,072 | ||||||||||||||||||
On-campus participating properties: | ||||||||||||||||||||||
20. University Village—PVAMU | 1996/ 97/98 | Prairie View, TX | Prairie View A&M University | 93.0 | % | 612 | 1,920 | |||||||||||||||
21. University College—PVAMU | 2000/ 2003 | Prairie View, TX | Prairie View A&M University | 95.0 | % | 756 | 1,470 | |||||||||||||||
22. University Village—TAMIU | 1997 | Laredo, TX | Texas A&M International University | 70.2 | % | 84 | 252 | |||||||||||||||
23. Cullen Oaks Phase I | 2001 | Houston, TX | The University of Houston | 99.6 | % | 231 | 525 | |||||||||||||||
24. Cullen Oaks Phase II(3) | 2005 | Houston, TX | The University of Houston | — | 180 | 354 | ||||||||||||||||
Total on-campus participating properties | 93.1 | % | 1,863 | 4,521 | ||||||||||||||||||
Total—all properties | 96.0 | % | 5,163 | 15,593 | ||||||||||||||||||
(1) | Occupancy rates are calculated as of March 31, 2005. Occupancy is based on the number of total occupied beds (including beds occupied by staff) divided by total beds. |
(2) | Also has a food service facility. |
(3) | Currently under development with a scheduled completion date of August 2005. |
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Applications | % of | Applications | |||||||||||||||||||||||||||
and Leases | Rentable | and Leases | Variance to | ||||||||||||||||||||||||||
as of | Beds as of | as of | Prior Year | Total | |||||||||||||||||||||||||
May 27, | May 27, | May 28, | Rentable | Design | |||||||||||||||||||||||||
Applications and Leases | 2005 | 2005 | 2004 | Beds | % | Beds(1) | Beds | ||||||||||||||||||||||
Commons of Apache | 444 | 100.0% | 444 | 0 | 0.0 | % | 444 | 444 | |||||||||||||||||||||
The Village at Blacksburg | 1,034 | 98.7% | 1,030 | 4 | 0.4 | % | 1,048 | 1,056 | |||||||||||||||||||||
The Village on University | 515 | 56.7% | 656 | (141 | ) | (21.5 | )% | 909 | 918 | ||||||||||||||||||||
River Club Apartments | 719 | 92.8% | 543 | 176 | 32.4 | % | 775 | 794 | |||||||||||||||||||||
River Walk Townhomes | 296 | 88.9% | 316 | (20 | ) | (6.3 | )% | 333 | 340 | ||||||||||||||||||||
The Callaway House | 642 | 121.8% | 569 | 73 | 12.8 | % | 527 | 538 | |||||||||||||||||||||
The Village at Alafaya Club | 581 | 70.1% | 586 | (5 | ) | (0.9 | )% | 829 | 840 | ||||||||||||||||||||
The Village at Science Drive | 717 | 99.3% | 718 | (1 | ) | (0.1 | )% | 722 | 732 | ||||||||||||||||||||
University Village at Boulder Creek | 168 | 56.2% | 218 | (50 | ) | (22.9 | )% | 299 | 309 | ||||||||||||||||||||
University Village Fresno | 336 | 84.8% | 218 | 118 | 54.1 | % | 396 | 406 | |||||||||||||||||||||
University Village at TU | 728 | 99.3% | 734 | (6 | ) | (0.8 | )% | 733 | 749 | ||||||||||||||||||||
University Village at Sweet Home | 835 | 102.2% | n/a | n/a | n/a | 817 | 828 | ||||||||||||||||||||||
University Club Tallahassee(2) | 744 | 102.5% | n/a | n/a | n/a | 726 | 736 | ||||||||||||||||||||||
College Club Tallahassee(3) | 392 | 73.1% | n/a | n/a | n/a | 536 | 544 | ||||||||||||||||||||||
University Club Gainesville | 267 | 71.8% | n/a | n/a | n/a | 372 | 376 | ||||||||||||||||||||||
City Parc at Fry Street | 196 | 47.6% | n/a | n/a | n/a | 412 | 418 | ||||||||||||||||||||||
Exchange at Gainesville (to be renamed) | 949 | 92.0% | n/a | n/a | n/a | 1,032 | 1,044 | ||||||||||||||||||||||
Total | 10,910 | 11,072 | |||||||||||||||||||||||||||
(1) | Rentable Beds exclude beds needed for on-site staff and/or model units. |
(2) | For lease administration purposes, University Club Tallahassee and the Grove at University Club are reported combined. |
(3) | For lease administration purposes, College Club Tallahassee and the Greens at College Club are reported combined. |
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![LOGO](https://capedge.com/proxy/S-11A/0000950134-05-012274/d26006a1d2600604.gif)
(1) | Includes a 0.1% interest held by American Campus Communities Holdings LLC, which is the general partner of our Operating Partnership. |
(2) | Profits interest units, or PIUs, represent limited partnership interests in the Operating Partnership, which, upon consummation of the Offering, will become ordinary units exchangeable for cash or, at the option of the Operating Partnership, for shares of our common stock on a one-for-one basis. |
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• | the development and management service operations and real estate operations of American Campus Communities, L.L.C. (one of the Predecessor Entities); | |
• | the real estate operations of RAP Student Housing Properties, L.L.C. (“RAP SHP”) and its subsidiaries (including The Village at Riverside, which we ceased owning after the completion of the IPO, and Coyote Village, which was transferred to Weatherford College in April 2004); and | |
• | the joint venture properties and operations of American Campus–Titan, LLC and American Campus–Titan II, LLC. |
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Three Months Ended March 31, | Years Ended December 31, | ||||||||||||||||||||||||||||
Historical | Historical | ||||||||||||||||||||||||||||
Pro Forma | Pro Forma | ||||||||||||||||||||||||||||
2005 | 2004 | 2005 | 2004 | 2003 | 2002 | 2004 | |||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||
Revenues | $ | 19,541 | $ | 15,352 | $ | 22,325 | $ | 60,823 | $ | 57,136 | $ | 52,131 | $ | 76,623 | |||||||||||||||
Income (loss) from continuing operations | 2,311 | 1,585 | 2,646 | (1,572 | ) | (967 | ) | (2,753 | ) | (1,785 | ) | ||||||||||||||||||
Discontinued operations: | |||||||||||||||||||||||||||||
(Loss) income attributable to discontinued operations | (2 | ) | (55 | ) | 272 | 7 | 319 | ||||||||||||||||||||||
Gain (loss) from disposition of real estate | 5,883 | — | (39 | ) | 16 | 295 | |||||||||||||||||||||||
Net income (loss) | 8,192 | 1,530 | (1,339 | ) | (944 | ) | (2,139 | ) | |||||||||||||||||||||
Per share and distribution data:(1) | |||||||||||||||||||||||||||||
Income per diluted share: | |||||||||||||||||||||||||||||
Income from continuing operations | $ | 0.19 | $ | 0.21 | $ | 0.10 | $ | (.14 | ) | ||||||||||||||||||||
Discontinued operations | 0.46 | 0.05 | |||||||||||||||||||||||||||
Net income | $ | 0.65 | $ | 0.15 | |||||||||||||||||||||||||
Cash distributions declared per share/unit | 0.3375 | 0.1651 | |||||||||||||||||||||||||||
Cash distributions declared | 4,277 | 2,104 |
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As of | As of December 31, | ||||||||||||||||
March 31, | |||||||||||||||||
2005 | 2004 | 2003 | 2002 | ||||||||||||||
(Unaudited) | |||||||||||||||||
Total assets | $ | 486,487 | $ | 367,628 | $ | 330,566 | $ | 307,658 | |||||||||
Debt | 314,385 | 201,014 | 267,518 | 249,706 | |||||||||||||
Stockholders’ and Predecessor Entities owners’ equity(2) | 141,380 | 138,229 | 27,658 | 35,526 | |||||||||||||
Selected Owned Property Information: | |||||||||||||||||
Owned properties | 24 | 18 | 14 | 14 | |||||||||||||
Units | 5,163 | 4,317 | 3,567 | 3,459 | |||||||||||||
Beds | 15,593 | 12,955 | 10,546 | 10,336 | |||||||||||||
Occupancy | 96.0 | % | 97.1 | % | 91.5 | % | 91.0 | % |
Three Months Ended | |||||||||||||||||||||
March 31, | Years Ended December 31, | ||||||||||||||||||||
2005 | 2004 | 2004 | 2003 | 2002 | |||||||||||||||||
(Unaudited) | |||||||||||||||||||||
Net cash provided by operating activities | $ | 5,713 | $ | 5,237 | $ | 17,293 | $ | 6,862 | $ | 7,647 | |||||||||||
Net cash used in investing activities | (58,853 | ) | (19,213 | ) | (63,621 | ) | (33,738 | ) | (21,678 | ) | |||||||||||
Net cash provided by financing activities | 55,515 | 13,004 | 45,151 | 21,537 | 11,646 | ||||||||||||||||
Funds from operations (“FFO”): | |||||||||||||||||||||
Net income (loss) | $ | 8,192 | $ | 1,530 | $ | (1,339 | ) | $ | (944 | ) | $ | (2,139 | ) | ||||||||
Minority interests | 87 | (21 | ) | (100 | ) | (16 | ) | (30 | ) | ||||||||||||
(Gain) loss from disposition of real estate | (5,883 | ) | — | 39 | (16 | ) | (295 | ) | |||||||||||||
Real estate related depreciation and amortization | 3,326 | 2,277 | 10,009 | 8,937 | 8,233 | ||||||||||||||||
Funds from operations(3)(4) | $ | 5,722 | $ | 3,786 | $ | 8,609 | $ | 7,961 | $ | 5,769 | |||||||||||
(1) | Represents per share information and cash distributions declared during the period from August 17, 2004 through March 31, 2005. |
(2) | Information as of March 31, 2005 and December 31, 2004 reflects our stockholders’ equity as a result of the IPO while previous years reflect the equity of the owners of our Predecessor Entities. |
(3) | As defined by the National Association of Real Estate Investment Trusts or NAREIT, funds from operations or FFO represents income (loss) before allocation to minority interest (computed in accordance with GAAP), excluding gains (or losses) from sales of property, plus real estate related depreciation and amortization (excluding amortization of loan origination costs) and after adjustments for unconsolidated partnerships and joint ventures. We present FFO because we consider it an important supplemental measure of our operating performance and believe it is frequently used by securities analysts, investors and other interested parties in the evaluation of REITs, many of which present FFO when reporting their results. FFO is intended to exclude GAAP historical cost depreciation and amortization of real estate and related assets, which assumes that the value of real estate diminishes ratably over time. Historically, however, real estate values have risen or fallen with market conditions. Because FFO excludes depreciation and amortization unique to real estate, gains and losses from property dispositions and extraordinary items, it provides a performance measure that, when compared year over year, reflects the impact to operations from trends in occupancy rates, rental rates, operating costs, development activities and interest costs, providing perspective not immediately apparent from net income. |
We compute FFO in accordance with standards established by the Board of Governors of NAREIT in its March 1995 White Paper (as amended in November 1999 and April 2002), which may differ from the methodology for calculating FFO utilized by other equity REITs and, accordingly, may not be comparable to such other REITs. Further, FFO does not represent amounts available for management’s discretionary use because of needed capital replacement or expansion, debt service obligations or other commitments and uncertainties. FFO should not be considered as an alternative to net income (loss) (computed in accordance with GAAP) as an indicator of our financial performance or to cash flow from operating activities (computed in accordance with GAAP) as an |
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indicator of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to pay dividends or make distributions. |
(4) | When considering our FFO, we believe it is also a meaningful measure of our performance to exclude certain revenues and expenses from our on-campus participating properties. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations— Funds from Operations.” |
Common stock offered by us | 3,400,000 shares(1) | |
Common stock to be outstanding after this Offering | 16,015,000 shares(1) | |
Common stock and Operating Partnership units to be outstanding after this Offering | 16,136,000 shares/units(1)(2) | |
Use of proceeds | We intend to use the net proceeds from this Offering to fund the acquisition and development of student housing properties. In the interim, we intend to use $50.2 million to repay the outstanding balance of our revolving credit facility and the remaining $19.0 million for working capital and general corporate purposes. | |
New York Stock Exchange symbol | “ACC” |
(1) | Excludes 510,000 shares issuable upon exercise of the underwriters’ overallotment option, 653,345 shares available for future issuance under our 2004 incentive award plan and the following shares issued under our 2004 incentive award plan: |
• | 14,375 shares underlying restricted stock units granted to non-employee directors; | |
• | 53,598 restricted stock awards granted to employees; | |
• | 367,682 shares underlying an outperformance bonus plan for key employees; and | |
• | 121,000 PIUs described in Note 2 below. |
(2) | Includes 121,000 PIUs issued by us to certain of our current and former key employees. Upon the consummation of this Offering, all of the PIUs will become ordinary units exchangeable for cash or, at the option of the Operating Partnership, for shares of our common stock on a one-for-one basis. |
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Our results of operations are subject to an annual leasing cycle, short lease-up period, seasonal cash flows, changing university admission and housing policies and other risks inherent in the student housing industry. |
We face significant competition from university-owned on-campus student housing, from other off-campus student housing properties and from traditional multifamily housing located within close proximity to universities. |
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We may be unable to successfully complete and operate our properties or our third party developed properties. |
• | We may be unable to obtain construction financing on favorable terms or at all. | |
• | We may be unable to obtain permanent financing on favorable terms or at all if we finance development projects through construction loans. | |
• | We may not complete development projects on schedule, within budgeted amounts or in conformity with building plans and specifications, including our four current properties under development. | |
• | We may encounter delays or refusals in obtaining all necessary zoning, land use, building, occupancy and other required governmental permits and authorizations. | |
• | Occupancy and rental rates at newly developed or renovated properties may fluctuate depending on a number of factors, including market and economic conditions, and may reduce or eliminate our return on investment. | |
• | We may become liable for injuries and accidents occurring during the construction process and for environmental liabilities, including off-site disposal of construction materials. | |
• | We may decide to abandon our development efforts if we determine that continuing the project would not be in our best interests. | |
• | We may encounter strikes, weather, government regulations and other conditions beyond our control. |
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We may be unable to successfully acquire properties on favorable terms. |
• | Potential inability to acquire a desired property may be caused by competition from other real estate investors. | |
• | Competition from other potential acquirers may significantly increase the purchase price. | |
• | We may be unable to finance an acquisition on favorable terms or at all. | |
• | We may have to incur significant capital expenditures to improve or renovate acquired properties. | |
• | We may be unable to quickly and efficiently integrate new acquisitions, particularly acquisitions of portfolios of properties, into our existing operations. | |
• | Market conditions may result in higher than expected costs and vacancy rates and lower than expected rental rates. | |
• | We may acquire properties subject to liabilities but without any recourse, or with only limited recourse, to the sellers, or with liabilities that are unknown to us, such as liabilities for clean-up of undisclosed environmental contamination, claims by tenants, vendors or other persons dealing with the former owners of our properties and claims for indemnification by members, directors, officers and others indemnified by the former owners of our properties. |
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Our debt level reduces cash available for distribution and may expose us to the risk of default under our debt obligations. |
• | We may be unable to borrow additional funds as needed or on favorable terms. | |
• | We may be unable to refinance our indebtedness at maturity or the refinancing terms may be less favorable than the terms of our original indebtedness. | |
• | We may be forced to dispose of one or more of our properties, possibly on disadvantageous terms. | |
• | We may default on our payment or other obligations as a result of insufficient cash flow or otherwise, which may result in a cross-default on our other obligations, and the lenders or mortgagees may foreclose on our properties that secure their loans and receive an assignment of rents and leases. | |
• | Foreclosures could create taxable income without accompanying cash proceeds, a circumstance that could hinder our ability to meet the REIT distribution requirements imposed by the Code. |
We may not be able to recover pre-development costs for university developments. |
Our awarded projects may not be successfully structured or financed and may delay our recognition of revenues. |
Two of our properties are under construction, and we may encounter delays in completion or experience cost overruns. |
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Our guarantees could result in liabilities in excess of our development fees. |
Universities have the right to terminate our participating ground leases. |
We have a significant presence on a single university campus. |
Our performance and value are subject to risks associated with real estate assets and with the real estate industry. |
• | general economic conditions; | |
• | rising level of interest rates; | |
• | local oversupply, increased competition or reduction in demand for student housing; | |
• | inability to collect rent from tenants; | |
• | vacancies or our inability to rent space on favorable terms; | |
• | inability to finance property development and acquisitions on favorable terms; | |
• | increased operating costs, including insurance premiums, utilities, and real estate taxes; |
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• | costs of complying with changes in governmental regulations; | |
• | the relative illiquidity of real estate investments; | |
• | decreases in student enrollment at particular colleges and universities; | |
• | changes in university policies related to admissions; and | |
• | changing student demographics. |
Potential losses may not be covered by insurance. |
Unionization or work stoppages could have an adverse effect on us. |
We could incur significant costs related to government regulation and private litigation over environmental matters. |
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Existing conditions at some of our properties may expose us to liability related to environmental matters. |
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We may incur environmental liabilities. |
We may incur significant costs complying with the Americans with Disabilities Act and similar laws. |
We may incur significant costs complying with other regulations. |
Joint venture investments could be adversely affected by our lack of sole decision-making authority, our reliance on co-venturers’ financial condition and disputes between our co-venturers and us. |
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We are recently organized and have a limited operating history. |
To qualify as a REIT, we may be forced to limit the activities of our TRS. |
Failure to qualify as a REIT would have significant adverse consequences to us and the value of our stock. |
• | we would not be allowed a deduction for dividends to stockholders in computing our taxable income and such amounts would be subject to federal income tax at regular corporate rates; | |
• | we also could be subject to the federal alternative minimum tax and possibly increased state and local taxes; and |
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• | unless we are entitled to relief under applicable statutory provisions, we could not elect to be taxed as a REIT for four taxable years following the year during which we were disqualified. |
To qualify as a REIT, we may be forced to borrow funds on a short-term basis during unfavorable market conditions. |
• | general market conditions; | |
• | our current debt levels and the number of properties subject to encumbrances; | |
• | our current performance and the market’s perception of our growth potential; | |
• | our cash flow and cash dividends; and | |
• | the market price per share of our common stock. |
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Our charter contains restrictions on the ownership and transfer of our stock. |
Certain tax and anti-takeover provisions of our charter and bylaws may inhibit a change of our control. |
• | the REIT ownership limit described above; | |
• | authorization of the issuance of our preferred shares with powers, preferences or rights to be determined by our board of directors; | |
• | the right of our board of directors, without a stockholder vote, to increase our authorized shares and classify or reclassify unissued shares; | |
• | advance-notice requirements for stockholder nomination of directors and for other proposals to be presented to stockholder meetings; and | |
• | the requirement that a majority vote of the holders of common stock is needed to remove a member of our board of directors for “cause.” |
The Maryland business statutes also impose potential restrictions on a change of control of our company. |
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We have the right to change some of our policies that may be important to our stockholders without stockholder consent. |
Our rights and the rights of our stockholders to take action against our directors and officers are limited. |
Our success depends on key personnel whose continued service is not guaranteed. |
The majority of our management have limited experience operating a REIT or a public company. |
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In addition to the underwriting discounts to be received by Citigroup Global Markets Inc., Deutsche Bank Securities Inc., J.P. Morgan Securities Inc. and KeyBanc Capital Markets, a division of McDonald Investments Inc., their affiliates will receive benefits from this Offering. |
We may not be able to make distributions to our stockholders in the future. |
Our distributions will not be eligible for the recent lower tax rate on dividends except in limited situations. |
The public offering price of our common stock in this Offering may not be indicative of the market price of our common stock after this Offering and our stock price may be volatile. |
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Certain members of our senior management will receive an economic benefit from this Offering. |
Market interest rates may have an effect on the value of our common stock. |
The number of shares available for future sale could adversely affect the market price of our common stock. |
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• | changing university admission and housing policies; | |
• | adverse economic or real estate developments; | |
• | general economic conditions; | |
• | future terrorist attacks in the U.S. or hostilities involving the U.S.; | |
• | defaults on or non-renewal of leases by student-tenants; | |
• | increased interest rates and operating costs; | |
• | debt levels and property encumbrances; | |
• | our failure to obtain necessary third party financing; | |
• | decreased rental rates or increased vacancy rates resulting from competition or otherwise; | |
• | difficulties in identifying properties to acquire and completing acquisitions; | |
• | our failure to successfully operate acquired properties and operations; | |
• | our failure to successfully develop properties in a timely manner; | |
• | our failure to maintain our status as a REIT; | |
• | environmental costs, uncertainties and risks, especially those related to natural disasters; | |
• | financial market fluctuations; and | |
• | changes in real estate and zoning laws and increases in real property tax rates. |
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High | Low | |||||||
2004 | ||||||||
Third quarter (August 17 through September 30) | $ | 19.05 | $ | 17.00 | ||||
Fourth quarter | 23.06 | 18.50 | ||||||
2005 | ||||||||
First quarter | $ | 22.75 | $ | 19.09 | ||||
Second quarter (through June 17) | 22.45 | 19.04 |
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(in thousands) | ||||||||||
As of March 31, 2005 | ||||||||||
Actual | Pro Forma | |||||||||
(Unaudited) | ||||||||||
Cash and cash equivalents | $ | 6,425 | $ | 42,038 | ||||||
Debt: | ||||||||||
Revolving credit facility | $ | 33,600 | $ | — | ||||||
Mortgage, loans and bonds payable | 275,829 | 275,829 | ||||||||
Unamortized debt premiums | 4,956 | 4,956 | ||||||||
Total debt | 314,385 | 280,785 | ||||||||
Minority interests | 2,649 | 2,649 | ||||||||
Stockholders’ Equity: | ||||||||||
Common stock, $.01 par value, 800,000,000 shares authorized, 12,615,000 shares issued and outstanding actual, 16,015,000 shares issued and outstanding pro forma | 126 | 160 | ||||||||
Additional paid-in capital | 135,150 | 204,329 | ||||||||
Accumulated earnings and distributions | 5,717 | 5,717 | ||||||||
Accumulated other comprehensive income | 387 | 387 | ||||||||
Total stockholders’ equity | 141,380 | 210,593 | ||||||||
Total capitalization | $ | 458,414 | $ | 494,027 | ||||||
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• | the development and management service operations and real estate operations of American Campus Communities, L.L.C., one of the Predecessor Entities; | |
• | the real estate operations of RAP SHP and its subsidiaries, including The Village at Riverside, which we ceased owning after the completion of the IPO, and Coyote Village, which was transferred to Weatherford College in April 2004; and | |
• | the joint venture properties and operations of American Campus– Titan, LLC and American Campus– Titan II, LLC. |
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(in thousands, except share and per share data) | |||||||||||||||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||||||||||||||
March 31, | Years Ended December 31, | ||||||||||||||||||||||||||||||||||||
Historical | Historical | ||||||||||||||||||||||||||||||||||||
Pro Forma | Pro Forma | ||||||||||||||||||||||||||||||||||||
2005 | 2004 | 2005 | 2004 | 2003 | 2002 | 2001 | 2000 | 2004 | |||||||||||||||||||||||||||||
(Unaudited) | (Unaudited) | ||||||||||||||||||||||||||||||||||||
Revenues | $ | 19,541 | $ | 15,352 | $ | 22,325 | $ | 60,823 | $ | 57,136 | $ | 52,131 | $ | 40,752 | $ | 25,126 | $ | 76,623 | |||||||||||||||||||
Income (loss) from continuing operations | 2,311 | 1,585 | 2,646 | (1,572 | ) | (967 | ) | (2,753 | ) | (3,300 | ) | (1,869 | ) | (1,785 | ) | ||||||||||||||||||||||
Discontinued operations: | |||||||||||||||||||||||||||||||||||||
(Loss) income attributable to discontinued operations | (2 | ) | (55 | ) | 272 | 7 | 319 | 361 | (3 | ) | |||||||||||||||||||||||||||
Gain (loss) from disposition of real estate | 5,883 | — | (39 | ) | 16 | 295 | — | — | |||||||||||||||||||||||||||||
Net income (loss) | 8,192 | 1,530 | (1,339 | ) | (944 | ) | (2,139 | ) | (2,939 | ) | (1,872 | ) | |||||||||||||||||||||||||
Per Share and Distribution Data:(1) | |||||||||||||||||||||||||||||||||||||
Income per diluted share: | |||||||||||||||||||||||||||||||||||||
Income from continuing operations | $ | 0.19 | $ | 0.21 | $ | 0.10 | $ | (.14 | ) | ||||||||||||||||||||||||||||
Discontinued operations | 0.46 | 0.05 | |||||||||||||||||||||||||||||||||||
Net income | $ | 0.65 | $ | 0.15 | |||||||||||||||||||||||||||||||||
Cash distributions declared per share/unit | 0.3375 | 0.1651 | |||||||||||||||||||||||||||||||||||
Cash distributions declared | 4,277 | 2,104 |
(in thousands) | |||||||||||||||||||||||||
As of | As of December 31, | ||||||||||||||||||||||||
March 31, | |||||||||||||||||||||||||
2005 | 2004 | 2003 | 2002 | 2001 | 2000 | ||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||
Total assets | $ | 486,487 | $ | 367,628 | $ | 330,566 | $ | 307,658 | $ | 295,637 | $ | 217,151 | |||||||||||||
Debt | 314,385 | 201,014 | 267,518 | 249,706 | 234,449 | 178,442 | |||||||||||||||||||
Stockholders’ and Predecessor entities owners’ equity(2) | 141,380 | 138,229 | 27,658 | 35,526 | 40,572 | 25,609 | |||||||||||||||||||
Selected Owned Property Information: | |||||||||||||||||||||||||
Owned properties | 24 | 18 | 14 | 14 | 13 | 10 | |||||||||||||||||||
Units | 5,163 | 4,317 | 3,567 | 3,459 | 3,377 | 2,781 | |||||||||||||||||||
Beds | 15,593 | 12,955 | 10,546 | 10,336 | 10,027 | 8,232 | |||||||||||||||||||
Occupancy | 96.0 | % | 97.1 | % | 91.5 | % | 91.0 | % | 93.5 | % | 93.3 | % |
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(in thousands) | |||||||||||||||||||||||||||||
Three Months | |||||||||||||||||||||||||||||
Ended | |||||||||||||||||||||||||||||
March 31, | Years Ended December 31, | ||||||||||||||||||||||||||||
2005 | 2004 | 2004 | 2003 | 2002 | 2001 | 2000 | |||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||
Cash Flow Information: | |||||||||||||||||||||||||||||
Net cash provided by operating activities | $ | 5,713 | $ | 5,237 | $ | 17,293 | $ | 6,862 | $ | 7,647 | $ | 5,338 | $ | 3,577 | |||||||||||||||
Net cash used in investing activities | (58,853 | ) | (19,213 | ) | (63,621 | ) | (33,738 | ) | (21,678 | ) | (68,540 | ) | (87,652 | ) | |||||||||||||||
Net cash provided by financing activities | 55,515 | 13,004 | 45,151 | 21,537 | 11,646 | 72,832 | 84,215 | ||||||||||||||||||||||
Funds From Operations (“FFO”): | |||||||||||||||||||||||||||||
Net income (loss) | $ | 8,192 | $ | 1,530 | $ | (1,339 | ) | $ | (944 | ) | $ | (2,139 | ) | $ | (2,939 | ) | $ | (1,872 | ) | ||||||||||
Minority interests | 87 | (21 | ) | (100 | ) | (16 | ) | (30 | ) | (110 | ) | (20 | ) | ||||||||||||||||
(Gain) loss from disposition of real estate | (5,883 | ) | — | 39 | (16 | ) | (295 | ) | — | — | |||||||||||||||||||
Real estate related depreciation and amortization | 3,326 | 2,277 | 10,009 | 8,937 | 8,233 | 6,807 | 4,188 | ||||||||||||||||||||||
Funds from operations(3)(4) | $ | 5,722 | $ | 3,786 | $ | 8,609 | $ | 7,961 | $ | 5,769 | $ | 3,758 | $ | 2,296 | |||||||||||||||
(1) | Represents per share information and cash distributions declared during the period from August 17, 2004 through March 31, 2005. |
(2) | Information as of March 31, 2005 and December 31, 2004 reflects our stockholders’ equity as a result of the IPO while previous years reflect the equity of the owners of our Predecessor Entities. |
(3) | As defined by the National Association of Real Estate Investment Trusts or NAREIT, funds from operations or FFO represents income (loss) before allocation to minority interest (computed in accordance with GAAP), excluding gains (or losses) from sales of property, plus real estate related depreciation and amortization (excluding amortization of loan origination costs) and after adjustments for unconsolidated partnerships and joint ventures. We present FFO because we consider it an important supplemental measure of our operating performance and believe it is frequently used by securities analysts, investors and other interested parties in the evaluation of REITs, many of which present FFO when reporting their results. FFO is intended to exclude GAAP historical cost depreciation and amortization of real estate and related assets, which assumes that the value of real estate diminishes ratably over time. Historically, however, real estate values have risen or fallen with market conditions. Because FFO excludes depreciation and amortization unique to real estate, gains and losses from property dispositions and extraordinary items, it provides a performance measure that, when compared year over year, reflects the impact to operations from trends in occupancy rates, rental rates, operating costs, development activities and interest costs, providing perspective not immediately apparent from net income. |
We compute FFO in accordance with standards established by the Board of Governors of NAREIT in its March 1995 White Paper (as amended in November 1999 and April 2002), which may differ from the methodology for calculating FFO utilized by other equity REITs and, accordingly, may not be comparable to such other REITs. Further, FFO does not represent amounts available for management’s discretionary use because of needed capital replacement or expansion, debt service obligations or other commitments and uncertainties. FFO should not be considered as an alternative to net income (loss) (computed in accordance with GAAP) as an indicator of our financial performance or to cash flow from operating activities (computed in accordance with GAAP) as an indicator of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to pay dividends or make distributions. |
(4) | When considering our FFO, we believe it is also a meaningful measure of our performance to exclude certain revenues and expenses from our on-campus participating properties. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Funds from Operations.” |
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Our Company and Our Business |
(in thousands) | |||||||||||||||||
Total | Balance to be | ||||||||||||||||
Contractual | Fees Previously | Earned and | |||||||||||||||
Fee | Earned and | Recognized in | Scheduled | ||||||||||||||
Property | Amount | Recognized | 2005 and 2006 | Completion | |||||||||||||
Saint Leo University Phase II | $ | 375 | $ | 199 | $ | 176 | Aug 2005 | ||||||||||
Vista del Campo Phase II | 3,501 | 168 | 3,333 | Aug 2006 | |||||||||||||
West Virginia University— pre development services | 400 | (1) | 370 | 30 | Jun 2005 | ||||||||||||
Fenn Tower Renovation | 1,509 | 10 | 1,499 | Aug 2006 | |||||||||||||
Lamar University Dining Hall | 110 | 22 | 88 | Nov 2005 | |||||||||||||
Total | $ | 5,895 | $ | 769 | $ | 5,126 | |||||||||||
(1) | Contractual fee amount is shown net of approximately $0.6 million of costs anticipated to be incurred to complete the project. |
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Acquisitions |
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Disposition |
Owned Development Activities |
Structure of On-Campus Participating Properties |
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(in thousands) | |||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||
March 31, | Year Ended December 31, | ||||||||||||||||||||
2005 | 2004 | 2004 | 2003 | 2002 | |||||||||||||||||
Revenues | $ | 5,491 | $ | 5,608 | $ | 17,730 | $ | 17,002 | $ | 16,670 | |||||||||||
Direct operating expenses(1) | 1,722 | 1,785 | 7,621 | 7,517 | 7,273 | ||||||||||||||||
Amortization | 879 | 854 | 3,532 | 3,271 | 3,152 | ||||||||||||||||
Amortization of deferred financing costs | 46 | 66 | 240 | 180 | 160 | ||||||||||||||||
Ground/facility lease expense | 212 | 175 | 846 | 584 | 664 | ||||||||||||||||
Net operating income | 2,632 | 2,728 | 5,491 | 5,450 | 5,421 | ||||||||||||||||
Interest income | 25 | 6 | 53 | 30 | 67 | ||||||||||||||||
Interest expense | (1,347 | ) | (1,449 | ) | (5,547 | ) | (5,293 | ) | (5,291 | ) | |||||||||||
Other nonoperating income | — | — | 234 | — | — | ||||||||||||||||
Net income(2) | $ | 1,310 | $ | 1,285 | $ | 231 | $ | 187 | $ | 197 | |||||||||||
(1) | Excludes the property management fees described below. This expense and the corresponding fee revenue recognized by us have been eliminated in consolidation/combination. Also excludes allocation of expenses related to corporate management and oversight. |
(2) | Includes the results of Coyote Village, which was transferred to Weatherford College in April 2004. Operations at this property are classified as discontinued operations for all relevant periods in the consolidated and combined financial statements included elsewhere in this prospectus. Excludes income taxes associated with these properties, which are owned by our TRS subsequent to the IPO. |
Our Recent Formation as a REIT |
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• | Redeemed 100% of the ownership interests of the Predecessor Entities in RAP Student Housing Properties L.L.C. (“RAP SHP”) for approximately $80.1 million. | |
• | Acquired the minority ownership interest of Titan Investments II (“Titan”) in certain owned off-campus properties in exchange for approximately $5.7 million. | |
• | Repaid certain construction and permanent indebtedness totaling approximately $105.5 million. | |
• | Distributed The Village at Riverside and certain other non-core assets to the Predecessor Entities. | |
• | Entered into a $75 million senior secured revolving credit facility under which our ability to borrow is subject to certain conditions and the satisfaction of specified financial covenants, which credit facility was subsequently amended. | |
Allocation of Fair Value to Acquired Properties |
44
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Revenue and Cost Recognition of Third Party Development and Management Services |
Student Housing Rental Revenue Recognition and Accounts Receivable |
Long-Lived Assets-Impairment |
45
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Long-Lived Assets-Held For Sale |
• | Management, having the authority to approve the action, commits to a plan to sell the asset; | |
• | The asset is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets; | |
• | An active program to locate a buyer and other actions required to complete the plan to sell the asset have been initiated; | |
• | The sale of the asset is probable, and transfer of the asset is expected to qualify for recognition as a completed sale, within one year; | |
• | The asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and | |
• | Actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. |
Discontinued Operations |
Construction Property Savings and Fire Proceeds |
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Three Months Ended | |||||||||||||||||
March 31, | |||||||||||||||||
2005 | 2004 | Change ($) | Change (%) | ||||||||||||||
Revenues: | |||||||||||||||||
Owned off-campus properties | $ | 12,489 | $ | 7,989 | $ | 4,500 | 56.3 | % | |||||||||
On-campus participating properties | 5,493 | 5,293 | 200 | 3.8 | % | ||||||||||||
Third party development and management services | 1,355 | 2,070 | (715 | ) | (34.5 | )% | |||||||||||
Resident services | 204 | — | 204 | 100.0 | % | ||||||||||||
Total revenues | 19,541 | 15,352 | 4,189 | 27.3 | % | ||||||||||||
Operating Expenses: | |||||||||||||||||
Owned off-campus properties | 5,136 | 3,459 | 1,677 | 48.5 | % | ||||||||||||
On-campus participating properties | 1,875 | 1,800 | 75 | 4.2 | % | ||||||||||||
Third party development and management services | 1,464 | 1,264 | 200 | 15.8 | % | ||||||||||||
General and administrative | 1,364 | 453 | 911 | 201.1 | % | ||||||||||||
Depreciation and amortization | 3,424 | 2,259 | 1,165 | 51.6 | % | ||||||||||||
Ground/facility leases | 212 | 141 | 71 | 50.4 | % | ||||||||||||
Total operating expenses | 13,475 | 9,376 | 4,099 | 43.7 | % | ||||||||||||
Operating income | 6,066 | 5,976 | 90 | 1.5 | % | ||||||||||||
Nonoperating income and (expenses): | |||||||||||||||||
Interest income | 58 | 13 | 45 | 346.2 | % | ||||||||||||
Interest expense | (3,808 | ) | (4,281 | ) | 473 | (11.0 | )% | ||||||||||
Amortization of deferred financing costs | (246 | ) | (144 | ) | (102 | ) | 70.8 | % | |||||||||
Other nonoperating income | 430 | — | 430 | 100.0 | % | ||||||||||||
Total nonoperating expenses | (3,566 | ) | (4,412 | ) | 846 | (19.2 | )% | ||||||||||
Income before income tax provision, minority interests, and discontinued operations | 2,500 | 1,564 | 936 | 59.8 | % | ||||||||||||
Income tax provision | (102 | ) | — | (102 | ) | (100.0 | )% | ||||||||||
Minority interests | (87 | ) | 21 | (108 | ) | (514.3 | )% | ||||||||||
Income from continuing operations | 2,311 | 1,585 | 726 | 45.8 | % | ||||||||||||
Discontinued operations: | |||||||||||||||||
Loss attributable to discontinued operations | (2 | ) | (55 | ) | 53 | (96.4 | )% | ||||||||||
Gain from disposition of real estate | 5,883 | — | 5,883 | 100.0 | % | ||||||||||||
Total discontinued operations | 5,881 | (55 | ) | 5,936 | 10,792.7 | % | |||||||||||
Net income | $ | 8,192 | $ | 1,530 | $ | 6,662 | 435.4 | % | |||||||||
Owned Off-Campus Properties Operations |
47
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On-Campus Participating Properties (“OCPP”) Operations |
Third Party Development and Management Services |
48
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Resident Services |
General and Administrative |
49
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Depreciation and Amortization |
Interest Expense |
Other Income |
Income Tax |
Minority Interests |
50
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Discontinued Operations |
51
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Year Ended December 31, | ||||||||||||||||||
2004 | 2003 | Change ($) | Change (%) | |||||||||||||||
Revenues: | ||||||||||||||||||
Owned off-campus properties | $ | 35,115 | $ | 31,514 | $ | 3,601 | 11.4 | % | ||||||||||
On-campus participating properties | 17,418 | 16,482 | 936 | 5.7 | % | |||||||||||||
Third party development and management services | 7,908 | 9,128 | (1,220 | ) | (13.4 | )% | ||||||||||||
Resident services | 382 | 12 | 370 | 3,083.3 | % | |||||||||||||
Total revenues | 60,823 | 57,136 | 3,687 | 6.5 | % | |||||||||||||
Operating Expenses: | ||||||||||||||||||
Owned off-campus properties | 16,861 | 15,272 | 1,589 | 10.4 | % | |||||||||||||
On-campus participating properties | 7,900 | 7,925 | (25 | ) | (0.3 | )% | ||||||||||||
Third party development and management services | 5,543 | 5,389 | 154 | 2.9 | % | |||||||||||||
General and administrative | 5,234 | 2,749 | 2,485 | 90.4 | % | |||||||||||||
Depreciation and amortization | 9,973 | 8,868 | 1,105 | 12.5 | % | |||||||||||||
Ground/facility leases | 812 | 489 | 323 | 66.1 | % | |||||||||||||
Total operating expenses | 46,323 | 40,692 | 5,631 | 13.8 | % | |||||||||||||
Operating income | 14,500 | 16,444 | (1,944 | ) | (11.8 | )% | ||||||||||||
Nonoperating income and (expenses): | ||||||||||||||||||
Interest income | 82 | 71 | 11 | 15.5 | % | |||||||||||||
Interest expense | (16,698 | ) | (16,940 | ) | 242 | (1.4 | )% | |||||||||||
Amortization of deferred financing costs | (1,211 | ) | (558 | ) | (653 | ) | 117.0 | % | ||||||||||
Other nonoperating income | 927 | — | 927 | 100.0 | % | |||||||||||||
Total nonoperating expenses | (16,900 | ) | (17,427 | ) | 527 | (3.0 | )% | |||||||||||
Loss before income tax benefit, minority interests, and discontinued operations | (2,400 | ) | (983 | ) | (1,417 | ) | 144.2 | % | ||||||||||
Income tax benefit | 728 | — | 728 | 100.0 | % | |||||||||||||
Minority interests | 100 | 16 | 84 | 525.0 | % | |||||||||||||
Loss from continuing operations | (1,572 | ) | (967 | ) | (605 | ) | 62.6 | % | ||||||||||
Discontinued operations: | ||||||||||||||||||
Income attributable to discontinued operations | 272 | 7 | 265 | 3,785.7 | % | |||||||||||||
(Loss) gain from disposition of real estate | (39 | ) | 16 | (55 | ) | (343.8 | )% | |||||||||||
Total discontinued operations | 233 | 23 | 210 | 913.0 | % | |||||||||||||
Net loss | $ | (1,339 | ) | $ | (944 | ) | $ | (395 | ) | 41.8 | % | |||||||
Owned Off-Campus Properties Operations |
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OCPP Operations |
Third Party Development and Management Services |
53
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Resident Services |
General and Administrative |
54
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Depreciation and Amortization |
Interest Expense |
Other Income |
Discontinued Operations |
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Year Ended December 31, | ||||||||||||||||||
2003 | 2002 | Change ($) | Change (%) | |||||||||||||||
Revenues: | ||||||||||||||||||
Owned off-campus properties | $ | 31,514 | $ | 29,997 | $ | 1,517 | 5.1 | % | ||||||||||
On-campus participating properties | 16,482 | 16,055 | 427 | 2.7 | % | |||||||||||||
Third party development and management services | 9,128 | 6,019 | 3,109 | 51.7 | % | |||||||||||||
Resident services | 12 | 60 | (48 | ) | (80.0 | )% | ||||||||||||
Total revenues | 57,136 | 52,131 | 5,005 | 9.6 | % | |||||||||||||
Operating Expenses: | ||||||||||||||||||
Owned off-campus properties | 15,272 | 14,856 | 416 | 2.8 | % | |||||||||||||
On-campus participating properties | 7,925 | 8,101 | (176 | ) | (2.2 | )% | ||||||||||||
Third party development and management services | 5,389 | 4,441 | 948 | 21.3 | % | |||||||||||||
General and administrative | 2,749 | 1,995 | 754 | 37.8 | % | |||||||||||||
Depreciation and amortization | 8,868 | 8,077 | 791 | 9.8 | % | |||||||||||||
Ground/facility leases | 489 | 643 | (154 | ) | (24.0 | )% | ||||||||||||
Total operating expenses | 40,692 | 38,113 | 2,579 | 6.8 | % | |||||||||||||
Operating income | 16,444 | 14,018 | 2,426 | 17.3 | % | |||||||||||||
Nonoperating income and (expenses): | ||||||||||||||||||
Interest income | 71 | 166 | (95 | ) | (57.2 | )% | ||||||||||||
Interest expense | (16,940 | ) | (16,421 | ) | (519 | ) | 3.2 | % | ||||||||||
Amortization of deferred financing costs | (558 | ) | (546 | ) | (12 | ) | 2.2 | % | ||||||||||
Total nonoperating expenses | (17,427 | ) | (16,801 | ) | (626 | ) | 3.7 | % | ||||||||||
Loss before minority interests and discontinued operations | (983 | ) | (2,783 | ) | 1,800 | (64.7 | )% | |||||||||||
Minority interests | 16 | 30 | (14 | ) | (46.7 | )% | ||||||||||||
Loss from continuing operations | (967 | ) | (2,753 | ) | 1,786 | (64.9 | )% | |||||||||||
Discontinued operations: | ||||||||||||||||||
Income attributable to discontinued operations | 7 | 319 | (312 | ) | (97.8 | )% | ||||||||||||
Gain from disposition of real estate | 16 | 295 | (279 | ) | (94.6 | )% | ||||||||||||
Total discontinued operations | 23 | 614 | (591 | ) | (96.3 | )% | ||||||||||||
Net loss | $ | (944 | ) | $ | (2,139 | ) | $ | 1,195 | (55.9 | )% | ||||||||
Owned Off-Campus Properties Operations |
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OCPP Operations |
Third Party Development and Management Services |
57
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General and Administrative |
Depreciation and Amortization |
Interest Expense |
Discontinued Operations |
Operating Activities |
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Investing Activities |
Three Months Ended | |||||||||
March 31, | |||||||||
2005 | 2004 | ||||||||
Property acquisitions | $ | (72,763 | ) | $ | — | ||||
Property dispositions | 28,023 | — | |||||||
Capital expenditures for on-campus participating properties | (28 | ) | (124 | ) | |||||
Capital expenditures for owned off-campus properties | (852 | ) | (168 | ) | |||||
Investments in on-campus participating properties under development | (3,027 | ) | — | ||||||
Investment in owned off-campus properties under development | (10,120 | ) | (18,866 | ) | |||||
Purchase of corporate furniture, fixtures and equipment | (86 | ) | (55 | ) | |||||
Total | $ | (58,853 | ) | $ | (19,213 | ) | |||
Financing Activities |
Operating Activities |
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Investing Activities |
Year Ended December 31, | |||||||||
2004 | 2003 | ||||||||
Property dispositions/ transfers to University | $ | — | $ | (7,976 | ) | ||||
Capital expenditures for on-campus participating properties | (1,045 | ) | (406 | ) | |||||
Capital expenditures for owned off-campus properties | (7,674 | ) | (3,775 | ) | |||||
Investments in on-campus participating properties under development | (836 | ) | (3,382 | ) | |||||
Investments in owned off-campus properties under development | (53,446 | ) | (18,002 | ) | |||||
Purchase of corporate furniture, fixtures, and equipment | (620 | ) | (197 | ) | |||||
Total | $ | (63,621 | ) | $ | (33,738 | ) | |||
Financing Activities |
Operating Activities |
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Investing Activities |
Year Ended December 31, | |||||||||
2003 | 2002 | ||||||||
Property dispositions/ transfers to University | $ | (7,976 | ) | $ | — | ||||
Capital expenditures for on-campus participating properties | (406 | ) | (396 | ) | |||||
Capital expenditures for owned off-campus properties | (3,775 | ) | (2,024 | ) | |||||
Investments in on-campus participating properties under development | (3,382 | ) | — | ||||||
Investments in owned off-campus properties under development | (18,002 | ) | (18,877 | ) | |||||
Purchase of corporate furniture, fixtures, and equipment | (197 | ) | (381 | ) | |||||
Total | $ | (33,738 | ) | $ | (21,678 | ) | |||
Financing Activities |
Cash Balances and Liquidity |
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Revolving Credit Facility |
Distributions |
Distributions to Owners of the Predecessor Entities |
62
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Recurring Capital Expenditures |
Pre-Development Expenditures |
Indebtedness |
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Per Annum | (in thousands) | ||||||||||||||
Interest | Balance as of | ||||||||||||||
Properties | Original Date | Rate | Maturity Date | March 31, 2005 | |||||||||||
University Village at Boulder Creek | 12/01/2002 | 5.71% | Nov 2012 | $ | 16,479 | ||||||||||
River Club Apartments | 07/28/2000 | 8.18% | Aug 2010 | 18,482 | |||||||||||
River Walk Townhomes | 08/31/1999 | 8.00% | Sep 2009 | 7,660 | |||||||||||
Village at Alafaya Club | 07/11/2000 | 8.16% | Aug 2010(1) | 20,418 | |||||||||||
Village at Blacksburg | 12/15/2000 | 7.50% | Jan 2011 | 21,287 | |||||||||||
Commons on Apache | 05/14/1999 | 7.66% | Jun 2009 | 7,635 | |||||||||||
Callaway House | 03/30/2001 | 7.10% | Apr 2011 | 19,661 | |||||||||||
University Club Tallahassee | 11/01/2002 | 7.99% | Oct 2010 | 13,537 | |||||||||||
The Grove at University Club | 04/01/2003 | 5.75% | Mar 2013 | 4,389 | |||||||||||
College Club Tallahassee | 01/01/2003 | 6.74% | Dec 2011 | 8,885 | |||||||||||
University Club Gainesville | 11/01/1999 | 7.88% | Nov 2009 | 8,518 | |||||||||||
City Parc at Fry Street | 10/05/2004 | 5.96% | Sep 2014 | 11,776 | |||||||||||
Exchange at Gainesville (to be renamed) | 03/29/2005 | 5.13% | Sep 2005(2) | 37,400 | |||||||||||
Total | $ | 196,127 | |||||||||||||
(1) | Represents the Anticipated Repayment Date, as defined in the loan agreement. If the loan is not repaid on the Anticipated Repayment Date, then certain monthly payments, including excess cash flow, as defined, become due during the remaining term of the loan until the maturity date of August 2030. |
(2) | This bridge loan was refinanced in May 2005 by entering into a permanent mortgage loan in the amount of $38.8 million at a fixed rate of 5.2% per annum. |
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(in thousands) | |||||||||||
Original | Original | Maturity | Balance as of | ||||||||
Properties | Date | Term | Date | March 31, 2005 | |||||||
University Village-PVAMU(1) | Sep 1999 | 24 years | Sep 2023 | $ | 30,851 | ||||||
University Village-TAMIU(1) | Sep 1999 | 24 years | Sep 2023 | 4,719 | |||||||
University College-PVAMU (Phase I)(2) | May 2001 | 22 years | Aug 2025 | 19,855 | |||||||
University College-PVAMU (Phase II)(2) | Jul 2003 | 25 years | Aug 2028 | 4,230 | |||||||
Total | $ | 59,655 | |||||||||
(1) | Part of combined bond issuance. Separate loan agreements are not cross-collateralized or cross-defaulted. |
(2) | Two financings of the University College-PVAMU facility. The two phases of this property were placed in service in 2000 and 2003. |
Total | 2005 | 2006 | 2007 | 2008 | 2009 | Thereafter | ||||||||||||||||||||||
Long-term debt(1) | $ | 345,771 | $ | 30,368 | $ | 17,795 | $ | 28,867 | $ | 32,626 | $ | 29,362 | $ | 206,753 | ||||||||||||||
Operating leases(2) | 9,810 | 527 | 509 | 482 | 478 | 480 | 7,334 | |||||||||||||||||||||
Capital leases | 715 | 275 | 182 | 135 | 95 | 28 | — | |||||||||||||||||||||
Owned off-campus development project(3) | 24,977 | 24,977 | — | — | — | — | — | |||||||||||||||||||||
Severance agreement | 625 | 455 | 170 | — | — | — | — | |||||||||||||||||||||
$ | 381,898 | $ | 56,602 | $ | 18,656 | $ | 29,484 | $ | 33,199 | $ | 29,870 | $ | 214,087 | |||||||||||||||
(1) | Long-term debt obligations reflect the payment of both principal and interest. For long-term obligations with a variable interest rate, the rate in effect at December 31, 2004 was assumed to remain constant over all periods presented. |
(2) | Includes minimum annual lease payments of $0.1 million required through 2079 under the ground lease for University Village at TU. |
(3) | Consists of the completion costs related to University Village at Sweet Home, which is scheduled to be completed in August 2005. We have entered into a contract with a general contractor for certain phases of the construction of this project. However, this contract does not generally cover all of the costs that are necessary to place the property into service, including the cost of furniture and marketing and leasing costs. The unfunded commitments presented include all such costs, not only those costs that we are obligated to fund under the construction contract. This amount does not include completion costs related to Cullen Oaks Phase II, which is funded through the construction loan described above. |
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Three Months Ended | Year Ended | ||||||||||||||||||||||||
March 31, | December 31, | ||||||||||||||||||||||||
Period from | Period from | ||||||||||||||||||||||||
2005 | 2004 | 8/17/04 to 12/31/04 | 1/1/04 to 8/16/04 | 2003 | 2002 | ||||||||||||||||||||
Net income (loss) | $ | 8,192 | $ | 1,530 | $ | 1,802 | $ | (3,141 | ) | $ | (944 | ) | $ | (2,139 | ) | ||||||||||
Minority interests | 87 | (21 | ) | 29 | (129 | ) | (16 | ) | (30 | ) | |||||||||||||||
(Gain) loss from dispositions of real estate | (5,883 | ) | — | — | 39 | (16 | ) | (295 | ) | ||||||||||||||||
Real estate related depreciation and amortization: | |||||||||||||||||||||||||
Total depreciation and amortization | 3,424 | 2,259 | 4,158 | 5,815 | 8,868 | 8,077 | |||||||||||||||||||
Discontinued operations depreciation and amortization | — | 87 | 152 | 219 | 346 | 334 | |||||||||||||||||||
Furniture, fixtures and equipment depreciation | (98 | ) | (69 | ) | (154 | ) | (181 | ) | (277 | ) | (178 | ) | |||||||||||||
Funds from operations (“FFO”) | $ | 5,722 | $ | 3,786 | $ | 5,987 | $ | 2,622 | $ | 7,961 | $ | 5,769 | |||||||||||||
FFO per share— basic | $ | 0.45 | $ | 0.48 | |||||||||||||||||||||
FFO per share— diluted | $ | 0.45 | $ | 0.47 | |||||||||||||||||||||
Weighted average common shares outstanding: | |||||||||||||||||||||||||
Basic | 12,622,145 | 12,513,130 | |||||||||||||||||||||||
Diluted | 12,769,939 | 12,634,130 | |||||||||||||||||||||||
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Three Months Ended | Year Ended | ||||||||||||||||||||||||
March 31, | December 31, | ||||||||||||||||||||||||
Period from | Period from | ||||||||||||||||||||||||
2005 | 2004 | 8/17/04 to 12/31/04 | 1/1/04 to 8/16/04 | 2003 | 2002 | ||||||||||||||||||||
Funds from operations | $ | 5,722 | $ | 3,786 | $ | 5,987 | $ | 2,622 | $ | 7,961 | $ | 5,769 | |||||||||||||
Elimination of operations of on-campus participating properties: | |||||||||||||||||||||||||
Net (income) loss from on-campus participating properties | (1,310 | ) | (1,285 | ) | (1,023 | ) | 753 | (187 | ) | (197 | ) | ||||||||||||||
Amortization of investment in on-campus participating properties | (879 | ) | (854 | ) | (1,309 | ) | (2,222 | ) | (3,270 | ) | (3,158 | ) | |||||||||||||
3,533 | 1,647 | 3,655 | 1,153 | 4,504 | 2,414 | ||||||||||||||||||||
Modifications to reflect operational performance of on-campus participating properties: | |||||||||||||||||||||||||
Our share of net cash flow(1) | 212 | 175 | 214 | 583 | 471 | 651 | |||||||||||||||||||
Management fees | 263 | 273 | 371 | 489 | 809 | 796 | |||||||||||||||||||
On-campus participating properties development fees(2) | 230 | — | 15 | — | — | — | |||||||||||||||||||
Impact of on-campus participating properties | 705 | 448 | 600 | 1,072 | 1,280 | 1,447 | |||||||||||||||||||
Funds from operations-modified for operational performance of on-campus participating properties (“FFOM”) | $ | 4,238 | $ | 2,095 | $ | 4,255 | $ | 2,225 | $ | 5,784 | $ | 3,861 | |||||||||||||
FFOM per share— basic | $ | 0.34 | $ | 0.34 | |||||||||||||||||||||
FFOM per share— diluted | $ | 0.33 | $ | 0.34 | |||||||||||||||||||||
Weighted average common shares outstanding: | |||||||||||||||||||||||||
Basic | 12,622,145 | 12,513,130 | |||||||||||||||||||||||
Diluted | 12,769,939 | 12,634,130 | |||||||||||||||||||||||
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(1) | 50% of the properties’ net cash available for distribution after payment of operating expenses, debt service (including repayment of principal) and capital expenditures. Amounts represent actual cash received for the year-to-date periods and amounts accrued for the interim periods. As a result of using accrual-based results in interim periods and cash-based results for year-to-date periods, the sum of reported interim results may not agree to annual cash received. |
(2) | Development and construction management fees related to the Cullen Oaks Phase II on-campus participating property. |
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Acquisitions |
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Owned Development Activities |
Senior Management Restructuring |
• | James C. Hopke, Jr. rejoined our Company and was appointed as Executive Vice President and Chief Investment Officer; | |
• | Brian B. Nickel, our former Executive Vice President, Chief Investment Officer and Secretary, was appointed as Executive Vice President, Chief Financial Officer and Secretary; | |
• | Jonathan Graf, our former Vice President and Controller, was promoted to Senior Vice President, Chief Accounting Officer and Treasurer; |
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• | Greg A. Dowell, our former Senior Vice President and Chief of Operations, was promoted to Executive Vice President and Chief of Operations; and | |
• | Kim K. Voss, our former Assistant Controller, was promoted to Vice President and Controller. |
![(GRAPH)](https://capedge.com/proxy/S-11A/0000950134-05-012274/d26006a1d2600605.gif)
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Change | % Change | |||||||||||
Rank | State | (2000-2010) | (2000-2010) | |||||||||
1 | California | 1,196,012 | 38.2 | % | ||||||||
2 | Texas | 395,320 | 18.6 | % | ||||||||
3 | New York | 302,794 | 18.6 | % | ||||||||
4 | Florida | 274,826 | 21.9 | % | ||||||||
5 | Massachusetts | 142,520 | 26.0 | % | ||||||||
6 | Georgia | 134,177 | 16.9 | % | ||||||||
7 | North Carolina | 131,863 | 18.2 | % | ||||||||
8 | Virginia | 122,361 | 18.5 | % | ||||||||
9 | New Jersey | 105,659 | 15.1 | % | ||||||||
10 | Illinois | 97,118 | 8.3 | % | ||||||||
11 | Arizona | 96,911 | 20.8 | % | ||||||||
12 | Maryland | 94,938 | 20.3 | % | ||||||||
13 | Pennsylvania | 85,846 | 8.1 | % | ||||||||
14 | Washington | 73,766 | 13.2 | % | ||||||||
15 | Tennessee | 55,653 | 10.2 | % | ||||||||
16 | Connecticut | 53,506 | 19.4 | % | ||||||||
17 | South Carolina | 49,999 | 13.6 | % | ||||||||
18 | Colorado | 49,826 | 12.0 | % | ||||||||
19 | Michigan | 38,027 | 4.1 | % | ||||||||
20 | Alabama | 35,155 | 8.1 | % | ||||||||
National Average | 70,067 | 14.8 | % |
• | Student housing is our core business. We have expertise in the unique and specialized aspects of the student housing industry and focus on student housing as our core business. We are a fully integrated organization, which is capable of conducting market analysis, administering the entitlement and municipal approval process, coordinating product design, securing financing, administering the development process and providing construction management, leasing and property management services. Since our inception in 1993, we have been one of the most active |
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companies in the sector as we have been involved in the development, acquisition, ownership and/or management of more than 62 student housing properties containing more than 38,200 beds. | ||
• | One of the industry’s most experienced teams. Collectively throughout their individual careers, the seven members of our senior management team have been involved in the development, acquisition or management of more than 114 student housing properties containing more than 73,500 beds at 78 colleges and universities. Our corporate team of student housing professionals have participated in every functional aspect of the ownership, acquisition, development and management of student housing. Six corporate employees at the level of Vice President or above, including our CEO, began their careers in student housing as resident assistants while in college, providing us with a comprehensive understanding of the operational aspects of the student housing business. We believe that this history of experience provides a base of knowledge that has facilitated building a company with substantial operating and development expertise in the student housing industry. | |
• | High quality student housing properties. As of March 31, 2005, our properties had an average age of only 4.7 years. Our properties are located in close proximity to, and in the case of our on-campus participating properties on the grounds of, major colleges and universities. Our typical units include private bedrooms, private or semi-private bathrooms, living rooms and full kitchens with modern appliances. Our properties typically offer extensive amenities and services, including swimming pools, basketball, sand volleyball and/or tennis courts and clubhouses with fitness centers, recreational rooms and computer labs, in an academically oriented environment that parents appreciate. Each of our properties is managed and cared for by our trained on-site staff— managers, maintenance, business personnel and resident assistants. | |
• | Extensive network of university and college relationships. This network provides us with acquisition, development and management opportunities. Our clients have included some the nation’s most prominent systems of higher education, including the State University of New York System, the University of California System, the Texas A&M University System, the Texas State University System, the University of Georgia System, the University of North Carolina System, the Purdue University System, the University of Colorado System and the Arizona State University System. | |
• | Industry innovators. With nearly $1 billion of development completed or in progress and in excess of $300 million of properties acquired over the last decade, we have led the industry in evolving student housing in the areas of product design concepts, site planning, unit plans and amenity offerings. We have also developed and implemented specialized student housing investment and operating systems and have created a proprietary lease administration and marketing software customized for student housing that enables us to quickly identify and respond to market changes and trends. |
• | developing and acquiring owned off-campus student housing communities that meet our focused investment criteria; | |
• | maximizing the profitability of our owned and third-party managed properties through proactive marketing, management and asset preservation strategies; and | |
• | continuing to grow our third-party development and management services businesses to generate cash flow and build our national reputation among colleges and universities. |
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Follow a Disciplined Off-Campus Acquisition and Development Strategy |
Property Factors |
• | Proximity to campus | |
• | Unit mix compared to competition | |
• | Marketability of floor plans compared to competition | |
• | Quality and marketability of amenity offering compared to competition | |
• | Total housing cost to residents compared to each direct competitor | |
• | Age of the structure | |
• | Quality of construction and impact related to ongoing capital expenditures | |
• | Quality of furniture, fixtures and equipment and impact on ongoing capital expenditures | |
• | Condition and extraordinary cost impacts related to mechanical and physical plant systems | |
• | Operational and marketing inefficiencies and identification of areas for improvement | |
• | Internet, communications and entertainment features incorporated into the structure | |
• | Reputation of the property and competitor properties among students and key university offices |
University Factors |
• | Size of college or university | |
• | Enrollment characteristics and growth projections | |
• | Percent of students housed on-campus | |
• | On-campus housing requirements and policies | |
• | On-campus housing products and pricing | |
• | Development plans for future housing | |
• | University’s admission policy and expected changes to such policies | |
• | Presence of university services/programs that enable establishing formal relationships |
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Market Factors |
• | Fundamentals of the overall local housing market | |
• | Fundamentals of student housing submarkets | |
• | Nature of direct competitors and their product offering | |
• | Impact of greater housing market on each student housing submarket | |
• | Barriers to entry in each student housing submarket | |
• | Student preferences related to each student housing submarket | |
• | Planned or potential future student housing development |
Maximize Property-Level Profitability |
• | establishing internal controls and procedures for cost control consistently throughout our communities; | |
• | appropriately staffing our properties at the site-level, minimizing multiple layers of management and increasing effectiveness; | |
• | negotiating utility and service-level pricing arrangements with national and regional vendors and requiring corporate-level approval of service agreements for each community; and | |
• | conducting analysis of the costs and effectiveness of each of our marketing programs via our proprietary LAMS system. |
Utilize our Proprietary Marketing Systems |
• | a fully integrated prospect tracking and follow-up system. Prospect information from all types of inquiries— walk-in, telephone, web site/email, or fax— is recorded and entered into the LAMS database, and an aggressive, fully-automated follow-up and tracking program is then implemented, |
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with LAMS generating follow-up labels and electronic communications and disseminating marketing messages. | ||
• | a built-in marketing effectiveness program to measure the success of our marketing efforts on a real time basis. LAMS generates a weekly traffic analysis that shows the quantity of each type of inquiry received for that period as well as the marketing medium that generated each piece of traffic. In addition, LAMS generates a period-to-period comparative traffic and leasing analysis that allows us to compare the pace of the current year’s traffic and leasing activity to that of previous years. This enables us to track the effectiveness of each marketing program being utilized and to respond accordingly. | |
• | a real-time monitor of lease closings and leasing terms. LAMS automatically generates closing reports allowing us to measure the staff’s closing ratios. The closing ratios are calculated by LAMS on an individual basis so that we may better evaluate performance and optimize our staffing. LAMS generates application and leasing status reports that detail the current period and year-to-date status of applications and leasing broken down by type of accommodation. This enables us to quickly identify potential problems related to pricing and/or desirability of our various types of accommodations and to respond accordingly. | |
• | an automated lease generation system. Each property’s lease term and rental rate information is set up in LAMS by authorized corporate staff. This enables the corporate office to maintain tight controls on pricing changes and special promotions. LAMS generates each resident lease, eliminating the potential for manual errors of our on-site staff. |
Capitalize on our Unique Understanding of Student Housing |
Build Products that Meet Students’ Expectations |
Build a Sense of Community Through Design |
Proactively Manage Leasing Cycles and Annual Turnover |
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Manage Individual Lease Liability and Accounts Receivables |
Dispel the “Animal House” Myth |
Maintain Communities Conducive to Academic Achievement |
Develop and Retain Personnel |
Maintain and Develop Strategic Relationships |
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Efficiently Manage the Unique Structure of our Leases |
Owned Off-Campus Properties |
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On-Campus Participating Properties |
• | a term of 30-40 years, subject to early termination upon repayment of the mortgage financing, which generally has a 25-year amortization; | |
• | ground/facility lease rent of a nominal amount (e.g., $100 per annum over the lease term) plus 50% of net cash available for distribution; | |
• | the right of first refusal by the educational institution to purchase our leasehold interest in the event we propose to sell it to any third party; | |
• | an obligation by the educational institution to promote the project, include information relative to the project in brochures and mailings and to permit us to advertise the project; | |
• | the requirement to receive the educational institution’s consent to increase rental rates by a percentage greater than the percentage increase in our property operating expenses plus the amount of any increases in debt service; and | |
• | the option of the educational institution to purchase our interest in and assume management of the facility, with the purchase price calculated at the discounted present cash value of our leasehold interest. |
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Third Party Services |
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Balance to be | |||||||||||||||||
Fees Previously | Earned and | ||||||||||||||||
Total Contractual | Earned and | Recognized in | Scheduled | ||||||||||||||
Property | Fee Amount | Recognized | 2005 and 2006 | Completion | |||||||||||||
Saint Leo University Phase II | $ | 375 | $ | 199 | $ | 176 | Aug 2005 | ||||||||||
Vista del Campo Phase II | 3,501 | 168 | 3,333 | Aug 2006 | |||||||||||||
West Virginia University— pre-development services | 400 | (1) | 370 | 30 | Jun 2005 | ||||||||||||
Fenn Tower Renovation | 1,509 | 10 | 1,499 | Aug 2006 | |||||||||||||
Lamar University Dining Hall | 110 | 22 | 88 | Nov 2005 | |||||||||||||
Total | $ | 5,895 | $ | 769 | $ | 5,126 | |||||||||||
(1) | Net of approximately $0.6 million of costs anticipated to be incurred to complete the project. |
Competition from Universities and Colleges |
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Competition from Public and Private Owners |
• | The Callaway House, in which we own an 80% partnership interest and are entitled to significant preferred distributions; | |
• | University Village at TU, which is subject to a 75-year ground lease from Temple University (with four additional six-year extensions); and | |
• | Five on-campus participating properties held under ground/facility leases with two university systems. |
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Year | ||||||||||||||||||||
Acquired/ | Occupancy | |||||||||||||||||||
Property | Developed | Location | Primary University Served | Rates (1) | Units | Beds | ||||||||||||||
Off-Campus Properties: | ||||||||||||||||||||
1. Commons On Apache | 1999 | Tempe, AZ | Arizona State University Main Campus | 100.0 | % | 111 | 444 | |||||||||||||
2. The Village at Blacksburg | 2000 | Blacksburg, VA | Virginia Polytechnic Institute and State University | 98.6 | % | 288 | 1,056 | |||||||||||||
3. The Village on University | 1999 | Tempe, AZ | Arizona State University Main Campus | 99.1 | % | 288 | 918 | |||||||||||||
4. River Club Apartments | 1999 | Athens, GA | The University of Georgia– Athens | 95.5 | % | 266 | 794 | |||||||||||||
5. River Walk Townhomes | 1999 | Athens, GA | The University of Georgia– Athens | 97.1 | % | 100 | 340 | |||||||||||||
6. The Callaway House(2) | 2001 | College Station, TX | Texas A&M University | 101.3 | % | 173 | 538 | |||||||||||||
7. The Village at Alafaya Club | 2000 | Orlando, FL | The University of Central Florida | 97.4 | % | 228 | 840 | |||||||||||||
8. The Village at Science Drive | 2001 | Orlando, FL | The University of Central Florida | 99.3 | % | 192 | 732 | |||||||||||||
9. University Village at Boulder Creek | 2002 | Boulder, CO | The University of Colorado at Boulder | 87.7 | % | 82 | 309 | |||||||||||||
10. University Village at Fresno | 2004 | Fresno, CA | California State University, Fresno | 98.8 | % | 105 | 406 | |||||||||||||
11. University Village at TU | 2004 | Philadelphia, PA | Temple University | 98.8 | % | 220 | 749 | |||||||||||||
12. University Village at Sweet Home(3) | 2005 | Amherst, NY | State University of New York– Buffalo | — | 269 | 828 | ||||||||||||||
13. University Club Tallahassee | 2005 | Tallahassee, FL | Florida State University | 93.4 | % | 152 | 608 | |||||||||||||
14. The Grove at University Club | 2005 | Tallahassee, FL | Florida State University | 98.4 | % | 64 | 128 | |||||||||||||
15. College Club Tallahassee | 2005 | Tallahassee, FL | Florida A&M University | 92.4 | % | 96 | 384 | |||||||||||||
16. The Greens at College Club | 2005 | Tallahassee, FL | Florida A&M University | 96.9 | % | 40 | 160 | |||||||||||||
17. University Club Gainesville | 2005 | Gainesville, FL | University of Florida | 98.9 | % | 94 | 376 | |||||||||||||
18. City Parc at Fry Street | 2005 | Denton, TX | University of North Texas | 94.7 | % | 136 | 418 | |||||||||||||
19. Exchange at Gainesville (to be renamed) | 2005 | Gainesville, FL | University of Florida | 95.6 | % | 396 | 1,044 | |||||||||||||
Total off-campus properties | 97.2 | % | 3,300 | 11,072 | ||||||||||||||||
On-Campus Participating Properties: | ||||||||||||||||||||
20. University Village– PVAMU | 1996/97/98 | Prairie View, TX | Prairie View A&M University | 93.0 | % | 612 | 1,920 | |||||||||||||
21. University College– PVAMU | 2000/2003 | Prairie View, TX | Prairie View A&M University | 95.0 | % | 756 | 1,470 | |||||||||||||
22. University Village– TAMIU | 1997 | Laredo, TX | Texas A&M International University | 70.2 | % | 84 | 252 | |||||||||||||
23. Cullen Oaks Phase I | 2001 | Houston, TX | The University of Houston | 99.6 | % | 231 | 525 | |||||||||||||
24. Cullen Oaks Phase II(3) | 2005 | Houston, TX | The University of Houston | — | 180 | 354 | ||||||||||||||
Total on-campus participating properties | 93.1 | % | 1,863 | 4,521 | ||||||||||||||||
Total– all properties | 96.0 | % | 5,163 | 15,593 | ||||||||||||||||
(1) | Occupancy rates are calculated as of March 31, 2005. Occupancy is based on the number of total occupied beds (including beds occupied by staff) divided by total beds. |
(2) | Also has a food service facility. |
(3) | Currently under development with a scheduled completion date of August 2005. |
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Applications | % of | Applications | |||||||||||||||||||||||||||
and Leases | Rentable | and Leases | Variance to | ||||||||||||||||||||||||||
as of | Beds as of | as of | Prior Year | Total | |||||||||||||||||||||||||
May 27, | May 27, | May 28, | Rentable | Design | |||||||||||||||||||||||||
Applications and Leases | 2005 | 2005 | 2004 | Beds | % | Beds(1) | Beds | ||||||||||||||||||||||
Commons of Apache | 444 | 100.0 | % | 444 | 0 | 0.0 | % | 444 | 444 | ||||||||||||||||||||
The Village at Blacksburg | 1,034 | 98.7 | % | 1,030 | 4 | 0.4 | % | 1,048 | 1,056 | ||||||||||||||||||||
The Village on University | 515 | 56.7 | % | 656 | (141 | ) | (21.5 | )% | 909 | 918 | |||||||||||||||||||
River Club Apartments | 719 | 92.8 | % | 543 | 176 | 32.4 | % | 775 | 794 | ||||||||||||||||||||
River Walk Townhomes | 296 | 88.9 | % | 316 | (20 | ) | (6.3 | )% | 333 | 340 | |||||||||||||||||||
The Callaway House | 642 | 121.8 | % | 569 | 73 | 12.8 | % | 527 | 538 | ||||||||||||||||||||
The Village at Alafaya Club | 581 | 70.1 | % | 586 | (5 | ) | (0.9 | )% | 829 | 840 | |||||||||||||||||||
The Village at Science Drive | 717 | 99.3 | % | 718 | (1 | ) | (0.1 | )% | 722 | 732 | |||||||||||||||||||
University Village at Boulder Creek | 168 | 56.2 | % | 218 | (50 | ) | (22.9 | )% | 299 | 309 | |||||||||||||||||||
University Village Fresno | 336 | 84.8 | % | 218 | 118 | 54.1 | % | 396 | 406 | ||||||||||||||||||||
University Village at TU | 728 | 99.3 | % | 734 | (6 | ) | (0.8 | )% | 733 | 749 | |||||||||||||||||||
University Village at Sweet Home | 835 | 102.2 | % | n/a | n/a | n/a | 817 | 828 | |||||||||||||||||||||
University Club Tallahassee(2) | 744 | 102.5 | % | n/a | n/a | n/a | 726 | 736 | |||||||||||||||||||||
College Club Tallahassee(3) | 392 | 73.1 | % | n/a | n/a | n/a | 536 | 544 | |||||||||||||||||||||
University Club Gainesville | 267 | 71.8 | % | n/a | n/a | n/a | 372 | 376 | |||||||||||||||||||||
City Parc at Fry Street | 196 | 47.6 | % | n/a | n/a | n/a | 412 | 418 | |||||||||||||||||||||
Exchange at Gainesville (to be renamed) | 949 | 92.0 | % | n/a | n/a | n/a | 1,032 | 1,044 | |||||||||||||||||||||
Total | 10,910 | 11,072 | |||||||||||||||||||||||||||
(1) | Rentable Beds exclude beds needed for on-site staff and/or model units. |
(2) | For lease administration purposes, University Club Tallahassee and the Grove at University Club are reported combined. |
(3) | For lease administration purposes, College Club Tallahassee and the Greens at College Club are reported combined. |
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Beds/ | Monthly Asking | |||||||||||||||||||||||
Unit Type | No. Units | Unit | Beds | Unit SF | Total RSF | Rent/Bed* | ||||||||||||||||||
Four Bedroom/ Four Bath | 105 | 4 | 420 | 1,125 | 118,125 | $ | 645-675 | |||||||||||||||||
Two Bedroom/ Two Bath (Double Occ.) | 49 | 4 | 196 | 682 | 33,418 | $ | 500 | |||||||||||||||||
Three Bedroom/ Three Bath | 1 | 3 | 3 | 905 | 905 | $ | 660-690 | |||||||||||||||||
Two Bedroom/ One Bath | 65 | 2 | 130 | 448 | 29,120 | $ | 625 | |||||||||||||||||
Total | 220 | 749 | 181,568 | |||||||||||||||||||||
* | Asking prices for 2005/2006 academic year. |
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Beds/ | Monthly Asking | |||||||||||||||||||||||
Unit Type | No. Units | Unit | Beds | Unit SF | Total RSF | Rent/Bed* | ||||||||||||||||||
Four Bedroom/ Four Bath | 36 | 4 | 144 | 1,355 | 48,780 | $ | 501 | |||||||||||||||||
Four Bedroom/ Four Bath | 48 | 4 | 192 | 1,313 | 63,024 | $ | 486 | |||||||||||||||||
Three Bedroom/ Three Bath | 24 | 3 | 72 | 1,083 | 25,992 | $ | 516 | |||||||||||||||||
Three Bedroom/ Three Bath | 108 | 3 | 324 | 1,040 | 112,320 | $ | 499 | |||||||||||||||||
Two Bedroom/ Two Bath | 132 | 2 | 264 | 807 | 106,524 | $ | 532 | |||||||||||||||||
One Bedroom/ One Bath | 48 | 1 | 48 | 554 | 26,592 | $ | 801 | |||||||||||||||||
Total | 396 | 1,044 | 383,232 | |||||||||||||||||||||
* | Asking prices for 2005/2006 academic year. |
General |
Americans With Disabilities Act and Federal Fair Housing Act |
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Environmental Matters |
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• | approximately 226 on-site employees in our owned off-campus properties segment, including 78 resident assistants; | |
• | approximately 87 on-site employees in our on-campus participating properties segment, including 41 resident assistants; | |
• | approximately 394 employees in our third party property management services segment, comprised of 372 on-site employees and resident assistants, and 22 corporate office employees; | |
• | approximately 19 corporate office employees in our third party development services segment; and | |
• | approximately 37 executive, corporate administration and financial personnel. |
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Name | Age | Position | ||||
William C. Bayless, Jr. | 41 | President, Chief Executive Officer and Director | ||||
R.D. Burck | 72 | Chairman of the Board and Independent Director | ||||
G. Steven Dawson | 47 | Independent Director | ||||
Cydney Donnell | 45 | Independent Director | ||||
Edward Lowenthal | 60 | Independent Director | ||||
Brian B. Nickel | 32 | Executive Vice President, Chief Financial Officer, Secretary and Director | ||||
Scott H. Rechler | 37 | Director | ||||
Winston W. Walker | 61 | Independent Director | ||||
Greg A. Dowell | 41 | Executive Vice President and Chief of Operations | ||||
James C. Hopke, Jr. | 43 | Executive Vice President and Chief Investment Officer | ||||
Brian N. Winger | 37 | Senior Vice President–Development | ||||
Jason R. Wills | 33 | Senior Vice President–Marketing and Business Development | ||||
Jonathan Graf | 40 | Senior Vice President, Chief Accounting Officer and Treasurer |
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Audit Committee |
Executive Committee |
Compensation Committee |
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Nominating and Corporate Governance Committee |
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Long-Term | |||||||||||||||||
Compensation | |||||||||||||||||
Annual Compensation | |||||||||||||||||
Restricted Stock | |||||||||||||||||
Name and Principal Position | Year | Salary | Bonus | Awards (1) | |||||||||||||
William C. Bayless, Jr. | 2004 | $ | 253,333 | $ | 130,000 | $ | 300,000 | ||||||||||
Chief Executive Officer and President | 2003 | 210,000 | 80,000 | — | |||||||||||||
2002 | 200,000 | 80,000 | — | ||||||||||||||
Brian B. Nickel | 2004 | 210,333 | 115,000 | 200,000 | |||||||||||||
Executive Vice President, Chief Financial Officer | 2003 | 175,000 | 100,000 | — | |||||||||||||
and Secretary | 2002 | 153,500 | 155,440 | — | |||||||||||||
Mark J. Hager(2) | 2004 | 162,944 | 100,000 | 150,000 | |||||||||||||
Former Executive Vice President, Chief | 2003 | 132,500 | 50,000 | — | |||||||||||||
Financial and Accounting Officer and Treasurer | 2002 | 128,116 | 40,000 | — | |||||||||||||
Greg A. Dowell | 2004 | 130,000 | 40,000 | 50,000 | |||||||||||||
Executive Vice President and Chief of Operations | 2003 | 124,000 | 25,000 | — | |||||||||||||
2002 | 120,000 | 20,000 | — | ||||||||||||||
Ronnie L. Macejewski(2) | 2004 | 126,690 | 25,000 | 24,000 | |||||||||||||
Former Senior Vice President— Development | 2003 | 123,000 | 90,000 | — | |||||||||||||
and Construction | 2002 | 118,976 | 48,810 | — |
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(1) | Represents the value, as of February 16, 2005, the date of grant, of restricted stock awards to the Named Executive Officers. Awards to Messrs. Bayless, Nickel and Hager vest in five equal annual installments beginning on February 28, 2006. Awards to Messrs. Dowell and Macejewski vest in three equal annual installments beginning on February 28, 2006, and were forfeited on the date of termination of employment. Dividends on restricted stock awards are paid at the same rate and time as paid to holders of our common stock. No stock appreciation rights were granted and no long-term incentive plan payouts were made in 2004, 2003 or 2002. |
(2) | Mr. Macejewski resigned in April 2005 and Mr. Hager resigned as Executive Vice President, Chief Financial and Accounting Officer and Treasurer in May 2005 and will resign as an employee in June 2005. |
Performances | Estimated Future Payouts | ||||||||||||||||||||
Number of | or Other | Under Non-Stock Price-Based Plans | |||||||||||||||||||
Shares, | Period Until | ||||||||||||||||||||
Units or | Maturation | Threshold | Target | Maximum | |||||||||||||||||
Name | Other Rights | or Payout | (# of Shares) | (# of Shares) | (# of Shares) | ||||||||||||||||
William C. Bayless, Jr. | 48,400 | (1) | — | 48,400 | 48,400 | ||||||||||||||||
PIU Award | 110,305 | 8/17/07 | — | 110,305 | 110,305 | ||||||||||||||||
Outperformance Award(2) | |||||||||||||||||||||
Brian B. Nickel | 29,040 | (1) | — | 29,040 | 29,040 | ||||||||||||||||
PIU Award | 66,183 | 8/17/07 | — | 66,183 | 66,183 | ||||||||||||||||
Outperformance Award(2) | |||||||||||||||||||||
Mark J. Hager | 12,100 | (1) | — | 12,100 | 12,100 | ||||||||||||||||
PIU Award | 29,415 | 8/17/07 | — | 29,415 | 29,415 | ||||||||||||||||
Outperformance Award(2) | |||||||||||||||||||||
Greg A. Dowell | 10,890 | (1) | — | 10,890 | 10,890 | ||||||||||||||||
PIU Award | 29,415 | 8/17/07 | — | 29,415 | 29,415 | ||||||||||||||||
Outperformance Award(2) | |||||||||||||||||||||
Ronnie L. Macejewski | 9,074 | (1) | — | 9,074 | 9,074 | ||||||||||||||||
PIU Award | 18,384 | 8/17/07 | — | 18,384 | 18,384 | ||||||||||||||||
Outperformance Award(2) |
(1) | See discussion of “Profits Interest Units” below. |
(2) | See discussion of “Outperformance Award” below. |
Restricted Stock and Restricted Stock Units |
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Profits Interest Units |
Outperformance Awards |
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Employment Contracts |
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Non-Competition Agreements |
Indemnification Agreements |
• | the act or omission of the director or executive officer was material to the matter giving rise to the proceeding and was committed in bad faith or was the result of active and deliberate dishonesty; | |
• | the director or executive officer actually received an improper personal benefit in money, property or other services; or | |
• | with respect to any criminal action or proceeding, the director or executive officer had reasonable cause to believe that his or her conduct was unlawful. |
• | the act or omission of the director or executive officer was material to the matter giving rise to the proceeding and was committed in bad faith or was the result of active and deliberate dishonesty; or | |
• | the director or executive officer actually received an improper personal benefit in money, property or other services; |
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• | the court determines that such director or executive officer is entitled to indemnification under the applicable section of the laws of the state of Maryland or Maryland law (which includes without limitation, Maryland General Corporation Law, as amended), in which case the director or executive officer shall be entitled to recover from us the expenses of securing such indemnification; or | |
• | the court determines that such director or executive officer is fairly and reasonably entitled to indemnification in view of all of the relevant circumstances, whether or not the director or executive officer has met the standards of conduct set forth in the applicable section of Maryland law or has been adjudged liable for receipt of an improper personal benefit under the applicable section of Maryland law; provided, however, that our indemnification obligations to such director or executive officer will be limited to the expenses actually and reasonably incurred by him or her, or on his or her behalf, in connection with any proceeding by or in the right of our Company or in which the officer or director shall have been adjudged liable for receipt of an improper personal benefit under the applicable section of Maryland law. |
Equity Compensation Plan Information |
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�� | ||||||||||||
Number of | Weighted- | |||||||||||
Securities to be | Average Exercise | Number of | ||||||||||
Issued Upon | Price of | Securities | ||||||||||
Exercise of | Outstanding | Remaining Available | ||||||||||
Outstanding | Options, | for Future Issuance | ||||||||||
Options, Warrants | Warrants and | Under Equity | ||||||||||
Plan Category | and Rights | Rights | Compensation Plans | |||||||||
Equity Compensation Plans Approved by Security Holders(2) | 7,145 | (1) | $ | 0 | 1,202,855 | |||||||
Equity Compensation Plans Not Approved by Security Holders | n/a | n/a | n/a |
(1) | Consists of restricted stock units granted to non-employee directors other than Mr. Rechler in connection with our IPO. |
(2) | Does not include 121,000 PIUs and 367,682 common stock awards in the form of an outperformance bonus plan. Upon the occurrence of certain events or the achievement of certain performance measures, these awards will be paid to the recipients in either stock or cash, at the discretion of the compensation committee of the board of directors. If these awards were included in the above table, as of December 31, 2004 we would have 714,173 shares available for future issuance under the 2004 incentive award plan. |
• | RAP received a cash payment of approximately $78.5 million for the redemption of its interests in RAP SHP. Additionally, RAP received a final working capital distribution from cash on hand of $1.5 million and $0.2 million in budgeted development fees relating to the construction properties to be paid from the remaining construction budgets. | |
• | RAP SHP and an affiliate of RSVP distributed their interests in the entities owning The Village at Riverside to an affiliate of RAP and RSVP, and RAP SHP maintained its guaranty of certain contingent obligations of RAP and RSVP under the non-recourse indebtedness encumbering this property. Subsequent to the IPO, the property was foreclosed upon by the lender. | |
• | RAP SHP distributed to entities affiliated with RSVP, RAP and other persons certain assets that we considered to be unrelated to its core business, including a fee title to a parcel of commercially-zoned land that is adjacent to the University Village at San Bernardino and interests |
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in entities that previously developed a residential condominium project adjacent to University Village at Boulder Creek and that currently own one remaining condominium unit in that project. | ||
• | RAP and RSVP were entitled to $0.4 million, which was paid in February 2005, of savings in the budgeted completion cost of our three owned off-campus construction properties that were completed in Fall 2004, as well as $0.9 million, which was paid in November 2004, of insurance proceeds that we received with respect to the fire at University Village at Fresno. Additionally, upon completion of the construction at University Village at TU, RAP was entitled to receive $0.5 million relating to a construction guarantee fee, which was paid from the remaining construction budget in September 2004. | |
• | RSVP granted us an option to acquire its indirect 23% ownership interest in Dobie Center at a price based on a $52.0 million valuation of the property less the then outstanding debt. The option expires in August 2008 but may expire earlier if title to Dobie Center is transferred to a third party. | |
• | Reckson and RSVP, through their respective ownership interests in RAP, were entitled to participate in the benefits realized by RAP described above. | |
• | We agreed to nominate Mr. Rechler to be a director of our board of directors at our next two annual meetings, subject to his consent and eligibility to serve. Mr. Rechler agreed to waive receipt of any director compensation until such time as he was reelected by our stockholders, which occurred in May 2005. |
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Investment in Real Estate or Interests in Real Estate |
Investments in Real Estate Mortgages |
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Securities of or Interests in Persons Primarily Engaged in Real Estate Activities and Other Issuers |
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• | the material facts relating to the common directorship or interest and as to the transaction are disclosed to our board of directors or a committee of our board, and our board or committee authorizes, approves or ratifies the transaction or contract by the affirmative vote of a majority of disinterested directors, even if the disinterested directors constitute less than a quorum; | |
• | the material facts relating to the common directorship or interest and as to the transaction are disclosed to our stockholders entitled to vote thereon, and the transaction is authorized, approved or ratified by a majority of the votes cast by the stockholders entitled to vote; or | |
• | the transaction or contract is fair and reasonable to us at the time it is authorized, ratified or approved. |
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• | Redeemed 100% of the ownership interests of the Predecessor Entities in RAP SHP for approximately $80.1 million. | |
• | Acquired the minority ownership interest of Titan in certain owned off-campus properties in exchange for approximately $5.7 million. | |
• | Repaid certain construction and permanent indebtedness totaling approximately $105.5 million. | |
• | Distributed The Village at Riverside and certain other non-core assets to the Predecessor Entities. | |
• | Entered into a $75 million senior secured revolving credit facility with affiliates of Citigroup Global Markets Inc. and Deutsche Bank Securities Inc., two of our underwriters, as joint lead arrangers, which credit facility was subsequently amended. | |
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• | add to our obligations as general partner or surrender any right or power granted to us as general partner for the benefit of the limited partners; | |
• | reflect the issuance of additional units or the admission, substitution, termination or withdrawal of partners in accordance with the terms of the partnership agreement; | |
• | reflect a change of an inconsequential nature that does not adversely affect the limited partners in any material respect, or cure any ambiguity, correct or supplement any provisions of the partnership agreement not inconsistent with law or with other provisions of the partnership agreement, or make other changes concerning matters under the partnership agreement that will not otherwise be inconsistent with the partnership agreement or law; | |
• | satisfy any requirements, conditions or guidelines contained in any order, directive, opinion, ruling or regulation of a federal or state agency or contained in federal or state law; | |
• | reflect changes that are reasonably necessary for us to maintain our status as a REIT; or | |
• | modify the manner in which capital accounts are computed. |
• | take any action in contravention of an express prohibition or limitation contained in the partnership agreement; | |
• | enter into or conduct any business other than in connection with our role as general partner of the Operating Partnership and our operation as a REIT; | |
• | withdraw from the Operating Partnership or transfer any portion of our general partnership interest; or | |
• | be relieved of our obligations under the partnership agreement following any permitted transfer of our general partnership interest. |
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(a) | all limited partners will receive, or have the right to elect to receive, for each unit an amount of cash, securities, or other property equal to the product of: |
(i) | the number of shares of our common stock into which each unit is then exchangeable; and | |
(ii) | The greatest amount of cash, securities or other property paid to the holder of one share of our common stock in consideration of one share of our common stock pursuant to the termination transaction; or |
(b) | the following conditions are met: |
(i) | substantially all of the assets of the surviving entity are held directly or indirectly by our Operating Partnership or another limited partnership or limited liability company |
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which is the survivor of a merger, consolidation or combination of assets with our Operating Partnership; | ||
(ii) | the holders of units own a percentage interest of the surviving entity based on the relative fair market value of the net assets of our Operating Partnership and the other net assets of the surviving entity immediately prior to the consummation of this transaction; | |
(iii) | the rights, preferences and privileges of such unit holders in the surviving entity are at least as favorable to those in effect immediately prior to the consummation of the transaction and as those applicable to any other limited partners or non-managing members of the surviving entity; and | |
(iv) | the limited partners may exchange their interests in the surviving entity for either the consideration available to the common limited partners pursuant to the first paragraph in this section or, if the ultimate controlling person of the surviving entity has publicly traded common equity securities, shares of those common equity securities, at an exchange ratio based on the relative fair market value of those securities and our common stock. |
• | the act or omission of the indemnitee was material to the matter giving rise to the proceeding and either was committed in bad faith or fraud or was the result of active and deliberate dishonesty; | |
• | the indemnitee actually received an improper personal benefit in money, property or services; or | |
• | in the case of any criminal proceeding, the indemnitee had reasonable cause to believe that the act or omission was unlawful. |
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Shares Beneficially Owned After this Offering | ||||||||||||||||||||
Shares Beneficially Owned | Percent Before | Percent After | ||||||||||||||||||
Prior to this Offering | Exercise of | Exercise of | ||||||||||||||||||
Over-allotment | Over-allotment | |||||||||||||||||||
Number | Percent | Number(14) | Option | Option | ||||||||||||||||
William C. Bayless, Jr. | 14,027 | (1) | * | 62,427 | (1)(14) | * | * | |||||||||||||
R.D. Burck | 2,000 | (2) | * | 2,000 | (2) | * | * | |||||||||||||
G. Steven Dawson | 2,000 | (2) | * | 2,000 | (2) | * | * | |||||||||||||
Cydney Donnell | 1,000 | (2) | * | 1,000 | (2) | * | * | |||||||||||||
Edward Lowenthal | 14,000 | (2) | * | 14,000 | (2) | * | * | |||||||||||||
Brian B. Nickel | 9,385 | (3) | * | 38,425 | (3)(14) | * | * | |||||||||||||
Scott H. Rechler | 28,500 | (2) | * | 28,500 | (2) | * | * | |||||||||||||
Winston W. Walker | — | — | — | — | — | |||||||||||||||
Greg A. Dowell | 2,321 | (4) | * | 13,211 | (4)(14) | * | * | |||||||||||||
FMR Corp. | 1,553,990 | (5) | 12.3 | % | 1,553,990 | (5) | 9.7 | % | 9.4 | % | ||||||||||
Deutsche Bank AG | 1,500,000 | (6) | 11.9 | % | 1,500,000 | (6) | 9.4 | % | 9.1 | % | ||||||||||
Clarion CRA Securities, LP | 1,283,300 | (7) | 10.1 | % | 1,283,300 | (7) | 8.0 | % | 7.8 | % | ||||||||||
LaSalle Investment Management Securities Ltd. | 1,022,603 | (8) | 8.1 | % | 1,022,603 | (8) | 6.4 | % | 6.2 | % | ||||||||||
Cohen & Steers Capital Management, Inc. | 1,007,600 | (9) | 8.0 | % | 1,007,600 | (9) | 6.3 | % | 6.1 | % | ||||||||||
K.G. Redding & Associates, LLC | 934,500 | (10) | 7.4 | % | 934,500 | (10) | 5.8 | % | 5.7 | % | ||||||||||
Morgan Stanley | 804,500 | (11) | 6.4 | % | 804,500 | (11) | 5.0 | % | 4.9 | % | ||||||||||
AMVESCAP PLC | 696,800 | (12) | 5.5 | % | 696,800 | (12) | 4.4 | % | 4.2 | % | ||||||||||
All directors and executive officers as a group (13 persons) | 77,357 | (13) | * | 177,183 | (13)(14) | 1.1 | % | 1.1 | % |
* | Less than one percent. |
(1) | Represents 100 shares of common stock owned directly and 13,927 shares of restricted stock. | |
(2) | Represents shares of common stock owned directly. | |
(3) | Represents 100 shares of common stock owned directly and 9,285 shares of restricted stock. | |
(4) | Represents 2,321 shares of restricted stock. | |
(5) | This information is based upon information contained in filings made by the stockholder with the SEC reporting beneficial ownership as of December 31, 2004. The address of FMR Corp. is 82 Devonshire Street, Boston, MA 02109. FMR Corp. possessed sole voting power over 149,900 shares and sole dispositive power over 1,553,990 shares and each of Edward C. Johnson and Abigail P. Johnson possessed sole dispositive power over 1,553,990 shares. | |
(6) | This information is based upon information contained in filings made by the stockholder with the SEC reporting beneficial ownership as of December 31, 2004. The address of Deutsche Bank AG is Taunusanlage 12, D-60325, Frankfurt am Main, Federal Republic of Germany. Deutsche Bank AG and RREEF America, L.L.C. each possessed sole voting and sole dispositive power over these shares. Approximately 98% of such shares are owned by registered investment funds managed by RREEF America, L.L.C., which is a registered investment adviser subsidiary of Deutsche Bank AG. | |
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(7) | This information is based upon information contained in filings made by the stockholder with the SEC reporting beneficial ownership as of December 31, 2004. The address of Clarion CRA Securities, L.P. is 259 North Radnor Chester Road, Suite 205, Radnor, PA 19087. | |
(8) | This information is based upon information contained in filings made by the stockholder with the SEC reporting beneficial ownership as of December 31, 2004. The address LaSalle Investment Management Securities, Ltd. is 100 E. Pratt Street, 20th Floor, Baltimore, MD 21202. | |
(9) | This information is based upon information contained in filings made by the stockholder with the SEC reporting beneficial ownership as of December 31, 2004. The address of Cohen & Steers Capital Management Inc. is 757 Third Avenue, New York, NY 10017. |
(10) | This information is based upon information contained in filings made by the stockholder with the SEC reporting beneficial ownership as of December 31, 2004. The address of K.G. Redding & Associates, LLC is One North Wacker Drive, Suite 4343, Chicago, IL 60606. K.G. Redding & Associates, LLC possessed sole voting power over 157,400 shares and sole dispositive power over 934,500 shares. |
(11) | This information is based upon information contained in filings made by the stockholder with the SEC reporting beneficial ownership as of December 31, 2004. The address of Morgan Stanley is 1585 Broadway, New York, NY 10036. Morgan Stanley beneficially owned an aggregate of 804,500 shares and possessed sole voting and sole dispositive power over 585,000 shares, and Morgan Stanley Investment Management Inc. beneficially owned an aggregate of 760,800 shares and possessed sole voting and sole dispositive power over 558,400 shares. |
(12) | This information is based upon information contained in filings made by the stockholder with the SEC reporting beneficial ownership as of December 31, 2004. The address of AMVESCAP PLC is 11 Devonshire Square, London EC2M 4YR, England. |
(13) | Represents 48,900 shares of common stock owned directly and 28,457 shares of restricted stock. |
(14) | Includes the following units owned as a result of this Offering constituting a book-up event for purposes of the PIUs and the PIUs achieving full parity with common units. Each common unit is redeemable for cash based on the fair market value of a share of our common stock, or, at our election, one share of our common stock. |
Name | Number of PIUs | |||
William C. Bayless, Jr. | 48,400 | |||
Brian B. Nickel | 29,040 | |||
Greg A. Dowell | 10,890 | |||
All directors and executive officers as a group (13 persons) | 99,826 |
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• | determines that such ownership will not cause any individual’s beneficial ownership of shares of our stock to violate the ownership limit and that any exemption from the ownership limit will not jeopardize our status as a REIT; and | |
• | determines that such stockholder does not and will not own, actually or constructively, an interest in a tenant of ours (or a tenant of any entity whose operations are attributed in whole or in part to us) that would cause us to own, actually or constructively, more than a 9.8% interest (as set forth in Section 856(d)(2)(B) of the Code) in such tenant or that any such ownership would not cause us to fail to qualify as a REIT under the Code. |
• | any person from beneficially or constructively owning shares of our stock that would result in our being “closely held” under Section 856(h) of the Code or otherwise cause us to fail to qualify as a REIT; and | |
• | any person from transferring shares of our stock if such transfer would result in shares of our stock being beneficially owned by fewer than 100 persons (determined without reference to any rules of attribution). |
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• | to rescind as void any vote cast by a purported record transferee prior to our discovery that the shares have been transferred to the trust; and | |
• | to recast the vote in accordance with the desires of the trustee acting for the benefit of the beneficiary of the trust. |
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• | the merger will merge one of our 90% or more owned subsidiaries into us without amending our charter other than in limited respects and without altering the contract rights of the stock of the subsidiary (in which case only the approval of our board of directors and the board of directors of the subsidiary is necessary); | |
• | we are the successor corporation in a share exchange (in which case only the approval of our board of directors is necessary); or | |
• | we are the survivor in the merger and the merger does not change the terms of any class or series of our outstanding stock, or otherwise amend our charter, and the number of shares of stock of each class or series outstanding immediately before the merger does not increase by more than 20% of the number of shares of each such class or series of stock that was outstanding immediately prior to effectiveness of the merger (in which case only the approval of our board of directors is necessary). |
• | pursuant to our notice of the meeting; | |
• | by or at the direction of our board of directors; or | |
• | by a stockholder who is entitled to vote at the meeting and has complied with the advance notice procedures set forth in our bylaws. |
• | pursuant to our notice of the meeting; | |
• | by or at the direction of our board of directors; or | |
• | provided that our board of directors has determined that directors will be elected at such meeting, by a stockholder who is entitled to vote at the meeting and has complied with the advance notice provisions set forth in our bylaws. |
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• | any present or former director or officer who is made a party to the proceeding by reason of his or her service in that capacity; or | |
• | any individual who, while a member of our board and at our request, serves or has served another corporation, real estate investment trust, partnership, joint venture, trust, employee benefit plan or any other enterprise as a director, officer, partner or trustee of such corporation, real estate investment trust, partnership, joint venture, trust, employee benefit plan or other enterprise and who is made a party to the proceeding by reason of his or her service in that capacity. |
• | the act or omission of the director or officer was material to the matter giving rise to the proceeding and: |
• | was committed in bad faith; or | |
• | was the result of active and deliberate dishonesty; |
• | the director or officer actually received an improper personal benefit in money, property or services; or | |
• | in the case of any criminal proceeding, the director or officer had reasonable cause to believe that the act or omission was unlawful. |
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• | a written affirmation by the director or officer of his good faith belief that he has met the standard of conduct necessary for indemnification by the corporation; and | |
• | a written undertaking by the director or by another on the director’s behalf to repay the amount paid or reimbursed by the corporation if it is ultimately determined that the director did not meet the standard of conduct. |
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• | 1% of the shares of our common stock then outstanding, which will equal approximately 160,150 shares immediately after this Offering (165,250 shares if the underwriters exercise their overallotment option in full); or | |
• | the average weekly trading volume of our common stock on the NYSE during the four calendar weeks preceding the date on which notice of the sale is filed with the SEC. |
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• | dealers in securities or currencies; | |
• | traders in securities that elect to use a mark-to-market method of accounting for their securities holdings; | |
• | banks and other financial institutions; | |
• | tax-exempt organizations (except to the limited extent discussed in “—Taxation of Tax-Exempt Stockholders”); | |
• | certain insurance companies; | |
• | persons liable for the alternative minimum tax; | |
• | persons that hold common stock as a hedge against interest rate or currency risks or as part of a straddle or conversion transaction; | |
• | non-U.S. individuals and foreign corporations (except to the limited extent discussed in “—Taxation of Non-U.S. Stockholders”); and | |
• | stockholders whose functional currency is not the U.S. dollar. |
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• | First, we will have to pay tax at regular corporate rates on any undistributed real estate investment trust taxable income, including undistributed net capital gains. | |
• | Second, under certain circumstances, we may have to pay the alternative minimum tax on items of tax preference. | |
• | Third, if we have (a) net income from the sale or other disposition of “foreclosure property,” as defined in the Code, which is held primarily for sale to customers in the ordinary course of business or (b) other non- qualifying income from foreclosure property, we will have to pay tax at the highest corporate rate on that income. | |
• | Fourth, if we have net income from “prohibited transactions,” as defined in the Code, we will have to pay a 100% tax on that income. Prohibited transactions are, in general, certain sales or other dispositions of property, other than foreclosure property, held primarily for sale to customers in the ordinary course of business. We do not intend to engage in prohibited transactions. We cannot assure you, however, that we will only make sales that satisfy the requirements of the safe harbors or that the IRS will not successfully assert that one or more of such sales are prohibited transactions. | |
• | Fifth, if we should fail to satisfy the 75% gross income test or the 95% gross income test, as discussed below under “—Requirements for Qualification,” but we have nonetheless maintained our qualification as a REIT because we have satisfied other requirements necessary to maintain REIT qualification, we will have to pay a 100% tax on an amount equal to (a) the gross income attributable to the greater of (i) 75% of our gross income over the amount of gross income that is qualifying income for purposes of the 75% test, and (ii) 95% of our gross income over the amount of gross income that is qualifying income for purposes of the 95% test, multiplied by (b) a fraction intended to reflect our profitability. | |
• | Sixth, beginning in the 2005 taxable year, if we fail, in more than a de minimis fashion, to satisfy one or more of the asset tests under the REIT provisions of the Code for any quarter of a taxable year, but nonetheless continue to qualify as a REIT because we qualify under certain relief provisions, we will likely be required to pay a tax of the greater of $50,000 or a tax computed at |
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the highest corporate rate on the amount of net income generated by the assets causing the failure from the date of failure until the assets are disposed of or we otherwise return to compliance with the asset test. | ||
• | Seventh, beginning in the 2005 taxable year, if we fail to satisfy one or more of the requirements for REIT qualification under the REIT provisions of the Code (other than the income tests or the asset tests), we nevertheless may avoid termination of our REIT election in such year if the failure is due to reasonable cause and not due to willful neglect and we pay a penalty of $50,000 for each failure to satisfy the REIT qualification requirements. | |
• | Eighth, if we should fail to distribute during each calendar year at least the sum of (1) 85% of our real estate investment trust ordinary income for that year, (2) 95% of our real estate investment trust capital gain net income for that year and (3) any undistributed taxable income from prior periods, we would have to pay a 4% excise tax on the excess of that required dividend over the amounts actually distributed. | |
• | Ninth, if we acquire any appreciated asset from a C corporation in certain transactions in which we must adopt the basis of the asset or any other property in the hands of the C corporation as our basis of the asset in our hands, and we recognize gain on the disposition of that asset during the 10-year period beginning on the date on which we acquired that asset, then we will have to pay tax on the built-in gain at the highest regular corporate rate. In general, a “C corporation” means a corporation that has to pay full corporate-level tax. | |
• | Tenth, if we receive non-arm’s length income from one of our taxable REIT subsidiaries (as defined under “—Requirements for Qualification”), we will be subject to a 100% tax on the amount of our non-arm’s-length income. |
• | that is managed by one or more trustees or directors; | |
• | the beneficial ownership of which is evidenced by transferable shares, or by transferable certificates of beneficial interest; | |
• | that would otherwise be taxable as a domestic corporation, but for Sections 856 through 859 of the Code; | |
• | that is neither a financial institution nor an insurance company to which certain provisions of the Code apply; | |
• | the beneficial ownership of which is held by 100 or more persons; | |
• | during the last half of each taxable year, not more than 50% in value of the outstanding stock of which is owned, directly or constructively, by five or fewer individuals, as defined in the Code to also include certain entities; and | |
• | which meets certain other tests, described below, regarding the nature of its income and assets. |
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Gross Income Tests |
• | rents from real property; | |
• | interest on debt secured by mortgages on real property, or on interests in real property; | |
• | dividends or other distributions on, and gain from the sale of, shares in other REITs; |
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• | gain from the sale of real estate assets; and | |
• | income derived from the temporary investment of new capital that is attributable to the issuance of our shares of beneficial interest or a public offering of our debt with a maturity date of at least five years and that we receive during the one year period beginning on the date on which we received such new capital. |
• | First, the rent must not be based in whole or in part on the income or profits of any person. Participating rent, however, will qualify as “rents from real property” if it is based on percentages of receipts or sales and the percentages: (a) are fixed at the time the leases are entered into, (b) are not renegotiated during the term of the leases in a manner that has the effect of basing rent on income or profits, and (c) conform with normal business practice. |
More generally, the rent will not qualify as “rents from real property” if, considering the relevant lease and all of the surrounding circumstances, the arrangement does not conform with normal business practice, but is in reality used as a means of basing the rent on income or profits. We intend to set and accept rents which are fixed dollar amounts, and not to any extent by reference to any person’s income or profits, in compliance with the rules above. |
• | Second, we must not own, actually or constructively, 10% or more of the stock or the assets or net profits of any lessee, referred to as a related party tenant, other than a TRS. The constructive ownership rules generally provide that, if 10% or more in value of our shares is owned, directly or indirectly, by or for any person, we are considered as owning the stock owned, directly or indirectly, by or for such person. |
We do not own any stock or any assets or net profits of any lessee directly, except that we may lease office or other space to our TRS or another taxable REIT subsidiary. We believe that each of the leases will conform with normal business practice, contain arm’s-length terms and that the rent payable under those leases will be treated as rents from real property for purposes of the 75% and 95% gross income tests. However, there can be no assurance that the IRS will not successfully assert a contrary position or that a change in circumstances will not cause a portion of the rent payable under the leases to fail to qualify as “rents from real property.” If such failures were in sufficient amounts, we might not be able to satisfy either of the 75% or 95% gross income tests and could lose our REIT status. In addition, if the IRS successfully reapportions or reallocates items of income, deduction, and credit among and between us and our TRS under the leases or any intercompany transaction because it determines that doing so is necessary to prevent the evasion of taxes or to clearly reflect income, we could be subject to a 100% excise tax on those amounts. As described above, we may own one or more taxable REIT subsidiaries. Under an exception to the related-party tenant rule described in the preceding paragraph, rent that we receive from a taxable REIT subsidiary will qualify as “rents from real property” as long as (1) at least 90% of the leased space in the property is leased to persons other than taxable REIT subsidiaries and related party tenants, and (2) the amount paid by the TRS to rent space at the property is substantially comparable to rents paid by other tenants of the property for comparable space. If we receive rent from a TRS, we will seek to comply with this exception. Whether rents paid by our TRS are substantially comparable to rents paid by our other tenants is determined at |
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the time the lease with the TRS is entered into, extended, and modified, if such modification increases the rents due under such lease. Notwithstanding the foregoing, however, if a lease with a controlled TRS is modified and such modification results in an increase in the rents payable by such TRS, any such increase will not qualify as “rents from real property.” For purposes of this rule, a “controlled TRS” is a TRS in which we own stock possessing more than 50% of the voting power or more than 50% of the total value of the outstanding stock of such TRS. |
• | Third, the rent attributable to the personal property leased in connection with a lease of real property must not be greater than 15% of the total rent received under the lease. |
The rent attributable to personal property under a lease is the amount that bears the same ratio to total rent under the lease for the taxable year as the average of the fair market values of the leased personal property at the beginning and at the end of the taxable year bears to the average of the aggregate fair market values of both the real and personal property covered by the lease at the beginning and at the end of such taxable year (the “personal property ratio”). With respect to each of our leases, we believe that the personal property ratio generally is less than 15%. Where that is not, or may in the future not be, the case, we believe that any income attributable to personal property will not jeopardize our ability to qualify as a REIT. |
• | Fourth, we cannot furnish or render noncustomary services to the tenants of our properties, or manage or operate our properties, other than through an independent contractor who is adequately compensated and from whom we do not derive or receive any income. However, we need not provide services through an “independent contractor,” but instead may provide services directly to our tenants, if the services are “usually or customarily rendered” in connection with the rental of space for occupancy only and are not considered to be provided for the tenants’ convenience. In addition, we may provide a minimal amount of “noncustomary” services to the tenants of a property, other than through an independent contractor, as long as our income from the services does not exceed 1% of our income from the related property. Finally, we may own up to 100% of the stock of one or more taxable REIT subsidiaries, which may provide noncustomary services to our tenants without tainting our rents from the related properties. |
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• | our failure to meet the income tests was due to reasonable cause and not due to willful neglect; and | |
• | we file a description of each item of our gross income in accordance with applicable Treasury Regulations. |
• | First, at least 75% of the value of our total assets must consist of: (a) cash or cash items, including certain receivables, (b) government securities, (c) interests in real property, including leaseholds and options to acquire real property and leaseholds, (d) interests in mortgages on real property, (e) stock in other REITs, and (f) investments in stock or debt instruments during the |
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one year period following our receipt of new capital that we raise through equity offerings or offerings of debt with at least a five year term; | ||
• | Second, of our investments not included in the 75% asset class, the value of our interest in any one issuer’s securities may not exceed 5% of the value of our total assets; | |
• | Third, we may not own more than 10% of the voting power or value of any one issuer’s outstanding securities; | |
• | Fourth, no more than 20% of the value of our total assets may consist of the securities of one or more taxable REIT subsidiaries; and | |
• | Fifth, no more than 25% of the value of our total assets may consist of the securities of taxable REIT subsidiaries and other non-TRS taxable subsidiaries and other assets that are not qualifying assets for purposes of the 75% asset test. |
• | we satisfied the asset tests at the end of the preceding calendar quarter; and | |
• | the discrepancy between the value of our assets and the asset test requirements arose from changes in the market values of our assets and was not wholly or partly caused by the acquisition of one or more non-qualifying assets. |
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• | a citizen or resident of the United States; | |
• | a domestic corporation; | |
• | an estate whose income is subject to United States Federal income taxation regardless of its source; or | |
• | a trust if a United States court can exercise primary supervision over the trust’s administration and one or more United States persons have authority to control all substantial decisions of the trust. |
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• | is a corporation or comes within certain other exempt categories and, when required, demonstrates this fact; or | |
• | provides a taxpayer identification number, certifies as to no loss of exemption from backup withholding, and otherwise complies with the applicable requirements of the backup withholding rules. |
• | is described in Section 401(a) of the Code; | |
• | is tax-exempt under Section 501(a) of the Code; and | |
• | holds more than 10% (by value) of the equity interests in the REIT. |
• | it would not have qualified as a REIT but for the fact that Section 856(h)(3) of the Code provides that stock owned by qualified trusts will be treated, for purposes of the “not closely held” requirement, as owned by the beneficiaries of the trust (rather than by the trust itself); and |
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• | either (a) at least one qualified trust holds more than 25% by value of the interests in the REIT or (b) one or more qualified trusts, each of which owns more than 10% by value of the interests in the REIT, hold in the aggregate more than 50% by value of the interests in the REIT. |
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Backup Withholding and Information Reporting |
• | dividend payments; | |
• | the payment of the proceeds from the sale of common stock effected at a United States office of a broker, as long as the income associated with these payments is otherwise exempt from United States Federal income tax; and | |
• | the payor or broker does not have actual knowledge or reason to know that you are a United States person and you have furnished to the payor or broker: (a) a valid Internal Revenue Service Form W-8BEN or an acceptable substitute form upon which you certify, under penalties of perjury, that you are a non-United States person, or (b) other documentation upon which it may rely to treat the payments as made to a non-United States person in accordance with U.S. Treasury Regulations, or (c) you otherwise establish an exemption. |
• | the proceeds are transferred to an account maintained by you in the United States; | |
• | the payment of proceeds or the confirmation of the sale is mailed to you at a United States address; or | |
• | the sale has some other specified connection with the United States as provided in U.S. Treasury Regulations, |
• | a United States person; | |
• | a controlled foreign corporation for United States tax purposes; | |
• | a foreign person 50% or more of whose gross income is effectively connected with the conduct of a United States trade or business for a specified three-year period; or | |
• | a foreign partnership, if at any time during its tax year: (a) one or more of its partners are “U.S. persons,” as defined in U.S. Treasury Regulations, who in the aggregate hold more than 50% of the income or capital interest in the partnership, or (b) such foreign partnership is engaged in the conduct of a United States trade or business, |
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• | is treated as a partnership under the Treasury Regulations relating to entity classification (the “check-the-box regulations”); and | |
• | is not a “publicly traded” partnership. |
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• | an ERISA plan make investments that are prudent and in the best interests of the ERISA plan, its participants and beneficiaries; | |
• | an ERISA plan make investments that are diversified in order to reduce the risk of large losses, unless it is clearly prudent for the ERISA plan not to do so; | |
• | an ERISA plan’s investments are authorized under ERISA and the terms of the governing documents of the ERISA plan; and | |
• | the fiduciary not cause the ERISA plan to enter into transactions prohibited under Section 406 of ERISA (and certain corresponding provisions of the Code). |
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• | freely transferable; | |
• | part of a class of securities that is widely held; and | |
• | either part of a class of securities that is registered under section 12(b) or 12(g) of the Exchange Act or sold to an ERISA plan as part of an offering of securities to the public pursuant to an effective registration statement under the Securities Act, and the class of securities of which this security is a part is registered under the Exchange Act within 120 days, or longer if allowed by the SEC, after the end of the fiscal year of the issuer during which this Offering of these securities to the public occurred. |
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• | invested in real estate which is managed or developed and with respect to which the entity has the right to substantially participate directly in the management or development activities; and | |
• | which, in the ordinary course of its business, is engaged directly in real estate management or development activities. |
• | invested in one or more operating companies with respect to which the entity has management rights; and | |
• | which, in the ordinary course of its business, actually exercises its management rights with respect to one or more of the operating companies in which it invests. |
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Number of | |||||
Underwriter | Shares | ||||
Citigroup Global Markets Inc. | |||||
Deutsche Bank Securities Inc. | |||||
J.P. Morgan Securities Inc. | |||||
KeyBanc Capital Markets, a division of McDonald Investments Inc. | |||||
Wachovia Capital Markets, LLC | |||||
RBC Capital Markets Corporation | |||||
Total | |||||
Per Share | Total | |||||||||||||||
No | Full | No | Full | |||||||||||||
Exercise | Exercise | Exercise | Exercise | |||||||||||||
Underwriting discounts and commissions paid by us | $ | $ | $ | $ |
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• | grants of stock options, PIUs, restricted stock units or restricted stock to employees, consultants or directors pursuant to the terms of the 2004 incentive award plan in effect as of the date of this prospectus; | |
• | issuances of our common stock pursuant to a dividend reinvestment plan (if any); or | |
• | issuances of our common stock, units or securities convertible into or exchangeable or exercisable for shares of our common stock in connection with other acquisitions of interests in real property or real property companies or entities owning interests in real property. |
• | Stabilizing transactions permit bids to purchase or the purchase of the underlying security while this distribution of the common stock offered pursuant to this prospectus is in progress so long as the stabilizing bids do not exceed a specified maximum. | |
• | Overallotment involves sales by the underwriters of shares in excess of the number of shares the underwriters are obligated to purchase, which creates a syndicate short position. The short position may be either a covered short position or a naked short position. In a covered short position, the number of shares over-allotted by the underwriters is not greater than the number of shares that they may purchase in the over-allotment option. In a naked short position, the number of shares involved is greater than the number of shares in the overallotment option. The underwriters may close out any covered short position by either exercising their overallotment option and/or purchasing shares in the open market. |
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• | Syndicate covering transactions involve purchases of our common stock in the open market after the distribution of such stock has been completed in order to cover syndicate short positions. In determining the source of shares to close out the short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase shares through the overallotment option. If the underwriters sell more shares than could be covered by the overallotment option, a naked short position, the position can only be closed out by buying shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that there could be downward pressure on the price of the shares in the open market after pricing that could adversely affect investors who purchase in this Offering. |
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150
Page | |||||
American Campus Communities, Inc. and Subsidiaries | |||||
Unaudited Pro Forma Condensed Consolidated and Combined Financial Statements | |||||
Summary | F-2 | ||||
F-3 | |||||
F-4 | |||||
F-5 | |||||
Consolidated and Combined Financial Statements | |||||
F-6 | |||||
F-7 | |||||
F-8 | |||||
F-9 | |||||
F-10 | |||||
F-24 | |||||
F-25 | |||||
F-26 | |||||
F-27 | |||||
F-28 | |||||
F-29 | |||||
Proctor Portfolio Properties | |||||
F-54 | |||||
F-55 | |||||
F-56 | |||||
Exchange at Gainesville | |||||
F-57 | |||||
F-58 | |||||
F-59 |
F-1
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F-2
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Company | Acquired | Pro Forma | Company | ||||||||||||||
Historical | Properties | Adjustments | Pro Forma | ||||||||||||||
(A) | (B) | ||||||||||||||||
Revenues | $ | 19,541 | $ | 2,784 | $ | — | $ | 22,325 | |||||||||
Operating expenses: | |||||||||||||||||
Property operating expenses | 7,011 | 1,128 | — | 8,139 | |||||||||||||
Third party development and management services | 1,464 | — | — | 1,464 | |||||||||||||
General and administrative | 1,364 | — | — | 1,364 | |||||||||||||
Depreciation and amortization | 3,424 | 340 | — | 3,764 | |||||||||||||
Ground/facility leases | 212 | — | — | 212 | |||||||||||||
Total operating expenses | 13,475 | 1,468 | — | 14,943 | |||||||||||||
Operating income | 6,066 | 1,316 | — | 7,382 | |||||||||||||
Nonoperating income and (expenses): | |||||||||||||||||
Interest income | 58 | — | — | 58 | |||||||||||||
Interest expense | (3,808 | ) | (962 | ) | — | (4,770 | ) | ||||||||||
Amortization of deferred financing costs | (246 | ) | (16 | ) | — | (262 | ) | ||||||||||
Other nonoperating income | 430 | — | — | 430 | |||||||||||||
Total nonoperating expenses | (3,566 | ) | (978 | ) | — | (4,544 | ) | ||||||||||
Income before income tax provision and minority interests | 2,500 | 338 | — | 2,838 | |||||||||||||
Income tax provision | (102 | ) | — | — | (102 | ) | |||||||||||
Minority interests | (87 | ) | — | (3 | )(C) | (90 | ) | ||||||||||
Income from continuing operations | $ | 2,311 | $ | 338 | $ | (3 | ) | $ | 2,646 | ||||||||
Income from continuing operations per share: | |||||||||||||||||
Basic | $ | 0.18 | $ | 0.21 | |||||||||||||
Diluted | $ | 0.19 | $ | 0.21 | |||||||||||||
Weighted average common shares outstanding: | |||||||||||||||||
Basic | 12,622,145 | 12,622,145 | |||||||||||||||
Diluted | 12,769,939 | 12,769,939 | |||||||||||||||
F-3
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Company | Predecessor | ||||||||||||||||||||
Period from | Period from | Company | |||||||||||||||||||
August 17, 2004 | January 1, 2004 | and Predecessor | |||||||||||||||||||
to December 31, | to August 16, | Acquired | Pro Forma | Pro Forma | |||||||||||||||||
2004 | 2004 | Properties | Adjustments | Combined | |||||||||||||||||
(A) | (A) | (B) | |||||||||||||||||||
Revenues | $ | 26,262 | $ | 34,561 | $ | 15,800 | $ | — | $ | 76,623 | |||||||||||
Operating expenses: | |||||||||||||||||||||
Property operating expenses | 9,345 | 15,416 | 7,169 | — | 31,930 | ||||||||||||||||
Third party development and management services | 2,140 | 3,403 | — | — | 5,543 | ||||||||||||||||
General and administrative | 4,202 | 1,032 | — | 938 | (D) | 6,172 | |||||||||||||||
Depreciation and amortization | 4,158 | 5,815 | 4,619 | — | 14,592 | ||||||||||||||||
Ground/facility leases | 214 | 598 | — | — | 812 | ||||||||||||||||
Total operating expenses | 20,059 | 26,264 | 11,788 | 938 | 59,049 | ||||||||||||||||
Operating income | 6,203 | 8,297 | 4,012 | (938 | ) | 17,574 | |||||||||||||||
Nonoperating income and (expenses): | |||||||||||||||||||||
Interest income | 39 | 43 | — | — | 82 | ||||||||||||||||
Interest expense | (5,556 | ) | (11,142 | ) | (5,827 | ) | 2,523 | (E) | (20,002 | ) | |||||||||||
Amortization of deferred financing costs | (842 | ) | (369 | ) | (135 | ) | 251 | (F) | (1,095 | ) | |||||||||||
Other nonoperating income | 653 | 274 | — | — | 927 | ||||||||||||||||
Total nonoperating expenses | (5,706 | ) | (11,194 | ) | (5,962 | ) | 2,774 | (20,088 | ) | ||||||||||||
Income (loss) before income tax benefit and minority interests | 497 | (2,897 | ) | (1,950 | ) | 1,836 | (2,514 | ) | |||||||||||||
Income tax benefit | 728 | — | — | — | 728 | ||||||||||||||||
Minority interests | (29 | ) | 129 | — | (99 | )(C) | 1 | ||||||||||||||
Income (loss) from continuing operations | $ | 1,196 | $ | (2,768 | ) | $ | (1,950 | ) | $ | 1,737 | $ | (1,785 | ) | ||||||||
Income (loss) from continuing operations per share: | |||||||||||||||||||||
Basic | $ | 0.10 | $ | (0.14 | ) | ||||||||||||||||
Diluted | $ | 0.10 | $ | (0.14 | ) | ||||||||||||||||
Weighted average common shares outstanding: | |||||||||||||||||||||
Basic | 12,513,130 | 109,015 | (G) | 12,622,145 | |||||||||||||||||
Diluted | 12,634,130 | (11,985 | )(G) | 12,622,145 | |||||||||||||||||
F-4
Table of Contents
(A) | Reflects the Company’s historical condensed consolidated statements of operations for the three months ended March 31, 2005 and for the period from August 17, 2004 to December 31, 2004, and the Predecessor’s historical condensed combined statement of operations for the period from January 1, 2004 to August 16, 2004. | |
(B) | Reflects the results of operations for the Exchange at Gainesville, City Parc at Fry Street and the five-property Proctor Portfolio for the period indicated. Revenues and property operating expenses reflect the historical amounts incurred by the respective properties prior to their respective acquisition dates. Depreciation and amortization reflects depreciation expense on the respective properties’ fixed assets purchased and recorded at fair value and the amortization of in-place leases recognized upon acquisition of the respective property, which is amortized over the remaining initial term of the respective leases, generally less than one year. | |
Interest expense reflects the debt assumed or incurred by the Company for the respective property acquisition, and interest expense incurred under the Company’s revolving credit facility for borrowings made to complete the respective acquisition. Debt assumed by the Company was valued at fair market value. Amortization of deferred financing costs reflects amortization of costs incurred in connection with the debt assumed or incurred by the Company for the respective property acquisition. | ||
(C) | For the three months ended March 31, 2005 and for the period from January 1, 2004 to August 16, 2004, an adjustment was made to reflect the 1.0% minority interest in pro forma earnings for the recognition of a 1.0% special class of partnership interests in the Operating Partnership granted to certain members of executive and senior management in conjunction with the IPO. This was offset for the year ended December 31, 2004 unaudited pro forma condensed consolidated and combined statement of operations by the elimination of a minority interest in earnings resulting from the acquisition (with proceeds from the IPO) of a minority ownership interest in a joint venture. | |
(D) | Reflects the pro forma increased costs associated with operating as a public company for the period from January 1, 2004 until the consummation of the Company’s IPO on August 17, 2004. Such costs include compensation and staffing, directors and officers liability insurance premiums, Board of Directors costs and increased legal expenses. | |
(E) | Reflects the repayment of certain debt with proceeds from the IPO, assuming that the loans were repaid on January 1, 2004. | |
(F) | Represents a decrease in amortization of deferred financing costs as a result of the repayment of debt in connection with the IPO mentioned in Note (E). | |
(G) | Assumes that the IPO and related common share issuance occurred effective January 1, 2004. |
F-5
Table of Contents
March 31, 2005 | December 31, 2004 | ||||||||
(Unaudited) | |||||||||
Assets | |||||||||
Investments in real estate: | |||||||||
Owned off-campus properties, net | $ | 385,359 | $ | 250,100 | |||||
Owned off-campus property — held for sale | — | 22,350 | |||||||
On-campus participating properties, net | 70,271 | 68,064 | |||||||
Investments in real estate, net | 455,630 | 340,514 | |||||||
Cash and cash equivalents | 6,425 | 4,050 | |||||||
Restricted cash and short-term investments | 7,382 | 9,816 | |||||||
Student contracts receivable, net | 3,013 | 2,164 | |||||||
Other assets | 14,037 | 11,084 | |||||||
Total assets | $ | 486,487 | $ | 367,628 | |||||
Liabilities and stockholders’ equity | |||||||||
Liabilities: | |||||||||
Debt | $ | 314,385 | $ | 201,014 | |||||
Accounts payable and accrued expenses | 5,280 | 5,443 | |||||||
Other liabilities | 22,793 | 20,294 | |||||||
Total liabilities | 342,458 | 226,751 | |||||||
Minority interests | 2,649 | 2,648 | |||||||
Commitments and contingencies (Note 11) | |||||||||
Stockholders’ equity: | |||||||||
Common stock, $.01 par value, 800,000,000 shares authorized, 12,615,000 shares issued and outstanding | 126 | 126 | |||||||
Additional paid in capital | 135,150 | 136,259 | |||||||
Accumulated earnings and distributions | 5,717 | 1,802 | |||||||
Accumulated other comprehensive income | 387 | 42 | |||||||
Total stockholders’ equity | 141,380 | 138,229 | |||||||
Total liabilities and stockholders’ equity | $ | 486,487 | $ | 367,628 | |||||
F-6
Table of Contents
Company | Predecessor | ||||||||
Three Months | Three Months | ||||||||
Ended | Ended | ||||||||
March 31, 2005 | March 31, 2004 | ||||||||
Revenues: | |||||||||
Owned off-campus properties | $ | 12,489 | $ | 7,989 | |||||
On-campus participating properties | 5,493 | 5,293 | |||||||
Third party development services | 609 | 1,671 | |||||||
Third party development services — on-campus participating properties | 36 | 27 | |||||||
Third party management services — affiliates | — | 74 | |||||||
Third party management services | 710 | 298 | |||||||
Resident services | 204 | — | |||||||
Total revenues | 19,541 | 15,352 | |||||||
Operating expenses: | |||||||||
Owned off-campus properties | 5,136 | 3,459 | |||||||
On-campus participating properties | 1,875 | 1,800 | |||||||
Third party development and management services | 1,464 | 1,264 | |||||||
General and administrative | 1,364 | 453 | |||||||
Depreciation and amortization | 3,424 | 2,259 | |||||||
Ground/facility leases | 212 | 141 | |||||||
Total operating expenses | 13,475 | 9,376 | |||||||
Operating income | 6,066 | 5,976 | |||||||
Nonoperating income and (expenses): | |||||||||
Interest income | 58 | 13 | |||||||
Interest expense | (3,808 | ) | (4,281 | ) | |||||
Amortization of deferred financing costs | (246 | ) | (144 | ) | |||||
Other nonoperating income | 430 | — | |||||||
Total nonoperating expenses | (3,566 | ) | (4,412 | ) | |||||
Income before income tax provision, minority interests, and discontinued operations | 2,500 | 1,564 | |||||||
Income tax provision | (102 | ) | — | ||||||
Minority interests | (87 | ) | 21 | ||||||
Income from continuing operations | 2,311 | 1,585 | |||||||
Discontinued operations: | |||||||||
Loss attributable to discontinued operations | (2 | ) | (55 | ) | |||||
Gain from disposition of real estate | 5,883 | — | |||||||
Total discontinued operations | 5,881 | (55 | ) | ||||||
Net income | $ | 8,192 | $ | 1,530 | |||||
Income per share — basic: | |||||||||
Income from continuing operations per share | $ | 0.18 | |||||||
Net income per share | $ | 0.65 | |||||||
Income per share — diluted: | |||||||||
Income from continuing operations per share | $ | 0.19 | |||||||
Net income per share | $ | 0.65 | |||||||
Weighted average common shares outstanding: | |||||||||
Basic | 12,622,145 | ||||||||
Diluted | 12,769,939 | ||||||||
Distributions declared per common share | $ | 0.3375 | |||||||
F-7
Table of Contents
Company | Predecessor | ||||||||
Three Months Ended | Three Months Ended | ||||||||
March 31, 2005 | March 31, 2004 | ||||||||
Net income | $ | 8,192 | $ | 1,530 | |||||
Other comprehensive income (loss): | |||||||||
Change in fair value of interest rate swap | 345 | (371 | ) | ||||||
Change in fair value of interest rate cap | — | 6 | |||||||
Net comprehensive income | $ | 8,537 | $ | 1,165 | |||||
F-8
Table of Contents
Company | Predecessor | |||||||||
Three Months | Three Months | |||||||||
Ended | Ended | |||||||||
March 31, 2005 | March 31, 2004 | |||||||||
Operating activities | ||||||||||
Net income | $ | 8,192 | $ | 1,530 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||
Gain from disposition of real estate | (5,883 | ) | — | |||||||
Minority interests | 87 | (21 | ) | |||||||
Depreciation and amortization | 3,424 | 2,346 | ||||||||
Amortization of deferred financing costs and debt premiums | 127 | 162 | ||||||||
Compensation expense recognized for restricted stock awards | 24 | — | ||||||||
Income tax provision | 102 | — | ||||||||
Changes in operating assets and liabilities: | ||||||||||
Restricted cash and short-term investments | 3,013 | 1,120 | ||||||||
Student contracts receivable, net | (849 | ) | (2,402 | ) | ||||||
Other assets | (1,474 | ) | 2,293 | |||||||
Accounts payable and accrued expenses | (414 | ) | 2,387 | |||||||
Other liabilities | (636 | ) | (2,178 | ) | ||||||
Net cash provided by operating activities | 5,713 | 5,237 | ||||||||
Investing activities | ||||||||||
Net proceeds from disposition of real estate | 28,023 | — | ||||||||
Cash paid for property acquisitions | (72,763 | ) | — | |||||||
Investments in owned off-campus properties | (10,972 | ) | (19,034 | ) | ||||||
Investments in on-campus participating properties | (3,055 | ) | (124 | ) | ||||||
Purchase of furniture, fixtures and equipment | (86 | ) | (55 | ) | ||||||
Net cash used in investing activities | (58,853 | ) | (19,213 | ) | ||||||
Financing activities | ||||||||||
Proceeds from revolving credit facility, net of paydowns | 21,800 | — | ||||||||
Proceeds from bridge loan | 37,400 | — | ||||||||
Proceeds from construction loans | 2,528 | 12,190 | ||||||||
Principal payments on debt | (484 | ) | (428 | ) | ||||||
Change in construction accounts payable | 681 | 3,459 | ||||||||
Debt issuance and offering costs | (913 | ) | (1,697 | ) | ||||||
Distributions to common and restricted stockholders and partnership unit holders | (4,277 | ) | — | |||||||
Contributions from Predecessor owners | — | 370 | ||||||||
Distributions to Predecessor owners | (1,179 | ) | (882 | ) | ||||||
Distributions to minority partners | (41 | ) | (8 | ) | ||||||
Net cash provided by financing activities | 55,515 | 13,004 | ||||||||
Net change in cash and cash equivalents | 2,375 | (972 | ) | |||||||
Cash and cash equivalents at beginning of period | 4,050 | 5,227 | ||||||||
Cash and cash equivalents at end of period | $ | 6,425 | $ | 4,255 | ||||||
Supplemental disclosure of non-cash investing and financing activities | ||||||||||
Change in fair value of derivative instruments, net | $ | 345 | $ | (365 | ) | |||||
Loans assumed in connection with property acquisitions | $ | (47,169 | ) | $ | — | |||||
Supplemental disclosure of cash flow information | ||||||||||
Interest paid | $ | 4,496 | $ | 5,736 | ||||||
F-9
Table of Contents
1. | Organization and Description of Business |
F-10
Table of Contents
1. | Organization and Description of Business — (Continued) |
2. | Summary of Significant Accounting Policies |
F-11
Table of Contents
2. | Summary of Significant Accounting Policies — (Continued) |
Buildings and improvements | 7-40 years | |
On-campus participating properties | 25-34 years (shorter of useful life or respective lease term) | |
Furniture, fixtures and equipment | 3-7 years |
F-12
Table of Contents
2. | Summary of Significant Accounting Policies — (Continued) |
F-13
Table of Contents
2. | Summary of Significant Accounting Policies — (Continued) |
Three Months | |||||
Ended | |||||
March 31, 2005 | |||||
Basic net income per share calculation: | |||||
Income from continuing operations | $ | 2,311 | |||
Discontinued operations1 | 5,881 | ||||
Net income | $ | 8,192 | |||
Income from continuing operations — per share | $ | 0.18 | |||
Income from discontinued operations — per share1 | $ | 0.47 | |||
Net income — per share | $ | 0.65 | |||
Basic weighted average common shares outstanding | 12,622,145 | ||||
Diluted net income per share calculation: | |||||
Income from continuing operations | $ | 2,311 | |||
Add back income allocated to PIU holders | 87 | ||||
Income from continuing operations, as adjusted | 2,398 | ||||
Discontinued operations1 | 5,881 | ||||
Net income, as adjusted | $ | 8,279 | |||
Income from continuing operations — per share | $ | 0.19 | |||
Income from discontinued operations — per share1 | $ | 0.46 | |||
Net income — per share | $ | 0.65 | |||
Basic weighted average common shares outstanding | 12,622,145 | ||||
PIUs | 121,000 | ||||
Restricted stock awards | 26,794 | ||||
Diluted weighted average common shares outstanding | 12,769,939 | ||||
1. | Includes $5.9 million gain on disposition of University Village at San Bernardino. |
3. | Property Acquisitions |
F-14
Table of Contents
3. | Property Acquisitions — (Continued) |
Three Months Ended | ||||||||
March 31, | ||||||||
2005 | 2004 | |||||||
Total revenues | $ | 22,325 | $ | 19,039 | ||||
Net income | $ | 8,413 | $ | 1,477 | ||||
Net income per share — basic and diluted | $ | 0.67 | $ | 0.12 | ||||
4. | Property Disposition and Discontinued Operations |
F-15
Table of Contents
4. | Property Disposition and Discontinued Operations — (Continued) |
Three Months | |||||||||
Ended March 31, | |||||||||
2005 | 2004 | ||||||||
Total revenues | $ | 29 | $ | 820 | |||||
Total operating expenses | (31 | ) | (563 | ) | |||||
Operating (loss) income | (2 | ) | 257 | ||||||
Total nonoperating expenses | — | (312 | ) | ||||||
Net loss | $ | (2 | ) | $ | (55 | ) | |||
March 31, 2005 | December 31, 2004 | |||||||
Cash and cash equivalents | $ | — | $ | 176 | ||||
Other assets | $ | — | $ | 119 | ||||
Land, buildings and improvements, and furniture, fixtures, and equipment, net of accumulated depreciation | $ | — | $ | 22,350 | ||||
Accounts payable and accrued expenses | $ | — | $ | 126 | ||||
Other liabilities | $ | — | $ | 311 | ||||
5. | Investments in Owned Off-Campus Properties |
March 31, 2005 | December 31, 2004 | ||||||||
Owned off-campus properties: | |||||||||
Land | $ | 48,115 | $ | 33,778 | |||||
Buildings and improvements | 328,228 | 219,841 | |||||||
Furniture, fixtures and equipment | 14,099 | 10,104 | |||||||
Construction in progress | 19,848 | 9,087 | |||||||
410,290 | 272,810 | ||||||||
Less accumulated depreciation | (24,931 | ) | (22,710 | ) | |||||
Owned off-campus properties, net | $ | 385,359 | $ | 250,100 | |||||
6. | On-Campus Participating Properties |
F-16
Table of Contents
6. | On-Campus Participating Properties — (Continued) |
Historical Cost | |||||||||||||||||
Lease Commencement/ | Required Debt | March 31, | December 31, | ||||||||||||||
Lessor/University | Expiration | Repayment | 2005 | 2004 | |||||||||||||
Texas A&M University System/ Prairie View A&M University(1) | 2/1/96 / 8/31/38 | 9/1/23 | $ | 37,844 | $ | 37,840 | |||||||||||
Texas A&M University System/ Texas A&M International | 2/1/96 / 8/31/38 | 9/1/23 | 5,908 | 5,909 | |||||||||||||
Texas A&M University System/ Prairie View A&M University(2) | 10/1/99 / 8/31/39 | 8/31/25 / 8/31/28 | 23,680 | 23,663 | |||||||||||||
University of Houston System/ University of Houston — Phase I | 9/27/00 / 8/31/41 | 8/31/35 | 18,127 | 18,123 | |||||||||||||
University of Houston System/ University of Houston — Phase II(3) | 9/27/00 / 8/31/41 | 8/31/35 | 3,896 | 835 | |||||||||||||
89,455 | 86,370 | ||||||||||||||||
Less accumulated amortization | (19,184 | ) | (18,306 | ) | |||||||||||||
On-campus participating properties, net | $ | 70,271 | $ | 68,064 | |||||||||||||
(1) | Consists of three phases placed in service between 1996 and 1998 |
(2) | Consists of two phases placed in service between 2000 and 2003. |
(3) | Phase II is covered under the original Cullen Oaks ground lease. This facility is under development and is scheduled to be placed in service in August 2005. |
7. | Joint Venture and Minority Interests |
F-17
Table of Contents
7. | Joint Venture and Minority Interests — (Continued) |
8. | Debt |
March 31, | December 31, | ||||||||
2005 | 2004 | ||||||||
Debt secured by owned off-campus properties: | |||||||||
Revolving credit facility | $ | 33,600 | $ | 11,800 | |||||
Mortgage and bridge loans payable | 196,127 | 111,974 | |||||||
Debt secured by on-campus participating properties: | |||||||||
Mortgage loan payable | 16,978 | 17,045 | |||||||
Construction loan payable | 3,069 | 540 | |||||||
Bonds payable | 59,655 | 59,655 | |||||||
309,429 | 201,014 | ||||||||
Unamortized debt premiums | 4,956 | — | |||||||
Total debt | $ | 314,385 | $ | 201,014 | |||||
F-18
Table of Contents
8. | Debt — (Continued) |
9. | Incentive Award Plan |
F-19
Table of Contents
9. | Incentive Award Plan — (Continued) |
10. | Interest Rate Hedges |
11. | Commitments and Contingencies |
F-20
Table of Contents
11. | Commitments and Contingencies — (Continued) |
12. | Segments |
F-21
Table of Contents
12. | Segments — (Continued) |
Three Months Ended | ||||||||
March 31, | ||||||||
2005 | 2004 | |||||||
Owned Off-Campus Properties | ||||||||
Rental revenues | $ | 12,692 | $ | 7,989 | ||||
Interest income | 34 | 1 | ||||||
Total revenues from external customers | 12,726 | 7,990 | ||||||
Operating expenses before depreciation and amortization | 5,065 | 3,539 | ||||||
Interest expense | 2,456 | 2,910 | ||||||
Insurance gain | 430 | — | ||||||
Operating income before depreciation and amortization, minority interests and allocation of corporate overhead | $ | 5,635 | $ | 1,541 | ||||
Depreciation and amortization | $ | 2,455 | $ | 1,424 | ||||
Capital expenditures | $ | 10,972 | $ | 19,034 | ||||
Total segment assets at March 31, | $ | 396,663 | $ | 251,215 | ||||
On-Campus Participating Properties | ||||||||
Rental revenues | $ | 5,493 | $ | 5,293 | ||||
Interest income | 25 | 12 | ||||||
Total revenues from external customers | 5,518 | 5,305 | ||||||
Operating expenses before depreciation, amortization, and ground/facility leases | 1,669 | 1,631 | ||||||
Ground/facility leases | 212 | 141 | ||||||
Interest expense | 1,347 | 1,371 | ||||||
Operating income before depreciation and amortization, minority interests and allocation of corporate overhead | $ | 2,290 | $ | 2,162 | ||||
Depreciation and amortization | $ | 880 | $ | 854 | ||||
Capital expenditures | $ | 3,055 | $ | 124 | ||||
Total segment assets at March 31, | $ | 83,423 | $ | 90,654 | ||||
Development Services | ||||||||
Development and construction management fees from external customers | $ | 645 | $ | 1,698 | ||||
Intersegment revenues | 92 | — | ||||||
Total revenues | 737 | 1,698 | ||||||
Operating expenses | $ | 912 | $ | 764 | ||||
Operating (loss) income before depreciation and amortization, minority interests and allocation of corporate overhead | $ | (175 | ) | $ | 934 | |||
Total segment assets at March 31, | $ | 1,406 | $ | 2,258 | ||||
F-22
Table of Contents
12. | Segments — (Continued) |
Three Months Ended | ||||||||
March 31, | ||||||||
2005 | 2004 | |||||||
Property Management Services | ||||||||
Property management fees from external customers | $ | 710 | $ | 372 | ||||
Intersegment revenues | 657 | 497 | ||||||
Total revenues | 1,367 | 869 | ||||||
Operating expenses | 418 | 373 | ||||||
Operating income before depreciation and amortization, minority interests and allocation of corporate overhead | $ | 949 | $ | 496 | ||||
Total segment assets at March 31, | $ | 2,051 | $ | 475 | ||||
Reconciliations | ||||||||
Total segment revenues | $ | 20,348 | $ | 15,862 | ||||
Elimination of intersegment revenues | (749 | ) | (497 | ) | ||||
Total consolidated revenues | $ | 19,599 | $ | 15,365 | ||||
Segment operating income before depreciation, amortization, minority interests and allocation of corporate overhead | $ | 8,699 | $ | 5,133 | ||||
Depreciation and amortization, including amortization of deferred financing costs | 3,670 | 2,403 | ||||||
Net unallocated expenses relating to corporate overhead | 2,529 | 1,166 | ||||||
Income tax provision | 102 | — | ||||||
Minority interests | (87 | ) | 21 | |||||
Income from continuing operations | $ | 2,311 | $ | 1,585 | ||||
Total segment assets | $ | 483,543 | $ | 344,602 | ||||
Unallocated corporate assets | 2,944 | 2,381 | ||||||
Total assets | $ | 486,487 | $ | 346,983 | ||||
13. | Subsequent Events |
F-23
Table of Contents
/s/ Ernst & Young LLP |
F-24
Table of Contents
Company | Predecessor | ||||||||
December 31, 2004 | December 31, 2003 | ||||||||
Assets | |||||||||
Investments in real estate: | |||||||||
On-campus participating properties, net | $ | 68,064 | $ | 69,713 | |||||
On-campus participating property — held for sale | — | 7,976 | |||||||
Owned off-campus properties, net | 250,100 | 222,907 | |||||||
Owned off-campus property — held for sale | 22,350 | — | |||||||
Investments in real estate, net | 340,514 | 300,596 | |||||||
Cash and cash equivalents | 4,050 | 5,227 | |||||||
Restricted cash and short-term investments | 9,816 | 9,503 | |||||||
Student contracts receivable, net | 2,164 | 2,355 | |||||||
Other assets | 11,084 | 12,885 | |||||||
Total assets | $ | 367,628 | $ | 330,566 | |||||
Liabilities and stockholders’ and Predecessor owners’ equity | |||||||||
Liabilities: | |||||||||
Debt | $ | 201,014 | $ | 267,518 | |||||
Note payable secured by leasehold held for sale | — | 8,080 | |||||||
Accounts payable and accrued expenses | 5,443 | 3,966 | |||||||
Other liabilities | 20,294 | 23,092 | |||||||
Total liabilities | 226,751 | 302,656 | |||||||
Minority interests | 2,648 | 252 | |||||||
Commitments and contingencies (Note 14) | |||||||||
Stockholders’ and Predecessor owners’ equity: | |||||||||
Common stock, $.01 par value, 800,000,000 shares authorized, 12,615,000 shares issued and outstanding | 126 | — | |||||||
Additional paid in capital | 136,259 | — | |||||||
Accumulated earnings and distributions | 1,802 | — | |||||||
Accumulated other comprehensive income (loss) | 42 | (197 | ) | ||||||
Predecessor owners’ equity | — | 27,855 | |||||||
Total stockholders’ and Predecessor owners’ equity | 138,229 | 27,658 | |||||||
Total liabilities and stockholders’ and Predecessor owners’ equity | $ | 367,628 | $ | 330,566 | |||||
F-25
Table of Contents
Company | Predecessor | ||||||||||||||||
Period from | Period from | ||||||||||||||||
August 17, 2004 to | January 1, 2004 to | Year Ended | Year Ended | ||||||||||||||
December 31, 2004 | August 16, 2004 | December 31, 2003 | December 31, 2002 | ||||||||||||||
Revenues: | |||||||||||||||||
Owned off-campus properties | $ | 15,254 | $ | 19,861 | $ | 31,514 | $ | 29,997 | |||||||||
On-campus participating properties | 8,078 | 9,340 | 16,482 | 16,055 | |||||||||||||
Third party development services | 1,367 | 3,896 | 7,830 | 3,998 | |||||||||||||
Third party development services – on-campus participating properties | 43 | 497 | 109 | 1,076 | |||||||||||||
Third party management services – affiliates | — | 178 | 335 | 507 | |||||||||||||
Third party management services | 1,138 | 789 | 854 | 438 | |||||||||||||
Resident services | 382 | — | — | — | |||||||||||||
Other income | — | — | 12 | 60 | |||||||||||||
Total revenues | 26,262 | 34,561 | 57,136 | 52,131 | |||||||||||||
Operating expenses: | |||||||||||||||||
Owned off-campus properties | 6,741 | 10,120 | 15,272 | 14,856 | |||||||||||||
On-campus participating properties | 2,604 | 5,296 | 7,925 | 8,101 | |||||||||||||
Third party development and management services | 2,140 | 3,403 | 5,389 | 4,441 | |||||||||||||
General and administrative | 4,202 | 1,032 | 2,749 | 1,995 | |||||||||||||
Depreciation and amortization | 4,158 | 5,815 | 8,868 | 8,077 | |||||||||||||
Ground/facility lease | 214 | 598 | 489 | 643 | |||||||||||||
Total operating expenses | 20,059 | 26,264 | 40,692 | 38,113 | |||||||||||||
Operating income | 6,203 | 8,297 | 16,444 | 14,018 | |||||||||||||
Nonoperating income and (expenses): | |||||||||||||||||
Interest income | 39 | 43 | 71 | 166 | |||||||||||||
Interest expense | (5,556 | ) | (11,142 | ) | (16,940 | ) | (16,421 | ) | |||||||||
Amortization of deferred financing costs | (842 | ) | (369 | ) | (558 | ) | (546 | ) | |||||||||
Other nonoperating income | 653 | 274 | — | — | |||||||||||||
Total nonoperating expenses | (5,706 | ) | (11,194 | ) | (17,427 | ) | (16,801 | ) | |||||||||
Income (loss) before income tax benefit, minority interests, and discontinued operations | 497 | (2,897 | ) | (983 | ) | (2,783 | ) | ||||||||||
Income tax benefit | 728 | — | — | — | |||||||||||||
Minority interests | (29 | ) | 129 | 16 | 30 | ||||||||||||
Income (loss) from continuing operations | 1,196 | (2,768 | ) | (967 | ) | (2,753 | ) | ||||||||||
Discontinued operations: | |||||||||||||||||
Income (loss) attributable to discontinued operations | 606 | (334 | ) | 7 | 319 | ||||||||||||
(Loss) gain from disposition of real estate | — | (39 | ) | 16 | 295 | ||||||||||||
Total discontinued operations | 606 | (373 | ) | 23 | 614 | ||||||||||||
Net income (loss) | $ | 1,802 | $ | (3,141 | ) | $ | (944 | ) | $ | (2,139 | ) | ||||||
Income per share – basic: | |||||||||||||||||
Income from continuing operations per share | $ | 0.10 | |||||||||||||||
Net income per share | $ | 0.14 | |||||||||||||||
Income per share – diluted: | |||||||||||||||||
Income from continuing operations per share | $ | 0.10 | |||||||||||||||
Net income per share | $ | 0.15 | |||||||||||||||
Weighted average common shares outstanding: | |||||||||||||||||
Basic | 12,513,130 | ||||||||||||||||
Diluted | 12,634,130 | ||||||||||||||||
Distributions declared per common share | $ | 0.1651 | |||||||||||||||
F-26
Table of Contents
Accumulated | Accumulated | |||||||||||||||||||||||||||||
Number | Additional | Earnings | Other | Predecessor | ||||||||||||||||||||||||||
of | Common | Paid in | and | Comprehensive | Owners’ | |||||||||||||||||||||||||
Shares | Stock | Capital | Distributions | Income (Loss) | Equity | Total | ||||||||||||||||||||||||
Predecessor | ||||||||||||||||||||||||||||||
Predecessor owners’ equity, December 31, 2001 | — | $ | — | $ | — | $ | — | $ | 29 | $ | 40,542 | $ | 40,571 | |||||||||||||||||
Contributions | — | — | — | — | — | 5,363 | 5,363 | |||||||||||||||||||||||
Distributions | — | — | — | — | — | (8,194 | ) | (8,194 | ) | |||||||||||||||||||||
Comprehensive loss: | ||||||||||||||||||||||||||||||
Expiration of interest rate swap | — | — | — | — | 29 | — | 29 | |||||||||||||||||||||||
Change in fair value of interest rate cap | — | — | — | — | (104 | ) | — | (104 | ) | |||||||||||||||||||||
Net loss | — | — | — | — | — | (2,139 | ) | (2,139 | ) | |||||||||||||||||||||
Total comprehensive loss | — | — | — | — | — | — | (2,214 | ) | ||||||||||||||||||||||
Predecessor owners’ equity, December 31, 2002 | — | — | — | — | (46 | ) | 35,572 | 35,526 | ||||||||||||||||||||||
Contributions | — | — | — | — | — | 3,538 | 3,538 | |||||||||||||||||||||||
Distributions | — | — | — | — | — | (10,311 | ) | (10,311 | ) | |||||||||||||||||||||
Comprehensive loss: | ||||||||||||||||||||||||||||||
Change in fair value of interest rate swap | — | — | — | — | (153 | ) | — | (153 | ) | |||||||||||||||||||||
Change in fair value of interest rate cap | — | — | — | — | 2 | — | 2 | |||||||||||||||||||||||
Net loss | — | — | — | — | — | (944 | ) | (944 | ) | |||||||||||||||||||||
Total comprehensive loss | �� | — | — | — | — | — | (1,095 | ) | ||||||||||||||||||||||
Predecessor owners’ equity December 31, 2003 | — | — | — | — | (197 | ) | 27,855 | 27,658 | ||||||||||||||||||||||
Contributions | — | — | — | — | — | 860 | 860 | |||||||||||||||||||||||
Distributions | — | — | — | — | — | (2,212 | ) | (2,212 | ) | |||||||||||||||||||||
Distribution of the Village at Riverside and other non-core assets to Predecessor owners | — | — | — | — | — | (2,005 | ) | (2,005 | ) | |||||||||||||||||||||
Comprehensive loss: | ||||||||||||||||||||||||||||||
Change in fair value of interest rate swap | — | — | — | — | 3 | — | 3 | |||||||||||||||||||||||
Net loss | — | — | — | — | — | (3,141 | ) | (3,141 | ) | |||||||||||||||||||||
Total comprehensive loss | — | — | — | — | — | — | (3,138 | ) | ||||||||||||||||||||||
Predecessor owners’ equity, August 16, 2004 | — | $ | — | $ | — | $ | — | $ | (194 | ) | $ | 21,357 | $ | 21,163 | ||||||||||||||||
Company | ||||||||||||||||||||||||||||||
Reclassify Predecessor owners’ equity | — | $ | — | $ | 21,357 | $ | — | $ | — | $ | (21,357 | ) | $ | — | ||||||||||||||||
Net proceeds from sale of common stock | 12,615,000 | 126 | 197,694 | — | — | — | 197,820 | |||||||||||||||||||||||
Issuance of fully vested restricted stock units | — | — | 125 | — | — | — | 125 | |||||||||||||||||||||||
Fair value of profits interest units granted | — | — | 2,117 | — | — | — | 2,117 | |||||||||||||||||||||||
Record minority interests for profits interest units | — | — | (1,424 | ) | — | — | — | (1,424 | ) | |||||||||||||||||||||
Redemption of ownership interest of Predecessor owners | — | — | (80,127 | ) | — | — | — | (80,127 | ) | |||||||||||||||||||||
Distributions to Predecessor owners | — | — | (1,399 | ) | — | — | — | (1,399 | ) | |||||||||||||||||||||
Distributions to common stockholders | — | — | (2,084 | ) | — | — | — | (2,084 | ) | |||||||||||||||||||||
Comprehensive income: | ||||||||||||||||||||||||||||||
Change in fair value of interest rate swap | — | — | — | — | 191 | — | 191 | |||||||||||||||||||||||
Expiration of interest rate cap | — | — | — | — | 45 | — | 45 | |||||||||||||||||||||||
Net income | — | — | — | 1,802 | — | — | 1,802 | |||||||||||||||||||||||
Total comprehensive income | — | — | — | — | — | — | 2,038 | |||||||||||||||||||||||
Stockholders’ equity, December 31, 2004 | 12,615,000 | $ | 126 | $ | 136,259 | $ | 1,802 | $ | 42 | $ | — | $ | 138,229 | |||||||||||||||||
F-27
Table of Contents
Period from | Period from | |||||||||||||||||
August 17, 2004 | January 1, 2004 | Year Ended | Year Ended | |||||||||||||||
to December 31, | to August 16, | December 31, | December 31, | |||||||||||||||
2004 | 2004 | 2003 | 2002 | |||||||||||||||
Operating activities | ||||||||||||||||||
Net income (loss) | $ | 1,802 | $ | (3,141 | ) | $ | (944 | ) | $ | (2,139 | ) | |||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||||||||||||
Depreciation and amortization | 4,395 | 5,949 | 9,214 | 8,411 | ||||||||||||||
Amortization of deferred financing costs | 933 | 421 | 587 | 564 | ||||||||||||||
Compensation expense recognized for award of profits interest units and restricted stock units | 2,242 | — | — | — | ||||||||||||||
Income tax benefit | (728 | ) | — | — | — | |||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||||
Restricted cash and short-term investments | 4,385 | (5,016 | ) | (2,036 | ) | (140 | ) | |||||||||||
Student contracts receivable, net | (727 | ) | 860 | (378 | ) | 355 | ||||||||||||
Other assets | 786 | 2,320 | (265 | ) | (1,269 | ) | ||||||||||||
Accounts payable and accrued expenses | (910 | ) | 2,591 | (421 | ) | 1,335 | ||||||||||||
Other liabilities | 199 | 932 | 1,105 | 530 | ||||||||||||||
Net cash provided by operating activities | 12,377 | 4,916 | 6,862 | 7,647 | ||||||||||||||
Investing activities | ||||||||||||||||||
Investments in on-campus participating properties | (1,316 | ) | (565 | ) | (3,788 | ) | (396 | ) | ||||||||||
Student housing facility subject to lease-held for sale | — | — | (7,976 | ) | — | |||||||||||||
Investments in owned off-campus properties | (13,220 | ) | (47,900 | ) | (21,777 | ) | (20,901 | ) | ||||||||||
Purchase of furniture, fixtures and equipment | (401 | ) | (219 | ) | (197 | ) | (381 | ) | ||||||||||
Net cash used in investing activities | (14,937 | ) | (48,684 | ) | (33,738 | ) | (21,678 | ) | ||||||||||
Financing activities | ||||||||||||||||||
Proceeds from short-term loans, net of paydowns | (1,870 | ) | 1,796 | (716 | ) | 790 | ||||||||||||
Proceeds from revolving credit facility, net of paydowns | 11,800 | — | — | — | ||||||||||||||
Repayment of long-term debt | (107,149 | ) | (1,403 | ) | (2,997 | ) | (33,502 | ) | ||||||||||
Repayment of notes payable – related parties | — | — | (1,000 | ) | (1,096 | ) | ||||||||||||
Proceeds from long-term debt | 540 | 41,170 | 29,605 | 47,969 | ||||||||||||||
Proceeds from notes payable – related parties | — | — | 1,020 | 607 | ||||||||||||||
Change in construction accounts payable | (6,860 | ) | 2,044 | 3,943 | 3 | |||||||||||||
Issuance of common stock | 220,763 | — | — | — | ||||||||||||||
Debt issuance and offering costs | (21,855 | ) | (3,001 | ) | (1,513 | ) | (447 | ) | ||||||||||
Distributions to common stockholders and holders of profits interest units | (2,104 | ) | — | — | — | |||||||||||||
Contributions from Predecessor owners | — | 860 | 3,538 | 5,363 | ||||||||||||||
Distributions to Predecessor owners | (1,399 | ) | (2,212 | ) | (10,311 | ) | (8,194 | ) | ||||||||||
Redemption of ownership interests of Predecessor owners | (85,853 | ) | — | — | — | |||||||||||||
Minority interests | (11 | ) | (105 | ) | (32 | ) | 153 | |||||||||||
Net cash provided by financing activities | 6,002 | 39,149 | 21,537 | 11,646 | ||||||||||||||
Net change in cash and cash equivalents | 3,442 | (4,619 | ) | (5,339 | ) | (2,385 | ) | |||||||||||
Cash and cash equivalents at beginning of period | 608 | 5,227 | 10,566 | 12,951 | ||||||||||||||
Cash and cash equivalents at end of period | $ | 4,050 | $ | 608 | $ | 5,227 | $ | 10,566 | ||||||||||
Supplemental disclosure of non-cash investing and financing activities | ||||||||||||||||||
Reduction of investment in student housing due to fire | $ | — | $ | — | $ | (3,750 | ) | $ | — | |||||||||
Financing of equipment through capital lease obligations | $ | 69 | $ | 302 | $ | 117 | $ | 278 | ||||||||||
Change in fair value of derivative instruments, net | $ | (134 | ) | $ | 373 | $ | (151 | ) | $ | (76 | ) | |||||||
Transfer of leasehold asset | $ | — | $ | 7,976 | $ | — | $ | — | ||||||||||
Repayment by transferee of note payable on leasehold asset held for sale | $ | — | $ | (8,080 | ) | $ | — | $ | — | |||||||||
Contribution of land from minority partner in development joint venture | $ | 1,220 | $ | — | $ | — | $ | — | ||||||||||
Distribution of assets of The Village at Riverside and other non-core assets to Predecessor owners | $ | (13,845 | ) | $ | — | $ | — | $ | — | |||||||||
Distribution of liabilities of The Village at Riverside and other non-core assets to Predecessor owners | $ | 11,840 | $ | — | $ | — | $ | — | ||||||||||
Supplemental disclosure of cash flow information | ||||||||||||||||||
Interest paid | $ | 7,657 | $ | 9,960 | $ | 17,665 | $ | 17,237 | ||||||||||
Income taxes paid | $ | 67 | $ | — | $ | — | $ | — | ||||||||||
F-28
Table of Contents
1. | Organization and Description of Business |
F-29
Table of Contents
2. | Summary of Significant Accounting Policies |
F-30
Table of Contents
2. | Summary of Significant Accounting Policies — (Continued) |
F-31
Table of Contents
2. | Summary of Significant Accounting Policies — (Continued) |
a. | Management, having the authority to approve the action, commits to a plan to sell the asset |
b. | The asset is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets |
c. | An active program to locate a buyer and other actions required to complete the plan to sell the asset have been initiated |
d. | The sale of the asset is probable, and transfer of the asset is expected to qualify for recognition as a completed sale, within one year |
e. | The asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value |
f. | Actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. |
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2. | Summary of Significant Accounting Policies — (Continued) |
Balance, Beginning | Charged to | Balance, End | ||||||||||||||
of Period | Expense | Write-Offs | of Period | |||||||||||||
Year ended December 31, 2002 | $ | 894 | $ | 738 | $ | (56 | ) | $ | 1,576 | |||||||
Year ended December 31, 2003 | $ | 1,576 | $ | 584 | $ | (103 | ) | $ | 2,057 | |||||||
Year ended December 31, 2004 | $ | 2,057 | $ | 646 | $ | (1,851 | )(1) | $ | 852 |
(1) | In 2004, the Company wrote off essentially all receivables that were 100% reserved. |
F-33
Table of Contents
2. | Summary of Significant Accounting Policies — (Continued) |
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2. | Summary of Significant Accounting Policies — (Continued) |
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2. | Summary of Significant Accounting Policies — (Continued) |
3. | Earnings per Share |
Period from | |||||
August 17, 2004 | |||||
through | |||||
December 31, 2004 | |||||
Basic net income per share calculation: | |||||
Income from continuing operations | $ | 1,196 | |||
Discontinued operations | 606 | ||||
Net income | $ | 1,802 | |||
Income from continuing operations – per share | $ | 0.10 | |||
Income from discontinued operations – per share | $ | 0.04 | |||
Net income – per share | $ | 0.14 | |||
Basic weighted average common shares outstanding | 12,513,130 | ||||
Diluted net income per share calculation: | |||||
Income from continuing operations | $ | 1,196 | |||
Add back income allocated to PIU holders | 30 | ||||
Income from continuing operations, as adjusted | 1,226 | ||||
Discontinued operations | 606 | ||||
Net income, as adjusted | $ | 1,832 | |||
Income from continuing operations – per share | $ | 0.10 | |||
Income from discontinued operations – per share | $ | 0.05 | |||
Net income – per share | $ | 0.15 | |||
Basic weighted average common shares outstanding | 12,513,130 | ||||
PIUs | 121,000 | ||||
Diluted weighted average common shares outstanding | 12,634,130 | ||||
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December 31, 2004 | |||||
Deferred tax assets: | |||||
Fixed and intangible assets | $ | 11,742 | |||
Net operating loss carryforward | 343 | ||||
Prepaid and deferred rent | 175 | ||||
Bad debt reserves | 46 | ||||
Accrued expenses | 21 | ||||
Total deferred tax assets | 12,327 | ||||
Valuation allowance for deferred tax assets | (10,696 | ) | |||
Deferred tax assets, net of valuation allowance | 1,631 | ||||
Deferred tax liability: | |||||
Deferred financing costs | 903 | ||||
Net deferred tax assets | $ | 728 | |||
Period from | |||||
August 17, 2004 | |||||
through | |||||
December 31, 2004 | |||||
Deferred: | |||||
Federal | $ | 660 | |||
State | 68 | ||||
Total (total income tax benefit from continuing operations) | $ | 728 | |||
Period from | ||||
August 17, 2004 to | ||||
December 31, 2004 | ||||
Tax at U.S. statutory rates on TRS income subject to tax | $ | (132 | ) | |
State income tax, net of federal income tax benefit | (14 | ) | ||
Effect of permanent differences | (8 | ) | ||
Decrease in valuation allowance | 217 | |||
Initial adoption of SFAS No. 109 | 665 | |||
Income tax benefit | $ | 728 | ||
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4. | Income Taxes — (Continued) |
5. | Investments in Owned Off-Campus Properties |
December 31, | |||||||||
2004 | 2003 | ||||||||
Owned off-campus properties: | |||||||||
Land | $ | 33,778 | $ | 35,434 | |||||
Buildings and improvements | 219,841 | 175,436 | |||||||
Furniture, fixtures and equipment | 10,104 | 6,673 | |||||||
Construction in progress | 9,087 | 22,961 | |||||||
272,810 | 240,504 | ||||||||
Less accumulated depreciation | (22,710 | ) | (17,597 | ) | |||||
Owned off-campus properties, net | $ | 250,100 | $ | 222,907 | |||||
6. | On-Campus Participating Properties |
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6. | On-Campus Participating Properties — (Continued) |
Historical Cost | ||||||||||||||||||||||||
December 31, | ||||||||||||||||||||||||
Lease Commencement/ | Required Debt | |||||||||||||||||||||||
Lessor/University | Expiration | Repayment | 2004 | 2003 | ||||||||||||||||||||
Texas A&M University System/ Prairie View A&M University(1) | 2/1/96 | / | 8/31/38 | 9/1/23 | $ | 37,840 | $ | 37,368 | ||||||||||||||||
Texas A&M University System/ Texas A&M International | 2/1/96 | / | 8/31/38 | 9/1/23 | 5,909 | 5,889 | ||||||||||||||||||
Texas A&M University System/ Prairie View A&M University(2) | 10/1/99 | / | 8/31/39 | 8/31/25 / 8/31/28 | 23,663 | 23,366 | ||||||||||||||||||
University of Houston System/ University of Houston – Phase I | 9/27/00 | / | 8/31/41 | 8/31/35 | 18,123 | 17,864 | ||||||||||||||||||
University of Houston System/ University of Houston – Phase II(3) | 9/27/00 | / | 8/31/41 | 8/31/35 | 835 | — | ||||||||||||||||||
86,370 | 84,487 | |||||||||||||||||||||||
Less accumulated amortization | (18,306 | ) | (14,774 | ) | ||||||||||||||||||||
On-campus participating properties, net | $ | 68,064 | $ | 69,713 | ||||||||||||||||||||
(1) | Consists of three phases placed in service between 1996 and 1998 |
(2) | Consists of two phases placed in service between 2000 and 2003. |
(3) | Phase II is covered under the original Cullen Oaks ground lease. This facility is under development and is scheduled to be placed in service in August 2005. |
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6. | On-Campus Participating Properties — (Continued) |
7. | Joint Venture and Minority Interests |
8. | Debt |
December 31, | |||||||||
2004 | 2003 | ||||||||
Debt secured by owned off-campus properties: | |||||||||
Revolving credit facility and short-term notes payable | $ | 11,800 | $ | 74 | |||||
Mortgage loans payable | 111,974 | 170,780 | |||||||
Construction loans payable | — | 26,447 | |||||||
Debt secured by on-campus participating properties: | |||||||||
Mortgage loan payable | 17,045 | 17,287 | |||||||
Construction loan payable | 540 | — | |||||||
Bonds payable | 59,655 | 61,010 | |||||||
Total debt | $ | 201,014 | $ | 275,598 | |||||
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8. | Debt — (Continued) |
Year Ended | |||||
December 31, 2004 | |||||
Balance, beginning of period | $ | 275,598 | |||
Additions | |||||
Draws on lines of credit, net of payoffs | 11,726 | ||||
Draws under advancing construction loans | 41,170 | ||||
Closing of new construction loan for leasehold property(1) | 540 | ||||
Deductions: | |||||
Scheduled repayments of principal | (3,053 | ) | |||
Repayment of note payable secured by leasehold held for sale | (8,080 | ) | |||
Reduction in debt due to distribution of assets in connection with IPO | (11,388 | ) | |||
Repayment of construction loans in connection with IPO | (59,537 | ) | |||
Repayment of mortgage loans in connection with IPO | (45,962 | ) | |||
$ | 201,014 | ||||
(1) | In December 2004, the Company obtained a new construction loan to fund the development and construction of Cullen Oaks — Phase II, a leasehold facility scheduled to open in August 2005. The loan has a term of 18 months and bears interest, at the Company’s option, at either Prime (5.25% at December 31, 2004) or LIBOR plus 2.0% (4.4% at December 31, 2004). |
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8. | Debt — (Continued) |
Interest Rate at | ||||||||||||||||||
Principal | Stated | December 31, | ||||||||||||||||
Property | Outstanding(3) | Interest Rate | 2004 | Maturity Date | Amortization | |||||||||||||
Cullen Oaks(1) | $ | 17,045 | LIBOR +1.90% | 5.54 | % | November 2008 | 30 years | |||||||||||
Cullen Oaks — Phase II(2) | 540 | (2) | 4.41 | % | June 2006 | n/a | ||||||||||||
University Village at Boulder Creek | 16,540 | 5.71% | 5.71 | % | November 2012 | 30 years | ||||||||||||
River Club Apartments | 18,533 | 8.18% | 8.18 | % | August 2010 | 30 years | ||||||||||||
River Walk Townhomes | 7,683 | 8.00% | 8.00 | % | September 2009 | 30 years | ||||||||||||
Village at Alafaya Club | 20,474 | 8.16% | 8.16 | % | August 2010 | (4) | 30 years | |||||||||||
Village at Blacksburg | 21,352 | 7.50% | 7.50 | % | January 2011 | 30 years | ||||||||||||
Commons on Apache | 7,668 | 7.66% | 7.66 | % | June 2009 | 30 years | ||||||||||||
Callaway House | 19,724 | 7.10% | 7.10 | % | April 2011 | 30 years | ||||||||||||
Total | $ | 129,559 | Wtd Avg Rate | 7.18 | % | |||||||||||||
(1) | Floating rate on this mortgage loan was swapped to a fixed rate of 5.54%. This swap terminates in November 2008, at which time the interest rate will revert back to a variable rate. The TRS has guaranteed payment of this indebtedness. |
(2) | Construction loan was obtained in December 2004. For each borrowing, the Company has the option of choosing either a Prime rate or LIBOR plus 2.0%. The Company has an option to extend the maturity of this loan through November 2008. The TRS has guaranteed this indebtedness, up to a limit of $4.0 million of construction loan principal plus interest and litigation fees potentially incurred by the lender. This guaranty will remain in effect until the balance on the related construction loan is paid in full. |
(3) | For federal income tax purposes, the aggregate cost of the loans is equal to the carrying amount. |
(4) | Represents the Anticipated Repayment Date, as defined in the loan agreement. If the loan is not repaid on the Anticipated Repayment Date, then certain monthly payments including excess cash flow, as defined, become due through the maturity date of August 2030. |
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8. | Debt — (Continued) |
Principal | Weighted | Required | ||||||||||||||||||
December 31, | Average | Monthly | ||||||||||||||||||
Series | Mortgaged Facilities Subject to Leases | Original | 2004 | Rate | Maturity Through | Debt Service | ||||||||||||||
1999 | University Village-PVAMU/ TAMIU | $ | 39,270 | $ | 35,570 | 7.50% | September 2023 | $ | 302 | |||||||||||
2001 | University College–PVAMU | 20,995 | 19,855 | 7.40% | August 2025 | 158 | ||||||||||||||
2003 | University College–PVAMU | 4,325 | 4,230 | 5.90% | August 2028 | 28 | ||||||||||||||
Total/weighted average rate | $ | 64,590 | $ | 59,655 | 7.35% | $ | 488 | |||||||||||||
Scheduled | Due at | |||||||||||
Principal | Maturity | Total | ||||||||||
2005 | $ | 3,001 | $ | — | $ | 3,001 | ||||||
2006 | 3,216 | 540 | 3,756 | |||||||||
2007 | 15,241 | — | 15,241 | |||||||||
2008 | 3,617 | 15,972 | 19,589 | |||||||||
2009 | 3,511 | 14,389 | 17,900 | |||||||||
Thereafter | 69,580 | 71,947 | 141,527 | |||||||||
$ | 98,166 | $ | 102,848 | $ | 201,014 | |||||||
9. | Incentive Award Plan |
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9. | Incentive Award Plan — (Continued) |
F-44
Table of Contents
10. | Interest Rate Hedges |
11. | Related Party Transactions |
12. | Lease Commitments |
F-45
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12. | Lease Commitments — (Continued) |
Operating | Capital | |||||||
2005 | $ | 527 | $ | 275 | ||||
2006 | 509 | 182 | ||||||
2007 | 482 | 135 | ||||||
2008 | 478 | 95 | ||||||
2009 | 480 | 28 | ||||||
Thereafter | 7,334 | — | ||||||
Total minimum lease payments | 9,810 | 715 | ||||||
Amount representing interest | — | 117 | ||||||
Balance of minimum lease payments | $ | 9,810 | $ | 598 | ||||
13. | Concentration of Risks |
14. | Commitments and Contingencies |
F-46
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14. | Commitments and Contingencies — (Continued) |
F-47
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14. | Commitments and Contingencies — (Continued) |
15. | Discontinued Operations |
Year Ended December 31, | |||||||||||||
2004 | 2003 | 2002 | |||||||||||
Total revenues | $ | 2,767 | $ | 2,769 | $ | 2,932 | |||||||
Total operating expenses | 1,738 | 1,776 | 1,625 | ||||||||||
Operating income | 1,029 | 993 | 1,307 | ||||||||||
Total nonoperating expenses | 757 | 986 | 988 | ||||||||||
Net income | $ | 272 | $ | 7 | $ | 319 | |||||||
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15. | Discontinued Operations — (Continued) |
December 31, | ||||||||
2004 | 2003 | |||||||
Cash and cash equivalents | $ | 176 | $ | 403 | ||||
Other assets | $ | 119 | $ | 1,112 | ||||
Land, buildings and improvements, and furniture, fixtures, and equipment, net of accumulated depreciation | $ | 22,350 | $ | 31,013 | ||||
Accounts payable and accrued expenses | $ | 126 | $ | 490 | ||||
Notes payable | $ | — | $ | 25,811 | ||||
Other liabilities | $ | 311 | $ | 513 | ||||
16. | Segments |
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16. | Segments — (Continued) |
Year Ended December 31, | ||||||||||||
2004 | 2003 | 2002 | ||||||||||
Owned Off-Campus Properties | ||||||||||||
Rental revenues | $ | 35,497 | $ | 31,499 | $ | 29,702 | ||||||
Interest and other income | 21 | — | 47 | |||||||||
Total revenues from external customers | 35,518 | 31,499 | 29,749 | |||||||||
Operating expenses before depreciation and amortization | 15,597 | 14,583 | 13,893 | |||||||||
Interest expense | 11,049 | 11,700 | 11,070 | |||||||||
Insurance gain | 654 | — | — | |||||||||
Operating income before depreciation, amortization, minority interests and allocation of corporate overhead | $ | 9,526 | $ | 5,216 | $ | 4,786 | ||||||
Depreciation and amortization | $ | 6,520 | $ | 5,667 | $ | 5,081 | ||||||
Capital expenditures | $ | 61,120 | $ | 21,777 | $ | 20,901 | ||||||
Total segment assets at December 31, | $ | 269,643 | $ | 201,676 | $ | 206,659 | ||||||
On-Campus Participating Properties | ||||||||||||
Rental revenues | $ | 17,418 | $ | 16,482 | $ | 16,055 | ||||||
Interest and other income | 61 | 27 | 67 | |||||||||
Total revenues from external customers | 17,479 | 16,509 | 16,122 | |||||||||
Operating expenses before depreciation, amortization, and ground/facility lease | 7,381 | 7,411 | 7,124 | |||||||||
Ground/facility lease | 812 | 489 | 643 | |||||||||
Interest expense | 5,469 | 5,181 | 5,191 | |||||||||
Insurance gain | 273 | — | — | |||||||||
Operating income before depreciation, amortization, minority interests and allocation of corporate overhead | $ | 4,090 | $ | 3,428 | $ | 3,164 | ||||||
Depreciation and amortization | $ | 3,532 | $ | 3,271 | $ | 3,152 | ||||||
Capital expenditures | $ | 1,881 | $ | 3,788 | $ | 396 | ||||||
Total segment assets at December 31, | $ | 79,686 | $ | 89,502 | $ | 79,501 | ||||||
Development Services | ||||||||||||
Development and construction management fees from external customers | $ | 5,803 | $ | 8,010 | $ | 5,481 | ||||||
Intersegment revenues | 234 | 456 | 222 | |||||||||
Total revenues | 6,037 | 8,466 | 5,703 | |||||||||
Operating expenses | 3,796 | 3,854 | 3,934 | |||||||||
Operating income before depreciation, amortization, minority interests and allocation of corporate overhead | $ | 2,241 | $ | 4,612 | $ | 1,769 | ||||||
Total segment assets at December 31, | $ | 12,879 | $ | 34,639 | $ | 13,807 | ||||||
Property Management Services | ||||||||||||
Property management fees from external customers | $ | 2,105 | $ | 1,189 | $ | 945 | ||||||
Intersegment revenues | 1,152 | 983 | 930 | |||||||||
Total revenues | 3,257 | 2,172 | 1,875 | |||||||||
Operating expenses | 1,480 | 1,523 | 1,675 | |||||||||
Operating income before depreciation, amortization, minority interests and allocation of corporate overhead | $ | 1,777 | $ | 649 | $ | 200 | ||||||
Total segment assets at December 31, | $ | 1,141 | $ | 615 | $ | 261 | ||||||
Reconciliations | ||||||||||||
Total segment revenues | $ | 62,291 | $ | 58,646 | $ | 53,449 | ||||||
Elimination of intersegment revenues | (1,386 | ) | (1,439 | ) | (1,152 | ) | ||||||
Total consolidated revenues | $ | 60,905 | $ | 57,207 | $ | 52,297 | ||||||
Segment operating income before depreciation, amortization, minority interests and allocation of corporate overhead | $ | 17,634 | $ | 13,905 | $ | 9,919 | ||||||
Depreciation and amortization | 11,184 | 9,426 | 8,623 | |||||||||
Net unallocated expenses relating to corporate overhead | 8,850 | 5,462 | 4,079 | |||||||||
Income tax benefit | 728 | — | — | |||||||||
Minority interests | 100 | 16 | 30 | |||||||||
Loss from continuing operations | $ | (1,572 | ) | $ | (967 | ) | $ | (2,753 | ) | |||
Total segment assets | $ | 363,349 | $ | 326,432 | $ | 300,228 | ||||||
Unallocated corporate assets | 4,279 | 4,134 | 7,430 | |||||||||
Total assets | $ | 367,628 | $ | 330,566 | $ | 307,658 | ||||||
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17. | Quarterly Financial Information (Unaudited) |
2004 | ||||||||||||||||||||
1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter | Total | ||||||||||||||||
Total revenues | $ | 16,172 | $ | 14,331 | $ | 13,971 | $ | 19,116 | $ | 63,590 | (1) | |||||||||
Net income (loss) | $ | 1,529 | $ | (1,001 | ) | $ | (5,208 | ) | $ | 3,341 | $ | (1,339 | ) | |||||||
Net income per share-basic | $ | — | $ | — | $ | — | $ | 0.26 | $ | 0.14 | (2) | |||||||||
Net income per share-diluted | $ | — | $ | — | $ | — | $ | 0.26 | $ | 0.15 | (2) | |||||||||
2003 | ||||||||||||||||||||
1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter | Total | ||||||||||||||||
Total revenues | $ | 15,647 | $ | 14,083 | $ | 14,026 | $ | 16,167 | $ | 59,923 | (1) | |||||||||
Net income (loss) | $ | 1,347 | $ | (370 | ) | $ | (1,544 | ) | $ | (377 | ) | $ | (944 | ) | ||||||
(1) | Includes revenues from discontinued operations of $2.8 million for each of the years ended December 31, 2004 and 2003. |
(2) | Represents the period from August 17, 2004 (IPO date) through December 31, 2004. |
18. | Subsequent Events |
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19. | Schedule of Real Estate and Accumulated Depreciation |
Initial Costs | Basis Step-Up | Total Costs | ||||||||||||||||||||||||||||||||||||||||||||||||||
Buildings and | Buildings and | Buildings and | ||||||||||||||||||||||||||||||||||||||||||||||||||
Improvements | Improvements | Costs | Improvements | |||||||||||||||||||||||||||||||||||||||||||||||||
and | and | Capitalized | and | |||||||||||||||||||||||||||||||||||||||||||||||||
Furniture, | Furniture, | Subsequent | Furniture, | Depreciation | ||||||||||||||||||||||||||||||||||||||||||||||||
Fixtures and | Fixtures and | to | Fixtures and | Accumulated | ||||||||||||||||||||||||||||||||||||||||||||||||
Units | Beds | Land | Equipment | Land | Equipment | Acquisition | Land | Equipment | Total(4) | (1) | Encumbrances | Year Built | ||||||||||||||||||||||||||||||||||||||||
Owned Off-campus Properties | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Commons on Apache | 111 | 444 | $ | 1,464 | $ | 8,072 | $ | — | $ | — | $ | 1,163 | $ | 1,464 | $ | 9,235 | $ | 10,699 | $ | 1,826 | $ | 7,668 | 1987 | |||||||||||||||||||||||||||||
The Village at Blacksburg | 288 | 1,056 | 3,826 | 22,155 | — | — | 1,353 | 3,826 | 23,508 | 27,334 | 2,797 | 21,352 | 1990/1998 | |||||||||||||||||||||||||||||||||||||||
The Village on University | 288 | 918 | 5,508 | 31,264 | — | — | 1,104 | 5,508 | 32,368 | 37,876 | 4,698 | — | 1998 | |||||||||||||||||||||||||||||||||||||||
River Club Apartments | 266 | 794 | 3,478 | 19,655 | — | — | 660 | 3,478 | 20,315 | 23,793 | 3,151 | 18,533 | 1996 | |||||||||||||||||||||||||||||||||||||||
River Walk Townhomes | 100 | 340 | 1,442 | 8,194 | — | — | 292 | 1,442 | 8,486 | 9,928 | 1,312 | 7,683 | 1998 | |||||||||||||||||||||||||||||||||||||||
The Callaway House | 173 | 538 | 5,081 | 20,499 | — | — | 498 | 5,081 | 20,997 | 26,078 | 2,615 | 19,724 | 1999 | |||||||||||||||||||||||||||||||||||||||
The Village at Alafaya Club | 228 | 840 | 3,788 | 21,851 | — | — | 531 | 3,788 | 22,382 | 26,170 | 2,793 | 20,474 | 1999 | |||||||||||||||||||||||||||||||||||||||
The Village at Science Drive | 192 | 732 | 4,673 | �� | 19,021 | — | — | 125 | 4,673 | 19,146 | 23,819 | 1,636 | — | 2000 | ||||||||||||||||||||||||||||||||||||||
University Village at Boulder Creek | 82 | 309 | 939 | 14,887 | 96 | 1,506 | 443 | 1,035 | 16,836 | 17,871 | 1,211 | 16,540 | 2002 | |||||||||||||||||||||||||||||||||||||||
University Village at Fresno | 105 | 406 | 900 | 6,838 | 29 | 483 | 8,232 | 929 | 15,553 | 16,482 | 197 | — | 2004 | |||||||||||||||||||||||||||||||||||||||
Univ. Village at San Bernardino(5) | 132 | 480 | 1,836 | 7,701 | 95 | 1,000 | 11,871 | 1,931 | 20,572 | 22,503 | 153 | — | 2004 | |||||||||||||||||||||||||||||||||||||||
University Village at TU | 220 | 749 | — | 8,876 | — | 2,380 | 29,863 | — | 41,119 | 41,119 | 474 | — | 2004 | |||||||||||||||||||||||||||||||||||||||
University Village at Sweet Home(2) | 269 | 828 | 2,554 | — | — | — | 9,087 | 2,554 | 9,087 | 11,641 | — | — | 2005 | |||||||||||||||||||||||||||||||||||||||
Subtotal | 2,454 | 8,434 | $ | 35,489 | $ | 189,013 | $ | 220 | $ | 5,369 | $ | 65,222 | $ | 35,709 | $ | 259,604 | $ | 295,313 | $ | 22,863 | $ | 111,974 | ||||||||||||||||||||||||||||||
On-Campus Participating Properties | ||||||||||||||||||||||||||||||||||||||||||||||||||||
University Village — PVAMU | 612 | 1,920 | $ | — | $ | 36,506 | $ | — | $ | — | $ | 1,334 | $ | — | $ | 37,840 | $ | 37,840 | $ | 10,639 | $ | 30,851 | 1996/97/98 | |||||||||||||||||||||||||||||
University Village — TAMIU | 84 | 252 | — | 5,844 | — | — | 65 | — | 5,909 | 5,909 | 1,682 | 4,719 | 1997 | |||||||||||||||||||||||||||||||||||||||
University College — PVAMU | 756 | 1,470 | — | 22,650 | — | — | 1,013 | — | 23,663 | 23,663 | 3,749 | 24,085 | 2000/2003 | |||||||||||||||||||||||||||||||||||||||
Cullen Oaks Phase I | 231 | 525 | — | 17,642 | — | — | 481 | — | 18,123 | 18,123 | 2,236 | 17,045 | 2001 | |||||||||||||||||||||||||||||||||||||||
Cullen Oaks Phase II(3) | 180 | 354 | — | — | — | — | 835 | — | 835 | 835 | — | 540 | 2005 | |||||||||||||||||||||||||||||||||||||||
Subtotal | 1,863 | 4,521 | — | 82,642 | — | — | 3,728 | — | 86,370 | 86,370 | 18,306 | 77,240 | ||||||||||||||||||||||||||||||||||||||||
Total-all properties | 4,317 | 12,955 | $ | 35,489 | $ | 271,655 | $ | 220 | $ | 5,369 | $ | 68,950 | $ | 35,709 | $ | 345,974 | $ | 381,683 | $ | 41,169 | $ | 189,214 | ||||||||||||||||||||||||||||||
(1) | The depreciable lives for buildings and improvements and furniture, fixtures and equipment range from three to forty years. |
(2) | University Village at Sweet Home is owned through a joint venture and commenced construction in August 2004. Costs capitalized subsequent to acquisition represent construction costs associated with the development of this property. Year built represents the scheduled completion date. |
(3) | Cullen Oaks Phase II is a leasehold property that commenced construction in December 2004. Costs capitalized subsequent to acquisition represent construction costs associated with the development of this property. Year built represents the scheduled completion date. |
(4) | Total aggregate costs for Federal income tax purposes is $458.4 million. |
(5) | University Village at San Bernardino was sold in January 2005. See note 18. |
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The changes in the Company’s and the Predecessor’s investments in real estate and related accumulated depreciation for each of the years ended December 31, 2004, 2003, and 2002 are as follows: |
For the Year Ended December 31, | |||||||||||||||||||||||||
2004 | 2003 | 2002 | |||||||||||||||||||||||
Off-campus(1) | On-campus(2) | Off-campus(1) | On-campus(2) | Off-campus(1) | On-campus(2) | ||||||||||||||||||||
Investments in Real Estate: | |||||||||||||||||||||||||
Balance, beginning of year | $ | 240,504 | $ | 92,463 | $ | 222,162 | $ | 80,699 | $ | 200,886 | $ | 80,304 | |||||||||||||
Basis step-up | 5,589 | — | — | — | — | — | |||||||||||||||||||
Acquisition of land for development | 2,532 | — | — | — | — | — | |||||||||||||||||||
Improvements and development expenditures | 61,286 | 1,883 | 19,267 | 11,764 | 21,276 | 437 | |||||||||||||||||||
Disposition of properties | — | (7,976 | ) | (925 | ) | — | — | (42 | ) | ||||||||||||||||
Distribution of non-core assets to Predecessor owners | (14,598 | ) | — | — | — | — | — | ||||||||||||||||||
Balance, end of year | $ | 295,313 | $ | 86,370 | $ | 240,504 | $ | 92,463 | $ | 222,162 | $ | 80,699 | |||||||||||||
Accumulated Depreciation: | |||||||||||||||||||||||||
Balance, beginning of year | $ | (17,597 | ) | $ | (14,774 | ) | $ | (11,930 | ) | $ | (11,503 | ) | $ | (6,849 | ) | $ | (8,351 | ) | |||||||
Depreciation for the year | (6,520 | ) | (3,532 | ) | (5,667 | ) | (3,271 | ) | (5,081 | ) | (3,152 | ) | |||||||||||||
Distribution of non-core assets to Predecessor owners | 1,254 | — | — | — | — | — | |||||||||||||||||||
Balance, end of year | $ | (22,863 | ) | $ | (18,306 | ) | $ | (17,597 | ) | $ | (14,774 | ) | $ | (11,930 | ) | $ | (11,503 | ) | |||||||
(1) | Owned off-campus properties |
(2) | On-campus participating properties |
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American Campus Communities, Inc.
/s/ Ernst & Young, LLP |
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Revenues: | |||||
Rents | $ | 6,725,502 | |||
Other income | 1,768,308 | ||||
Total revenues | 8,493,810 | ||||
Certain expenses: | |||||
Real estate taxes | 586,472 | ||||
Property operating expenses | 2,991,602 | ||||
Management fees | 281,227 | ||||
Total certain expenses | 3,859,301 | ||||
Revenues in excess of certain expenses | $ | 4,634,509 | |||
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American Campus Communities, Inc.
/s/ Ernst & Young, LLP |
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For the | ||||||||
For the | Year Ended | |||||||
Three Months Ended | December 31, | |||||||
March 31, 2005 | 2004 | |||||||
(Unaudited) | ||||||||
Revenues: | ||||||||
Rents | $ | 1,510,634 | $ | 6,008,089 | ||||
Other income | 59,266 | 164,148 | ||||||
Total revenues | 1,569,900 | 6,172,237 | ||||||
Certain expenses: | ||||||||
Real estate taxes | 115,069 | 483,378 | ||||||
Property operating expenses | 538,404 | 2,253,152 | ||||||
Management fees | 47,187 | 185,249 | ||||||
Total certain expenses | 700,660 | 2,921,779 | ||||||
Revenues in excess of certain expenses | $ | 869,240 | $ | 3,250,458 | ||||
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1. | Basis of Presentation |
2. | Use of Estimates |
3. | Rental Revenue Recognition |
4. | Management Fees |
5. | Interim Unaudited Financial Information |
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![American Campus Communities Logo](https://capedge.com/proxy/S-11A/0000950134-05-012274/d26006a1d2600603.gif)
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Item 31. | Other Expenses of Issuance and Distribution. |
SEC Registration Fee | $ | 10,109 | |||
NYSE Listing Fee | 22,150 | ||||
Printing and Engraving Expenses | 300,000 | ||||
Legal Fees and Expenses (other than Blue Sky) | 900,000 | ||||
Accounting Fees and Expenses | 300,000 | ||||
Blue Sky Fees and Expenses | 25,000 | ||||
Miscellaneous | 192,741 | ||||
Total | $ | 1,750,000 | |||
Item 32. | Sales to Special Parties. |
Item 33. | Recent Sales of Unregistered Securities. |
Number | Aggregate | |||||||||||
Date | Name | of shares | price | |||||||||
July 8, 2004 | Reckson Strategic Venture Partners, LLC | 1 | 100 |
Item 34. | Indemnification of Directors and Officers. |
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Item 35. | Treatment of Proceeds from Stock Being Registered. |
Item 36. | Financial Statements and Exhibits. |
Item 37. | Undertakings. |
(1) | For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance under Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4), or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective. | |
(2) | For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and this Offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
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AMERICAN CAMPUS COMMUNITIES, INC. |
By: | /s/ William C. Bayless, Jr. |
William C. Bayless, Jr. | |
President and Chief Executive Officer |
Signature | Title | Date | ||||
/s/ William C. Bayless, Jr. | President and Chief Executive Officer (Principal Executive Officer) | June 21, 2005 | ||||
/s/ Brian B. Nickel | Executive Vice President, Chief Financial Officer and Director (Principal Financial Officer) | June 21, 2005 | ||||
/s/ Jonathan Graf | Senior Vice President, Chief Accounting Officer and Treasurer (Principal Accounting Officer) | June 21, 2005 | ||||
* | Chairman of the Board of Directors | June 21, 2005 | ||||
* | Director | June 21, 2005 | ||||
* | Director | June 21, 2005 | ||||
* | Director | June 21, 2005 | ||||
* | Director | June 21, 2005 | ||||
* | Director | June 21, 2005 | ||||
By: | /s/ William C. Bayless, Jr. Attorney-in-Fact |
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Exhibit | ||||
Number | Description of Document | |||
1 | .1** | Form of Underwriting Agreement among American Campus Communities, Inc., American Campus Communities Operating Partnership LP and the underwriters named therein | ||
3 | .1 | Articles of Amendment and Restatement of American Campus Communities, Inc. Incorporated by reference to Exhibit 3.1 to the Registration Statement on Form S-11 (Registration No. 333-114813) of American Campus Communities, Inc. | ||
3 | .2 | Bylaws of American Campus Communities, Inc. Incorporated by reference to Exhibit 3.2 to the Registration Statement on Form S-11 (Registration No. 333-114813) of American Campus Communities, Inc. | ||
4 | .1 | Form of Certificate for Common Stock of American Campus Communities, Inc. Incorporated by reference to Exhibit 4.1 to the Registration Statement on Form S-11 (Registration No. 333-114813) of American Campus Communities, Inc. | ||
5 | .1** | Opinion of Locke Liddell & Sapp LLP as to the legality of the securities being registered hereunder | ||
8 | .1** | Opinion of Locke Liddell & Sapp LLP with respect to tax matters | ||
10 | .1 | Form of Amended and Restated Partnership Agreement of American Campus Communities Operating Partnership LP. Incorporated by reference to Exhibit 10.1 to the Registration Statement on Form S-11 (Registration No. 333-114813) of American Campus Communities, Inc. | ||
10 | .2 | American Campus Communities, Inc. 2004 Incentive Award Plan. Incorporated by reference to Exhibit 10.2 to the Registration Statement on Form S-11 (Registration No. 333-114813) of American Campus Communities, Inc. | ||
10 | .3 | American Campus Communities, Inc. 2004 Outperformance Bonus Plan. Incorporated by reference to Exhibit 10.3 to the Registration Statement on Form S-11 (Registration No. 333-114813) of American Campus Communities, Inc. | ||
10 | .4 | Form of PIU Grant Notice (including Registration Rights). Incorporated by reference to Exhibit 10.4 to the Registration Statement on Form S-11 (Registration No. 333-114813) of American Campus Communities, Inc. | ||
10 | .5 | Form of Indemnification Agreement between American Campus Communities, Inc. and certain of its directors and officers. Incorporated by reference to Exhibit 10.5 to the Registration Statement on Form S-11 (Registration No. 333-114813) of American Campus Communities, Inc. | ||
10 | .6 | Form of Employment Agreement between American Campus Communities, Inc. and William C. Bayless, Jr. Incorporated by reference to Exhibit 10.6 to the Registration Statement on Form S-11 (Registration No. 333-114813) of American Campus Communities, Inc. | ||
10 | .7 | Amendment No. 1 to Employment Agreement, dated as of April 28, 2005, between American Campus Communities, Inc. and William C. Bayless, Jr. Incorporated by reference to Exhibit 99.6 to Current Report on Form 8-K of American Campus Communities, Inc. (File No. 001-32265) filed on May 3, 2005 | ||
10 | .8 | Form of Employment Agreement between American Campus Communities, Inc. and Brian B. Nickel. Incorporated by reference to Exhibit 10.7 to the Registration Statement on Form S-11 (Registration No. 333-114813) of American Campus Communities, Inc. | ||
10 | .9 | Amendment No. 1 to Employment Agreement, dated as of April 28, 2005, between American Campus Communities, Inc. and Brian B. Nickel. Incorporated by reference to Exhibit 99.7 to Current Report on Form 8-K of American Campus Communities, Inc. (File No. 001-32265) filed on May 3, 2005 | ||
10 | .10 | Employment Agreement, dated as of April 18, 2005, between American Campus Communities, Inc. and James C. Hopke. Incorporated by reference to Exhibit 99.1 to Current Report on Form 8-K of American Campus Communities, Inc. (File No. 001-32265) filed on May 3, 2005 |
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Exhibit | ||||
Number | Description of Document | |||
10 | .11 | Employment Agreement, dated as of April 28, 2005, between American Campus Communities, Inc. and Greg A. Dowell. Incorporated by reference to Exhibit 99.2 to Current Report on Form 8-K of American Campus Communities, Inc. (File No. 001-32265) filed on May 3, 2005 | ||
10 | .12 | Separation Agreement, dated as of April 28, 2005, between American Campus Communities, Inc. and Mark J. Hager. Incorporated by reference to Exhibit 99.4 to Current Report on Form 8-K of American Campus Communities, Inc. (File No. 001-32265) filed on May 3, 2005 | ||
10 | .13 | Employment Agreement, dated as of April 18, 2005, between American Campus Communities, Inc. and James C. Hopke. Incorporated by reference to Exhibit 99.1 to Current Report on Form 8-K of American Campus Communities, Inc. (File No. 001-32265) filed on May 3, 2005 | ||
10 | .14 | Form of Confidentiality and Noncompetition Agreement. Incorporated by reference to Exhibit 10.9 to the Registration Statement on Form S-11 (Registration No. 333-114813) of American Campus Communities, Inc. | ||
10 | .15 | First Amended and Restated Management Agreement, dated as of August 1, 1998, between Dobie Center Properties, Ltd. and Texas Campus Lifestyles Management (Dobie Center), L.C. Incorporated by reference to Exhibit 10.10 to the Registration Statement on Form S-11 (Registration No. 333-114813) of American Campus Communities, Inc. | ||
10 | .16 | Amendment to First Amended and Restated Management Agreement and Exclusive Leasing Agreement, dated as of February 1, 2004, between Dobie Center Properties, Ltd. and Texas Campus Lifestyles Management (Dobie Center), L.C. Incorporated by reference to Exhibit 10.11 to the Registration Statement on Form S-11 (Registration No. 333-114813) of American Campus Communities, Inc. | ||
10 | .17 | Property Management Agreement, dated as of December 2000, between SHP–The Village at Riverside LP and American Campus Management (Texas), Ltd. Incorporated by reference to Exhibit 10.12 to the Registration Statement on Form S-11 (Registration No. 333-114813) of American Campus Communities, Inc. | ||
10 | .18 | Credit Agreement, dated as of August 17, 2004, among American Campus Communities Operating Partnership LP, as borrower, American Campus Communities, Inc., as parent guarantor, the other entities listed on the signature pages thereto as guarantors, the banks, financial institutions and other institutional lenders listed on the signature pages thereto as the initial lenders, Deutsche Bank Trust Company Americas, as the initial issuer of Letters of Credit, the Swing Line Bank, Deutsche Bank Trust Company Americas, as administrative agent, Deutsche Bank Trust Company Americas, as collateral agent, Citigroup Global Markets Inc., as syndication agent, and Deutsche Bank Securities Inc. and Citigroup Global Markets Inc., as co-lead arrangers and joint book running managers. Incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K of American Campus Communities, Inc. (File No. 001-32265) filed on August 19, 2004 | ||
10 | .19 | Contribution Agreement, dated as of July 27, 2004, among American Campus Communities, Inc., American Campus Communities Operating Partnership LP, RAP–ACP, LLC and Reckson Strategic Venture Partners, LLC and, with respect to certain sections, Citigroup Global Markets Inc. and Deutsche Bank Securities Inc. Incorporated by reference to Exhibit 10.14 to the Registration Statement on Form S-11 (Registration No. 333-114813) of American Campus Communities, Inc. | ||
10 | .20 | Purchase and Sale Agreement, dated as of July 27, 2004, among Titan Investments I, LLC, Anthony J. Patinella, Jr. and RAP Student Housing Properties, LLC. Incorporated by reference to Exhibit 10.15 to the Registration Statement on Form S-11 (Registration No. 333-114813) of American Campus Communities, Inc. | ||
10 | .21 | Form of Option Agreement for the Dobie Center, by and between American Campus Communities, Inc. and RSVP Student Housing, LLC. Incorporated by reference to Exhibit 10.16 to the Registration Statement on Form S-11 (Registration No. 333-114813) of American Campus Communities, Inc. |
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Exhibit | ||||
Number | Description of Document | |||
10 | .22 | Form of Option Agreement for The Village at Riverside, by and among American Campus Communities, Inc., RSVP Student Housing, LLC and RAP–ACP, LLC. Incorporated by reference to Exhibit 10.17 to the Registration Statement on Form S-11 (Registration No. 333-114813) of American Campus Communities, Inc. | ||
10 | .23 | Letter of Intent, dated as of July 27, 2004, between American Campus Communities, Inc. and Titan Investments I, LLC, dated as of July 27, 2004. Incorporated by reference to Exhibit 10.18 to the Registration Statement on Form S-11 (Registration No. 333-114813) of American Campus Communities, Inc. | ||
10 | .24 | Agreement of Sale and Purchase, dated September 22, 2004, by and between ACC OP Acquisitions, LLC and College Club Apartments at Tallahassee, LLC. Incorporated by reference to Exhibit 10.1 to Quarterly Report on Form 10-Q for the Quarter Ended March 31, 2005 of American Campus Communities, Inc. (File No. 001-32265) | ||
10 | .25 | Agreement of Sale and Purchase, dated September 22, 2004, by and between ACC OP Acquisitions, LLC and The Grove at University Club, LLC. Incorporated by reference to Exhibit 10.2 to Quarterly Report on Form 10-Q for the Quarter Ended March 31, 2005 of American Campus Communities, Inc. (File No. 001-32265) | ||
10 | .26 | Agreement of Sale and Purchase, dated September 22, 2004, by and between ACC OP Acquisitions, LLC and University Club Apartments of Gainesville, LLC. Incorporated by reference to Exhibit 10.3 to Quarterly Report on Form 10-Q for the Quarter Ended March 31, 2005 of American Campus Communities, Inc. (File No. 001-32265) | ||
10 | .27 | Agreement of Sale and Purchase, dated September 22, 2004, by and between ACC OP Acquisitions, LLC and University Club Apartments of Tallahassee, LLC. Incorporated by reference to Exhibit 10.4 to Quarterly Report on Form 10-Q for the Quarter Ended March 31, 2005 of American Campus Communities, Inc. (File No. 001-32265) | ||
10 | .28 | Agreement of Sale and Purchase, dated September 22, 2004, by and between ACC OP Acquisitions, LLC and The Greens at College Club, LLC. Incorporated by reference to Exhibit 10.5 to Quarterly Report on Form 10-Q for the Quarter Ended March 31, 2005 of American Campus Communities, Inc. (File No. 001-32265) | ||
10 | .29 | Purchase and Sale Agreement, dated February 28, 2005, by and between ACC OP Acquisitions, LLC and Fairfield Pinehurst Park, Ltd. Incorporated by reference to Exhibit 10.6 to Quarterly Report on Form 10-Q for the Quarter Ended March 31, 2005 of American Campus Communities, Inc. (File No. 001-32265) | ||
10 | .30 | Third Amendment to Credit Agreement, dated as of June 17, 2005, among American Campus Communities, Inc., as Parent Guarantor, American Campus Communities Operating Partnership LP, the Subsidiary Guarantors listed on the signature pages thereto, KeyBank National Association, Deutsche Bank Trust Company Americas, as the resigning Administrative Agent and resigning Collateral Agent, the other lenders that are signatories thereto, and KeyBank National Association, as successor Administrative Agent. Incorporated by reference to Exhibit 99.1 to Current Report on Form 8-K of American Campus Communities, Inc. (File No. 001-32265) filed on June 20, 2005 | ||
21 | .1* | List of Subsidiaries of the Registrant | ||
23 | .1 | Consent of Locke Liddell & Sapp LLP (included in Exhibits 5.1 and 8.1) | ||
23 | .2** | Consent of Ernst & Young LLP | ||
24 | .1* | Power of Attorney (included on the signature page hereto) |
* | Previously filed. |
** | Filed herewith. |
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