AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 14, 2004
Registration No. 333-114813

================================================================================

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-11
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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AMERICAN CAMPUS COMMUNITIES, INC.

(Exact Name of Registrant as Specified in Its Governing Instruments)

805 Las Cimas Parkway, Suite 400
Austin, TX 78746
(512) 732-1000
(Address, Including Zip Code and Telephone Number, Including Area Code,
of Registrant's Principal Executive Offices)

William C. Bayless, Jr.
Chief Executive Officer and President
805 Las Cimas Parkway, Suite 400
Austin, TX 78746
(512) 732-1000
(Name, Address, Including Zip Code and Telephone Number, Including Area Code,
of Agent for Service)
--------------
Copies to:

Yaacov M. Gross Edward F. Petrosky
Willkie Farr & Gallagher LLP J. Gerard Cummins
787 Seventh Avenue Sidley Austin Brown & Wood LLP
New York, NY 10019 787 Seventh Avenue
(212) 728-8000 New York, NY 10019
(212) 839-5300
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Approximate date of commencement of proposed sale to the public:
As soon as practicable after this Registration Statement becomes effective.

If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement of the same offering. [ ]

If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
--------------

CALCULATION OF REGISTRATION FEE
===============================================================================
PROPOSED MAXIMUM
AGGREGATE AMOUNT OF
TITLE OF SECURITIES BEING REGISTERED OFFERING PRICE(1) REGISTRATION FEE
- -------------------------------------------------------------------------------
COMMON STOCK, PAR VALUE $.01 PER SHARE $276,600,000 $ 35,046(2)
===============================================================================

(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o) of the Securities Act of 1933, as amended.
(2) Of this amount $32,091 was previously paid.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
===============================================================================

SUBJECT TO COMPLETION, DATED JUNE 14, 2004

PROSPECTUS

[LOGO]

[ ] SHARES
AMERICAN CAMPUS COMMUNITIES, INC.
COMMON STOCK

This is the initial public offering of shares of our common stock. Prior
to this public offering, there has been no public market for the shares. We
currently expect the initial public offering price of our common stock to be
between $[ ] and $[ ] per share. We will receive all of the cash proceeds
from the sale of these shares. We have applied to have our common stock
approved for listing on the New York Stock Exchange under the symbol "ACC." We
will elect to be taxed as a real estate investment trust, or REIT, for U.S.
federal income tax purposes.

SEE "RISK FACTORS" BEGINNING ON PAGE 23 FOR CERTAIN RISK FACTORS
RELEVANT TO AN INVESTMENT IN OUR COMMON STOCK, INCLUDING, AMONG OTHERS:

o Our estimated initial annual distribution is expected to represent [ ]%
of our estimated cash available for distribution to our common
stockholders for the 12-month period ended March 31, 2005. Our ability to
fund this distribution will depend, in part, upon the receipt of cash
flow from three properties that are currently under construction and are
scheduled to open in August 2004 and from development fee income, the
timing and amount of which are inherently uncertain. To the extent we use
our working capital or borrowings under our revolving credit facility to
fund our distributions, our financial condition and our ability to access
these funds for other purposes, such as the expansion of our business,
could be adversely affected. Any such distributions from working capital
or borrowings may represent a return of capital for federal income tax
purposes.

o Our results of operations are subject to annual releasing, seasonality
and other risks that are unique to the student housing industry.

o Our existing investors will receive approximately $ million in cash
([ ]% of the proceeds of this Offering) for the redemption of their
interests in our Predecessor Entities. This amount will increase or
decrease depending upon whether the shares in this Offering are sold
above or below $20 per share (the mid-point in the range referred to
above). Our existing investors will receive certain additional
distributions from us. Our existing investors played a significant role
in structuring our formation. Our existing investors will not own any
continuing interest in us following this Offering.

o We have not obtained recent appraisals of the properties in connection
with this Offering. Accordingly, the price paid to our existing owners
for their interests in our Predecessor Entities may exceed our
properties' market value.

o We have been recently organized and have no operating history. Our
management has no experience in running a public company or in operating
in accordance with the requirements for maintaining its qualification as
a REIT.

o Provisions of our organizational documents limit the ownership of our
shares.

o If we fail to qualify as a REIT for federal income tax purposes, our
distributions will not be deductible by us, reducing our earnings
available for distribution.

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus is truthful or complete. Any representation to the contrary is
a criminal offense.

PER SHARE TOTAL
----------- -----
Public offering price ..................... $ $
Underwriting discount ..................... $ $
Proceeds, before expenses, to us .......... $ $

To the extent the underwriters sell more than [ ] shares of our common
stock, they will have an overallotment option to purchase up to an additional
[ ] shares from us at the initial offering price less underwriters'
discount.

The underwriters expect to deliver the shares on or about [ ], 2004.

CITIGROUP DEUTSCHE BANK SECURITIES

The date of this prospectus is [ ], 2004

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 state where the offer or sale is not permitted.

[Inside Front Cover]

[12 PICTURES OF STUDENTS]

[COMPANY LOGO]
THE STUDENT HOUSING COMPANY
WWW.STUDENTHOUSING.COM
- ----------------------

[PICTURE OF UNIVERSITY VILLAGE AT LAREDO]
UNIVERSITY VILLAGE(2)
LAREDO, TEXAS

[PICTURE OF THE VILLAGE AT SCIENCE DRIVE]
THE VILLAGE AT SCIENCE DRIVE(1)
ORLANDO, FLORIDA

[PICTURE OF BEAR CREEK APARTMENTS AT WILLIAMS VILLAGE]
BEAR CREEK AT WILLIAMS VILLAGE(1)
BOULDER, COLORADO

[PICTURE OF UNIVERSITY VILLAGE AT TOWSON]
UNIVERSITY VILLAGE(2)
TOWSON UNIVERSITY, TOWSON, MARYLAND

[PICTURE OF THE VILLAGE AT ALAFAYA CLUB]
THE VILLAGE AT ALAFAYA CLUB(1), ORLANDO, FLORIDA

[PICTURE OF CULLEN OAKS]
CULLEN OAKS, HOUSTON, TEXAS(1)

[PICTURE OF THE VILLAGE AT BLACKSBURG]
THE VILLAGE AT BLACKSBURG(1), BLACKSBURG, VIRGINIA

[PICTURE OF RIVER CLUB APARTMENTS]
RIVER CLUB APARTMENTS(1), ATHENS, GEORGIA

[PICTURE OF THE CALLAWAY HOUSE]
THE CALLAWAY HOUSE(1), TEXAS A&M, COLLEGE STATION, TEXAS

[PICTURE OF CARDINAL VILLAGE]
CARDINAL VILLAGE - LAMAR UNIVERSITY, BEAUMONT, TEXAS(2)

[PICTURE OF THE VILLAGE ON UNIVERSITY]
THE VILLAGE ON UNIVERSITY(1), TEMPE, ARIZONA

(1) OWNED BY AMERICAN CAMPUS COMMUNITIES

(2) MANAGED BY AMERICAN CAMPUS COMMUNITIES

[COMPANY LOGO]
THE STUDENT HOUSING COMPANY
WWW.STUDENTHOUSING.COM
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805 LAS CIMAS PARKWAY, SUITE 400
AUSTIN, TX 78746
512-732-1000

TABLE OF CONTENTS
PAGE
---------
PROSPECTUS SUMMARY ...................................... 1
Our Company ........................................ 1
Our Business ....................................... 2
Competitive Strengths .............................. 3

Summary Risk Factors ............................... 3
Business and Growth Strategies ..................... 6
Our Properties ..................................... 7
Third Party Services ............................... 9
Indebtedness ....................................... 11
Structure and Formation ............................ 11
Formation Transactions ............................. 12
Consequences of This Offering and the
Formation Transactions .......................... 14
Restrictions on Transfer ........................... 16
Restrictions on Ownership of Our Capital
Stock ........................................... 16
Distribution Policy ................................ 16
Our Tax Status ..................................... 17
Summary Selected Financial Data .................... 18

This Offering ...................................... 22
RISK FACTORS ............................................ 23
Risks Related to Our Properties and Our
Business ........................................ 23
Risks Related to the Real Estate Industry .......... 27
Risks Related to Our Organization and
Structure ....................................... 31
Risks Related to This Offering ..................... 35

FORWARD LOOKING STATEMENTS .............................. 38
USE OF PROCEEDS ......................................... 39
DISTRIBUTION POLICY ..................................... 41
CAPITALIZATION .......................................... 47
DILUTION ................................................ 48
SELECTED FINANCIAL DATA ................................. 50
MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS ............................ 54
Overview ........................................... 54
Factors Expected to Affect Our Operating
Results ......................................... 56
Critical Accounting Policies ....................... 60
Recent Trends and Events ........................... 61
Results of Operations .............................. 64
Cash Flows ......................................... 75
Liquidity and Capital Resources .................... 76
Off-Balance Sheet Arrangements ..................... 80
Funds From Operations .............................. 80
Inflation .......................................... 81
Quantitative and Qualitative Disclosures
About Market Risk ............................... 81
New Accounting Standards and Accounting
Changes ......................................... 82
INDUSTRY OUTLOOK ........................................ 83
THE STUDENT HOUSING BUSINESS ............................ 93
BUSINESS AND PROPERTIES ................................. 95
Overview ........................................... 95

PAGE
---------

Our Business ....................................... 95
History ............................................ 97
Our Properties ..................................... 97
Third Party Services ............................... 115
Operations ......................................... 120
Leasing and Marketing .............................. 121
Competition and Competitive Advantages ............. 123
Indebtedness ....................................... 126
Insurance .......................................... 127
Regulation ......................................... 128
Employees .......................................... 129
Offices ............................................ 129
Legal Proceedings .................................. 129
STRATEGY FOR GROWTH ..................................... 130
Acquisition and Development ........................ 130
Third Party Management and Development
Services ........................................ 130
Proactive Management ............................... 131
MANAGEMENT .............................................. 132
Directors, Executive Officers and Senior
Management ...................................... 132
Board Committees ................................... 136
Compensation of Directors .......................... 137
Executive Officer Compensation ..................... 137
2004 Incentive Plan ................................ 138
American Campus Partners, LLC ...................... 140
Employment Agreements .............................. 140
Non-Competition Agreements ......................... 142
Indemnification Agreements ......................... 142
Compensation Committee Interlocks and
Insider Participation ........................... 144
CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS ......................................... 145
Formation Transactions ............................. 145
Description of Contribution Agreement .............. 145
Titan Agreements ................................... 147
Employment Agreements .............................. 147
POLICIES WITH RESPECT TO CERTAIN
ACTIVITIES ........................................... 148
Investment Policies ................................ 148
Dispositions ....................................... 149
Financing Policies ................................. 149
Conflict of Interest Policies ...................... 150
Interested Director and Officer Transactions 150
Business Opportunities ............................. 150
Policies with Respect to Other Activities .......... 150
Reporting Policies ................................. 151
STRUCTURE AND FORMATION ................................. 152
Our Structure ...................................... 152
The Operating Partnership .......................... 152
The Services Company ............................... 152
Formation Transactions ............................. 152
Consequences of This Offering and the
Formation Transactions .......................... 155
Benefits to Related Parties ........................ 155

PAGE
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Restrictions on Transfer ............................. 157
Conflicts of Interest ................................ 157
Restrictions on Ownership of Our Capital Stock ....... 157
DESCRIPTION OF THE PARTNERSHIP
AGREEMENT OF AMERICAN CAMPUS
COMMUNITIES OPERATING
PARTNERSHIP LP .................................... 158
Management of Our Operating Partnership ......... 158
Transferability of Interests .................... 158
Amendments of the Partnership Agreement ......... 158
Distributions to Unitholders .................... 159
Redemption/ Exchange Rights ..................... 159
Issuance of Additional Units, Common Stock
or Convertible Securities .................... 160
Tax Matters ..................................... 160
Allocations of Net Income and Net Losses to
Partners ..................................... 160
Operations ...................................... 160
Termination Transactions ........................ 160
Term ............................................ 161
Indemnification and Limitation of Liability ..... 161
PRINCIPAL STOCKHOLDERS ............................... 162
DESCRIPTION OF SECURITIES ............................ 163
General ......................................... 163
Common Stock .................................... 163
Preferred Stock ................................. 164
Restrictions on Transfer ........................ 164
Transfer Agent and Registrar .................... 167
CERTAIN PROVISIONS OF MARYLAND
LAW AND OF OUR CHARTER AND
BYLAWS ............................................ 168
Our Board of Directors, Vacancies on Our
Board of Directors and Removal of
Directors .................................... 168
Amendment of Our Charter and Bylaws ............. 168
Transactions Outside the Ordinary Course of
Business ..................................... 168
Dissolution ..................................... 168
Advance Notice of Director Nominations
and New Business ............................. 168

PAGE
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Ownership Limit ................................. 169
Business Combinations ........................... 169
Control Share Acquisitions ...................... 170
Anti-Takeover Effect of Certain Provisions
of Maryland Law and of Our Charter and
Bylaws ....................................... 171
Board Consideration of Relevant Factors and
Constituencies ............................... 171
Duties of Our Directors ......................... 171
Indemnification and Limitation of Directors'
and Officers' Liability ...................... 171
Indemnification Agreements ...................... 172
SHARES ELIGIBLE FOR FUTURE SALE ...................... 173
General ......................................... 173
Rule 144 ........................................ 173
Stock Options and 2004 Incentive Plan ........... 173
Lock-up Agreements and Other Contractual
Restrictions on Resale ....................... 173
FEDERAL INCOME TAX CONSIDERATIONS 175
Taxation of Our Company ......................... 175
Requirements for Qualification .................. 177
Organizational Requirements ..................... 177
Taxable REIT Subsidiaries ....................... 178
Taxation of Taxable U.S. Shareholders ........... 184
Income Taxation of the Partnerships and Their
Partners ..................................... 190
ERISA CONSIDERATIONS ................................. 192
General ......................................... 192
Employee Benefit Plans, Tax-Qualified
Retirement Plans and IRAs .................... 192
Our Status Under ERISA .......................... 193
UNDERWRITING ......................................... 195
LEGAL MATTERS ........................................ 198
EXPERTS .............................................. 198
GLOSSARY ............................................. 199
WHERE YOU CAN FIND MORE
INFORMATION ....................................... 201
INDEX TO FINANCIAL STATEMENTS ........................ F-1

----------------

You should rely only on the information contained in this document. We have not
authorized anyone to provide you with any additional or different information.
This document may only be used where it is legal to sell these securities. The
information in this document may only be accurate on the date of this document.

----------------

DEALER PROSPECTUS DELIVERY REQUIREMENT

UNTIL , 2004 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL
DEALERS EFFECTING TRANSACTIONS IN THESE SECURITIES, WHETHER OR NOT
PARTICIPATING IN THIS OFFERING, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS
IS IN ADDITION TO A DEALER'S OBLIGATION TO DELIVER A PROSPECTUS WHEN ACTING AS
AN UNDERWRITER AND WITH RESPECT TO UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.

PROSPECTUS SUMMARY

You should read the following summary together with the more detailed
information regarding us and our historical and pro forma financial statements
appearing elsewhere in this prospectus, including under the caption "Risk
Factors." References in this prospectus to "we," "our," "us," and "our Company"
refer to American Campus Communities, Inc., a Maryland corporation, together
with our consolidated subsidiaries. These consolidated subsidiaries include
American Campus Communities Operating Partnership LP, a Maryland limited
partnership of which we are the general partner and which we sometimes refer to
in this prospectus as our "Operating Partnership," and American Campus
Communities Services, Inc., a Delaware corporation and wholly owned subsidiary
of our Operating Partnership, which we sometimes refer to in this prospectus as
our "Services Company." Our "Predecessor Entities" shall mean one or all, as
the context requires, of the limited liability companies, partnerships and
joint ventures that owned our properties and provided our third party services
prior to the formation transactions. "Reckson" shall mean Reckson Associates
Realty Corp., a Maryland corporation, "RSVP" shall mean Reckson Strategic
Venture Partners, LLC, a Delaware limited liability company, and "RAP" shall
mean Reckson Asset Partners, LLC, a Delaware limited liability company owned by
Reckson and RSVP. Prior to this Offering, RAP and RSVP collectively owned our
Predecessor Entities. Unless otherwise indicated, the information contained in
this prospectus is as of March 31, 2004 and assumes that the underwriters'
over-allotment option has not been exercised, the transactions described under
the caption "Structure and Formation" beginning on page have been
consummated, the common stock to be sold in this Offering has been sold at $20
per share, which is the mid-point of the range of prices indicated on the front
cover of this prospectus, and the partnership units in our Operating
Partnership, or "Units," to be issued in the formation transactions are valued
at the same price as our shares of common stock. Certain capitalized terms used
herein are defined below with the detailed definitions set forth in the
glossary beginning on page .

OUR COMPANY

We are one of the largest private owners, managers and developers of high
quality student housing properties in the United States in terms of beds owned
and under management. We are a fully integrated, self-managed and
self-administered equity REIT with expertise in the acquisition, design,
finance, development, construction management, leasing and management of
student housing properties. We own 16 high quality student housing properties,
which include 201 buildings containing approximately 3,900 apartment units and
11,800 beds, including three properties which are scheduled to be completed and
opened in August 2004 and are currently in their initial lease-up stages. Our
owned portfolio includes primarily off-campus properties that are in close
proximity to public universities, contain modern housing units, offer
resort-style amenities and are supported by a classic Resident Assistant system
and other student-oriented programming.

We believe that significant investment opportunities exist in the
private-sector ownership, development, acquisition and management of student
housing properties because of a number of factors impacting the student housing
market in the United States. According to a report that we have commissioned
from Rosen Consulting Group, LLC, a real estate economic consulting firm, these
factors include:

o a surge in college enrollment in the United States, fueling a demand for
student housing;

o budget shortfalls at universities have reduced the availability of
capital resources for new student housing;

o the existing traditional dormitory-style facilities are becoming obsolete
and are in the need of renovation or replacement;

o the growing number of partnerships between universities and the private
sector developers to provide on and off-campus student housing; and

o a highly fragmented ownership of private sector student housing
properties.

OUR BUSINESS

We own and operate 12 off-campus student housing properties within close
proximity to nine primary colleges and universities in eight states.
Additionally, we participate with two university systems in the ownership of
four on-campus properties under long term participating ground/facility leases;
we refer to these properties as our "on-campus participating properties." We
manage all 16 of our owned properties.

We also provide development and construction management services for student
housing properties owned by universities, charitable foundations and others.
Our clients have included some of 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 and the University of Colorado System. We
have developed student housing properties for these clients and often have been
retained to manage and lease these properties following their opening. Since
1996, we have developed and secured financing for 23 third party student
housing properties. The aggregate development cost of these properties exceeds
$525 million.

We also provide third party management and leasing services for 16 student
housing properties that represent approximately 10,500 beds in approximately
3,900 units, 13 of which we developed. Our third party management and leasing
services are typically provided pursuant to multi-year management contracts
that have an initial term that ranges from two to five years. Together with our
owned properties discussed above, we currently manage 32 student housing
properties, representing approximately 22,300 beds.

We were formed to continue the student housing business of our Predecessor
Entities that had been engaged in the student housing business since 1993. From
1993 to 1997, our Predecessor Entities operated primarily as a third party
provider of student housing management and development services. In May 1997,
an indirect subsidiary of Reckson acquired a majority interest in certain of our
Predecessor Entities, which was subsequently contributed to RSVP. From 1996
through 2002, our Predecessor Entities accumulated 14 properties through
acquisitions and development, principally through RAP, an entity jointly owned
by Reckson and RSVP. This included the acquisition of nine student housing
properties, during the 30 month period from May of 1999 to November of 2001,
eight of which are part of our current portfolio.

In June 1998, Reckson spun off FrontLine Capital Group, RSVP's parent, to
Reckson's shareholders. Following the spin-off, Reckson became a principal
lender to FrontLine which used this financing, among other things, to fund
RSVP's investment activities. In mid-2001, FrontLine began to experience
financial difficulties and subsequently filed for protection under Chapter 11 of
the Bankruptcy Code. Since that time the capital investment in our Predecessor
Entities by RAP and RSVP has been significantly reduced and, as a result, the
acquisition program of our Predecessor Entities has been curtailed. Among our
goals in this Offering is to reinvigorate our program of growth by accessing new
sources of investment capital.

Our principal executive offices are located at 805 Las Cimas Parkway, Suite
400, Austin, Texas 78746. Our telephone number at that location is (512)
732-1000. Our website is located at www.studenthousing.com. The information on
our website is not part of this prospectus.

COMPETITIVE STRENGTHS

We believe that we have the following competitive advantages:

o We have expertise in the unique and specialized aspects of the student
housing industry and focus on student housing as our core business.

o We have assembled one of the industry's most experienced teams of student
housing professionals.

o Our portfolio consists of high quality student housing properties which
contain modern unit plans and extensive student oriented amenities.

o We have a fully integrated organization that 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.

o We have a proven track record as a developer, acquirer, and manager of
high quality student housing properties and have an extensive network of
relationships with university systems and individual educational
institutions, which provides us with acquisition and development
opportunities.

o We are industry innovators having created proprietary lease
administration and marketing software for the student housing industry
that enables us to quickly respond to market changes.

o Upon completion of this Offering, we will be the only publicly traded
REIT solely focused on student housing in the United States. We believe
this will further enhance our reputation and prominence in the student
housing industry and will provide us with access to capital markets. It
will also enable us to use our shares or Units as currency with which to
acquire properties.

SUMMARY RISK FACTORS

You should carefully consider the following important risks:

o Our estimated initial annual distribution is expected to represent __% of
our estimated cash available for distribution to our common stockholders
for the 12-month period ending March 31, 2005. Our ability to fund this
distribution will depend, in part, upon the receipt of cash flow from
three properties that are currently under construction and are scheduled
to open in August 2004 and from development fee income, the timing and
amount of which are inherently uncertain. In the event these properties
do not open on schedule, we may incur additional expense in providing
alternative housing arrangements to students with signed leases and such
students may attempt to terminate their leases. To the extent we use our
working capital or borrowings under our revolving credit facility to fund
our distributions, our financial condition and our ability to access
these funds for other purposes, such as the expansion of our business,
could be adversely affected.

o 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 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 typically 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.

o 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.

o The initial public offering price of our common stock was determined in
consultation with the underwriters and does not necessarily bear any
relationship to our book value or market value of our assets. As a
result, our value represented by the public offering price of our shares
may exceed the market value of our assets. You will experience immediate
dilution of $8.39 per share immediately after this Offering.

o Upon completion of this Offering and related transactions, our total
consolidated indebtedness will be approximately $196.8 million, which
includes the consolidated indebtedness of our on-campus participating
properties of approximately $78.2 million. Our debt service obligations
will 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. For example, we expect to incur additional indebtedness
through borrowings under a credit facility that will be in place at the
closing of this Offering to fund future property acquisitions and for
other working capital needs, including the initial payment of
distributions to our shareholders. Our ability to borrow from time to
time under this facility will be 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.

o 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 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.

o RAP will receive approximately $ million in cash from this Offering for
the redemption of its interests in our Predecessor Entities. This amount
will increase or decrease depending upon whether the shares in this
Offering are sold above or below $20 per share (the mid-point in the
range referred to on the cover of this prospectus). Our existing
investors will receive certain additional distributions from us. RSVP
will, through its ownership interest in RAP, including interests in RAP
received in the formation transactions, be entitled to participate in the
benefits of this Offering realized by RAP. RAP and RSVP were the
principal prior owners of our Predecessor Entities

and played a significant role in structuring our formation. In the course
of structuring our formation, RAP and RSVP had the ability to influence
the type and level of benefits that they and our executive officers would
receive from us. They also had the ability to influence the other terms
of the formation transactions, including, without limitation, the
representations and warranties that they made to us in the formation
transactions and the indemnities that they provided for breaches of such
representations and warranties. Our existing investors will not own any
continuing interest in us following this Offering.

o We have not obtained recent appraisals of the properties in connection
with this Offering. The price paid to our existing owners for their
interests in our Predecessor Entities may exceed our properties' market
value. The price paid for these interests will increase or decrease
depending upon whether the shares in this Offering are sold above or
below $20 per share (the mid-point in the range referred to on the cover
of this prospectus). Factors considered in determining the offering price
included our Predecessor Entities' historical operations, management,
estimated net income, estimated funds from operations, estimated cash
available for distribution, growth prospects, and the current state of
the commercial real estate industry and the economy as a whole.

o We have been recently organized and have no operating history. In
addition, all of our properties have been acquired or developed by the
Predecessor Entities within the past eight years and have limited
operating histories under current management. Our management has no
experience in running a public company or in operating in accordance with
the requirements for maintaining its qualification as a REIT.

o 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, by number of shares or by
voting power, 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. Our 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.

o In order to maintain our qualification as a REIT, we are required under
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. 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 maintain our qualification as a REIT.

o To qualify as a REIT, we will have 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 shareholders.

BUSINESS AND GROWTH STRATEGIES

Our primary business objectives are to maximize distributable cash flow and
enhance the value of our portfolio in order to maximize total returns to our
shareholders. We believe we can achieve these objectives by continuing to
implement our business strategies described below.

ACQUISITION AND DEVELOPMENT

We seek to own high quality, well designed and well located student housing
properties. We seek to acquire or develop properties in under-serviced markets
that have stable or increasing student populations. We also target properties
that provide an opportunity for substantial economic growth as a result of
their quality, proximity to campuses, or through our superior operational
capabilities. We believe that our reputation and close relationship with the
local universities gives us an advantage in sourcing acquisitions and obtaining
municipal approvals and community support for our development projects.

Acquisitions. During the 30 month period from May of 1999 to November of 2001,
we acquired nine properties (eight of which we still own) containing
approximately 1,800 units and 6,000 beds. We believe that our relationship with
university systems and individual educational institutions, our knowledge of
the student housing market and our prominence as the sole publicly-traded REIT
focused exclusively on student housing in the United States will afford us a
competitive advantage in acquiring additional student housing properties.
Concurrently with this Offering, we will enter into a $ million revolving
credit facility which will be available, among other things, to fund future
property acquisitions.

Development. Since 1996, we have developed eight of our owned properties,
including three that are scheduled to be completed and open in August 2004. In
addition, through a joint venture with a current land owner, we have recently
entered into an agreement to purchase a 19.5 acre property in close proximity
to the State University of New York at Buffalo that we plan to develop into an
owned, off-campus student housing complex consisting of approximately 800 beds.
This property is targeted to open in the 2005-6 academic year.

Our experienced development staff will continue to identify and acquire land
parcels, in close proximity to colleges and universities, that offer location
advantages or that allow for the development of unique products that offer a
competitive advantage. We will also continue to benefit from opportunities
derived from our extensive network with colleges and universities, as well as
through our American Campus - Titan relationship.

THIRD PARTY DEVELOPMENT AND MANAGEMENT SERVICES

We believe that an opportunity exists for the continued growth of our third
party development and management business, particularly for on-campus
facilities owned by colleges, universities and charitable foundations. Since
1996, we have developed 23 student housing properties for third parties,
including six that are scheduled to be completed and open in August 2004. We
believe that there are growing pressures on many colleges and universities to
"privatize" their student housing development and management operations. We
believe our track record and existing client relationships with some of the
nation's most prominent systems of higher education will enhance our ability to
pursue opportunities in the student housing market.

PROACTIVE MANAGEMENT

areas, state-of-the-art technological capabilities and resort style amenities
that are designed to maximize a student's university experience. We also
utilize a classic Resident Assistant system that implements an array of
educational, recreational and social programs that are designed to promote an
atmosphere conducive to community pride, loyalty, scholarship and education.

We aggressively seek to enhance cash flow from our properties. We intend to
enhance cash flow by maximizing rental rates and occupancy, expanding the range
of our income-generating tenant services, where applicable, and controlling
expenses through the implementation of cost control management and systems.

OUR PROPERTIES

The following table presents certain summary information about our properties.
Our properties generally are modern facilities, with 11 of our 16 properties
having been built less than six years ago and 14 of our properties having been
built less than 10 years ago. Amenities at most of our properties include a
swimming pool, basketball courts and a large community center featuring a
fitness center, computer center, recreation room with billiards and other
games, tanning beds and study areas. Some properties also have a jacuzzi/hot
tub, volleyball courts, tennis courts and washer/dryer in units. Callaway House
also has a food service facility. Three of our off-campus properties are
currently under construction and are scheduled to open in August 2004. Lease
terms are generally 12 months at our off-campus properties and 9 months at our
on-campus properties.

We own fee title to all of these properties except for:

o Callaway House (property #6), in which we own an 80% partnership interest
and are entitled to significant preferred distributions;

o University Village at TU (property #12), which is subject to a 75-year
ground lease from Temple University; and

o Four properties (properties #13, 14, 15 and 16) that are on-campus
participating properties held under participating ground/facility leases
with two university systems.

TWELVE
MONTHS ENDED
MARCH 31,
2004
YEAR PRIMARY UNIVERSITY REVENUE OCCUPANCY # OF # OF # OF
NAME BUILT SERVED (IN THOUSANDS) RATES(1) BLDGS UNITS BEDS
---- ----- --------------------- ---------------- --------- ----- ----- ----

OFF-CAMPUS PROPERTIES
1. Commons on Apache 1987 Arizona State
University Main
Campus $ 1,488 95.9%(2) 6 111 444
2. The Village at Blacksburg 1990/ Virginia Polytechnic
98 Institute and
State University 3,957 75.7 (3) 26 288 1,056
3. The Village on University 1998 Arizona State
University Main
Campus 4,173 75.7 (4) 20 288 918
4. River Club Apartments 1996 The University of
Georgia - Athens 3,470 97.9 18 266 794
5. River Walk Townhomes 1998 The University of
Georgia - Athens 1,410 94.7 20 100 340
6. The Callaway House (5) 1999 Texas A&M
University 4,682 (6) 73.4 (6) 1 173 538
7. The Village at Alafaya 1999 The University of
Club Central Florida 4,955 98.9 20 228 840
8. The Village at Science 2000 The University of
Drive Central Florida 4,434 98.1 17 192 732

9. University Village at 2002 The University of
Boulder Creek (7) Colorado at Boulder 2,642 97.7 4 82 309
10. University Village at 2004 California State
Fresno (8) University, Fresno N/A N/A (9) 9 105 406
11. University Village at San 2004 California State
Bernardino (8) (10) University, San Bernardino N/A N/A (11) 6 132 480
12 University Village at TU 2004 Temple University
(8) (12) N/A N/A (13) 3 220 749
Subtotal of Off-Campus Properties: ------- ----- --- ----- -----
ON-CAMPUS PARTICIPATING $31,211 88.2% 150 2,185 7,606
PROPERTIES (14)
13. University Village - 1996/ Prairie View A&M
PVAMU (15) 1997/ University
1998 $ 7,345 95.6% 30 612 1,920
14. University Village - 1997 Texas A&M
TAMIU (15) International
University 1,068 96.0 4 84 252
15. University College -
PVAMU (15) 2000/03 Prairie View A&M

16. Cullen Oaks (15) 2001 University 5,569 94.9 14 756 1,470
The University of
Houston 2,923 97.9 3 231 525
------- ----- --- ----- ------

Subtotal of On-Campus Participating
Properties: $16,905 95.7% 51 1,683 4,167
------- ------ --- ----- ------
TOTALS: $48,116 (16) 91.3% 201 3,868 11,773
======= ====== === ===== ======

- -----------------

(1) Occupancy rates are calculated as of March 31, 2004 based on the number of
total occupied beds (including beds occupied by staff) divided by beds.

(2) Commons on Apache will be 100% leased for the 2004-5 academic year by
Arizona State University for a minimum one year rental of approximately
$1,660,000.

(3) As of June 4, 2004, we have received applications with refundable deposits
for the 2004-5 academic year for 98.6% and executed leases for 98.1% of
the 1,056 beds.

(4) As of June 4, 2004, we have received applications with refundable deposits
for the 2004-5 academic year for 75.6% and executed leases for 58.4% of
the 918 beds.

(5) Although we hold an 80% interest in the property, because of our preferred
distribution rights, we currently receive substantially all of the
property's net cash flow.

(6) As rent at this property includes food services, revenue is not comparable
to the other properties in this chart. As of June 4, 2004, we have
received 570 applications with refundable deposits for the 2004-5 academic
year for 538 beds and executed leases for 525 of the 538 beds. Based on
demand, the property may be increased to double occupancy beds for a total
capacity of 566 beds.

(7) We are developing and will manage a competing 994 bed on-campus residence
hall for the University of Colorado that opened 495 beds in the Fall 2003
semester. The second phase of 499 beds is scheduled to open in the Fall
2004 semester.

(8) These properties are under construction and scheduled to open in August
2004.

(9) As of June 4, 2004, we have received applications with refundable deposits
for the 2004-5 academic year for 57.8% and executed leases for 48.0% of
the 406 beds.

(10) The California State University has an option to purchase this property
for $28.3 million, which option expires 150 days after notice of
completion of construction has been given to the University. We believe
the university will seek approval to exercise this option.

(11) As of June 4, 2004, we have received applications with refundable deposits
for the 2004-5 academic year for 87.4% and executed leases for 78.4% of
the 480 beds.

(12) Subject to a 75 year ground lease from Temple University.

(13) Of our 749 beds, Temple University has agreed to master lease up to 400
beds that they intend to make available to their students as part of their
annual "Housing Lottery." As of June 4, 2004, we have executed leases for
347 of the remaining 349 beds for the 2004-5 academic year.

(14) Although our on-campus participating properties account for 43.5% of our
units and 35.4% of our beds, because of the structure of their ownership
and financing they only provided approximately $471,000 in distributable
cash flow for the twelve months ended March 31, 2004. The ground leases
through which we own our on-campus participating properties provide that
the university lessor may purchase our interest in and assume the
management of the facility.

(15) Subject to a participating ground lease with its primary university
system.

(16) Excludes revenue from Coyote Village, which was transferred to Weatherford
College in 2004, and revenue from The Village at Riverside, which
following the formation transactions will be owned by an entity affiliated
with RAP and RSVP. These revenues are included in our historical revenues
for the twelve months ended March 31, 2004.

THIRD PARTY SERVICES

DEVELOPMENT SERVICES

The following table presents certain summary information regarding the
development services that we are currently providing for third party owners.
Our pre-development services typically include feasibility studies and design
services and our development services typically include design oversight,
development, construction management and financial structuring services.

PROPERTY UNIVERSITY LOCATION DESCRIPTION OF SERVICES
- -------- ----------------------------- ---------------- ---------------------------------------

Under Construction

1. IPFW Student Housing Indiana University - Purdue Fort Wayne, IN Design and development services for
University, Fort Wayne 568 bed apartment building
community scheduled to open in
August 2004.

2. Cardinal Village Lamar University Beaumont, TX Design, development and construction
(Phase III) management services for a 499 bed
apartment building community
scheduled to open in August 2004.

3. Sam Houston Village Sam Houston State Huntsville, TX Design, development and construction
University management services for a 543 bed
apartment building community
scheduled to open in August 2004.

4. San Marcos Hall Phase II Texas State University San Marcos, Design, development and construction
TX management for a 471 bed residence
hall scheduled to open in August
2004.

5. Vista Del Campo The University of Irvine, CA Design, development and construction
Apartments Phase I California, Irvine management services for a 1,488 bed
garden apartment community
scheduled to open in September 2004.

6. Bear Creek at Williams The University of Boulder, CO Design, development and construction
Village Phase I(b) Colorado at Boulder management for a 499 bed mid-rise
apartment community scheduled to
open in August 2004.
Pre-Development

7. Cleveland State Cleveland State Cleveland, OH Award of design, redevelopment and
University University refurbishment of an existing high rise
into 400 bed property.

8. Purdue University - Purdue University - Hammond, IN Feasibility and design oversight
Calumet Calumet services. We also will assume
management for this property.

PROPERTY UNIVERSITY LOCATION DESCRIPTION OF SERVICES
- -------- ----------------------------- ----------------- -------------------------------------

9. Purdue University Purdue University West Lafayette, Feasibility and design oversight
IN services.

10. Saint Leo University Saint Leo University Tampa, FL Award of the design, development
Phase II and construction management services
of a 232 bed apartment community
scheduled to open in August 2005.

11. Washington State Washington State University Pullman, WA Feasibility and design oversight
University services for future projects, yet
undetermined.

12. West Virginia University West Virginia University Morgantown, Feasibility and design oversight
WV services for future projects yet
undetermined.

13. Vista Del Campo The University of Irvine, CA Award of the design, development
Apartments Phase II California, Irvine and construction management services
of a 1,500 bed Garden Apartment
community scheduled to open in Fall
of 2006.

MANAGEMENT SERVICES

The following table presents certain summary information regarding the third
party properties for which we currently provide management services. These
services typically include full responsibility for all aspects of operations,
including, marketing, leasing administration, facilities maintenance, business
administration, accounts payable, accounts receivable, financial reporting,
capital projects, and residence life student development. We provide these
services pursuant to multi-year management agreements (generally ranging
between two to five years). All of these properties are on-campus properties
except for Campus Estates, Dobie Center, The Village at Riverside and
University Village at Sheppard Pratt.

# OF # OF
PROPERTY UNIVERSITY UNITS BEDS
- --------------------------------------------------- ---------------------------------------- ------- --------

1. Texan Hall (1) Angelo State University 262 512
2. IPFW Student Housing (2) Indiana University - Purdue University,
Fort Wayne 220 568
3. Cardinal Village (Phase I) Lamar University 261 521
4. Cardinal Village (Phase II) Lamar University 261 521
5. Cardinal Village (Phase III) (2) Lamar University 251 499
6. University Village - Savannah State Savannah State University 192 660
7. Vista Del Campo Apartments Phase I (2) The University of California, Irvine 488 1,488
8. Bear Creek at Williams Village Phase I(a) (1) The University of Colorado at Boulder 170 495
9. Bear Creek at Williams Village Phase I(b) (2) The University of Colorado at Boulder 172 499
10. Bayou Oaks Greek Housing (1) The University of Houston 176 471
11. Campus Estates (3) The University of Texas - Austin 498 1,548
12. Dobie Center (4) The University of Texas - Austin 383 975
13. The Village at Riverside (5) The University of Texas - Austin 156 408
14. University Village at Sheppard Pratt Towson University 187 615
15. Coyote Village (1) (6) Weatherford College 76 280
16. RAMS Commons Winston Salem State University 150 448
--- -----
TOTALS: 3,903 10,508

- -----------------
(1) Property began operation in August 2003.

(2) Property was under construction as of March 31, 2004, and is scheduled to
open in Fall 2004.

(3) Property management was awarded to us by the foreclosing lender in November
2003.

(4) An indirect subsidiary of RSVP owns a 23% interest in this property. RSVP
has granted us a four-year option to acquire this interest.

(5) After the formation transactions, an affiliate of RAP and RSVP will own
this property. They have granted us a four-year option to acquire the
property.

(6) Property was transferred to Weatherford College in April 2004.

INDEBTEDNESS

As of March 31, 2004, seven of our off-campus properties had approximately
$112.9 million of fixed rate mortgage indebtedness outstanding, bearing
interest at an annual weighted average rate of approximately 7.4%. None of such
indebtedness matures prior to June 2009.

In addition, three of our on-campus participating properties will be
encumbered by approximately $61.0 million of fixed rate, taxable, insured bond
financed indebtedness, bearing interest at an annual weighted average rate of
approximately 7.5% and self-amortizing over the loan term. Our fourth on-campus
participating property is encumbered by approximately $17.2 million of floating
rate construction financing that matures in November 2008. We have purchased an
interest rate swap that effectively fixes the interest rate of this
construction financing at 5.5% through its maturity.

Concurrently with this Offering, we will enter into a $ million
revolving credit facility with affiliates of Citigroup Global Markets Inc. and
Deutsche Bank Securities Inc., two of our underwriters, as joint lead
arrangers, which facility is expected to be available following this Offering
to, among other things, fund future property acquisitions. Our ability to
borrow from time to time under this facility is expected to be subject to
certain conditions and the satisfaction of specified financial covenants. Our
revolving credit facility is also expected to contain covenants that restrict
our ability to pay dividends or other amounts to our stockholders unless
certain financial tests are satisfied. Concurrently with this Offering, we will
use approximately $5.7 million of this facility to acquire Titan's interests in
the American Campus - Titan Properties.

STRUCTURE AND FORMATION

OUR STRUCTURE

THE OPERATING PARTNERSHIP

Following the consummation of this Offering and the formation transactions,
substantially all of our assets will be held by, and our operations conducted
through, our Operating Partnership. We will own 98.7% of the Units in our
Operating Partnership. Certain of our officers will own Profit Interest Units
(PIUs) in the Operating Partnership representing approximately a 1.3% limited
partnership interest. We will be the sole general partner of our Operating
Partnership; accordingly, our board of directors will effectively direct all of
our Operating Partnership's affairs.

THE SERVICES COMPANY

student-tenants in our owned properties. In order to avoid realizing such
income in a manner that would adversely affect our ability to qualify as a
REIT, we will provide certain services through our Services Company, which will
elect, together with us, to be treated as our "taxable REIT subsidiary" or
"TRS." Our Services Company will be wholly-owned and controlled by our
Operating Partnership. Our on-campus participating properties will be owned by
our Services Company. The income earned by our Services Company (including
income from our on-campus participating properties) will be subject to regular
federal income tax and state and local income tax where applicable and will
therefore be subject to an additional level of tax as compared to the income
earned from our properties.

FORMATION TRANSACTIONS

Prior to or simultaneously with the completion of this Offering, we will engage
in the formation transactions described below. These are designed to:

o consolidate the ownership of our properties and the business of our
Predecessor Entities into our Operating Partnership and Services Company;

o facilitate this Offering;

o enable us to raise necessary capital to redeem the interests of RAP and
RSVP in our Predecessor Entities and to acquire Titan's 32% interest
(including its 28% promoted interest) in the American Campus - Titan
Properties;

o repay certain existing property indebtedness; and

o enable us to qualify as a REIT for federal income tax purposes commencing
with the taxable year ending December 31, 2004.

Prior to the formation transactions, most of the interests in our
off-campus properties were owned by RAP Student Housing Properties, LLC, which
we refer to as "RAPSH", which was wholly-owned by Reckson Asset Partners, LLC,
which we refer to as "RAP." Our on-campus participating properties were owned
by American Campus Communities, LLC, which we refer to as "ACCL." Most of our
third party development, management and leasing services were also provided
through ACCL. Substantially all of the interests in ACCL, and an interest in a
number of our off-campus properties, were owned by RSVP. Four of our off-campus
properties, three of which are currently under construction, were owned by our
American Campus - Titan joint venture with Titan Investments, an unaffiliated
developer; we refer to our joint venture partner as "Titan" and to these
properties as the "American Campus - Titan Properties." Our executive officers,
certain of our senior officers and certain of our former employees are the sole
members of American Campus Partners, LLC, or "ACP", a limited liability company
that owns a 28% promoted interest in our Predecessor Entities.

Following are the principal steps in the formation transactions:

o We will issue shares of our common stock in this Offering (or
additional shares if the underwriters exercise their
over-allotment option in full). We will contribute the net proceeds of
this Offering to our Operating Partnership. ACCL will elect to become a
corporation, will be renamed and will serve as our Services Company.

o RSVP will contribute to RAP its interests in ACCL, its 95% interest (68%
after Titan's promoted interest) in American Campus Titan II, LLC (the
indirect owner of University Village at TU) and certain of our off-campus
properties. RAP will then contribute these interests to RAPSH.
Consequently, RAPSH will hold all of the interests of ACCL.

o Our Operating Partnership will acquire Titan's 32% interest (including
its 28% promoted interest) in the American Campus - Titan Properties in
exchange for approximately $5.7 million in cash, so that the American
Campus - Titan Properties will be wholly-owned by our Operating
Partnership. Certain of the terms of our business relationship with Titan
with regard to future property developments will also be restructured.

o Our Operating Partnership will contribute approximately $ million of
the net Offering proceeds to RAPSH to redeem all of the interests owned
by RAP in RAPSH. This amount will increase or decrease depending upon
whether the shares in this Offering are sold above or below $20 per share
(the mid-point in the range referred to on the cover of this prospectus).
Our existing investors will receive certain additional distributions from
us. As a result, our Operating Partnership will own all of the membership
interests in RAPSH.

o RAPSH will distribute its interest in The Village at Riverside to a
newly-formed entity affiliated with RAP and RSVP and controlled by RSVP.
We will continue to manage this property. We will also be granted a
four-year option from RAP and RSVP to acquire the property for a cash
price equal to its most recent net operating income (before debt service)
over the preceding four calendar quarters divided by an 8% "cap" rate,
but in no case less than $12 million during the option's first 24 months
and $13 million during the option's final 24 months.

o We will be granted a four-year option from RSVP to acquire its 23%
non-controlling interest in Dobie Center. The option price will be based
on a $52.0 million valuation of the property less the then outstanding
debt, which on June 1, 2004 was approximately $42.8 million, resulting in
a $2.1 million option price for RSVP's 23% interest at that time. We
currently manage this property.

o We will grant to certain of our senior officers profits interest Units
(PIUs) in our Operating Partnership representing approximately a 1.3%
limited partnership interest in our Operating Partnership.

o Up to $ million of the proceeds of this Offering will be used to
complete the construction of our three properties (University Village at
TU, University Village at Fresno and University Village at San
Bernardino) scheduled to be completed and opened in August 2004, with any
remaining proceeds after such completion (currently estimated to be
approximately $2 million) being distributed to RAP and RSVP.
Additionally, any insurance proceeds that we receive after the date of
this Offering with respect to our claims related to the Fresno State fire
may be used for unanticipated cost overruns at University Village at TU
or, absent such overruns, will be distributed to RAP and RSVP.

o Our executive officers and certain of our senior officers will receive on
account of their beneficial interest in ACP $ from the cash redemption
amount to be paid to RAP. These officers have agreed to use their
distribution from ACP, net of applicable taxes, to purchase common stock
in this Offering.

CONSEQUENCES OF THIS OFFERING AND THE FORMATION TRANSACTIONS

The following diagram depicts our ownership structure and the ownership
structure of our Operating Partnership and Services Company upon completion of
this Offering and the formation transactions:

[GRAPHIC OMITTED]

- -----------------
(1) Represents PIUs in the Operating Partnership

BENEFITS TO RELATED PARTIES

Upon completion of this Offering or in connection with the formation
transactions, the former owners of our properties will receive material
benefits, including:

o RAP will receive a cash payment of approximately $ million ([ ]% of the
proceeds of this Offering) for the redemption of its interests in RAPSH.
This amount will increase or decrease depending upon whether the shares
in this Offering are sold above or below $20 per share (the mid-point in
the range referred to on the cover of this prospectus).

o RAPSH will distribute The Village at Riverside to an entity owned by RAP
and RSVP (subject to a four-year purchase option that they have granted
to us), and RAPSH will maintain its guaranty of certain contingent
obligations of RAP and RSVP under the non-recourse indebtedness
encumbering this property.

o RAPSH will distribute to an affiliate of RAP and Titan certain assets
that we consider to be unrelated to our core business, including:

o fee title to a parcel of commercially-zoned land that is adjacent to the
University Village at San Bernardino; and

o interests 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.

o RAP and RSVP will be entitled to any savings in the budgeted completion
cost of our three off-campus construction properties, including any
insurance proceeds that we receive with respect to the fire at University
Village at Fresno that are not applied to the construction costs of
University Village at TU.

o Reckson and RSVP will, through their respective ownership interests in
RAP, be entitled to participate in the benefits realized by RAP that are
described above.

o Titan will sell its interest in the American Campus - Titan Properties to
our Operating Partnership and will receive approximately $5.7 million in
cash. Titan will also share in any construction cost savings received by
RAP and RSVP with respect to our three off-campus construction
properties.

o Our executive officers and certain members of senior management will
receive material benefits, including:

o A grant of profit interest units (PIUs) in our Operating Partnership
representing approximately a 1.3% limited partnership interest in the
Operating Partnership;

o $ from the cash redemption amount to be paid to RAP, on account of their
beneficial interests in ACP. The recipients have agreed to use these
proceeds, net of applicable taxes, to purchase common stock in this
Offering.

o Participation in our program of outperformance awards under our 2004
Incentive Plan with respect to the value of 3% of our outstanding stock
and Units;

o Employment agreements providing for salary, bonus and other benefits,
including, potentially, severance upon a termination of employment under
certain circumstances, as described under "Management -- Employment
Agreements"; and

o Indemnification by us for certain liabilities and expenses incurred as a
result of actions brought, or threatened to be brought, against them as
officers or directors.

Our non-employee directors will receive material benefits, including:

o A grant of restricted stock units with respect to shares of our common
stock pursuant to our 2004 Incentive Plan.

o Annual and per-meeting fees described under "Management -- Compensation
of Directors."

o Indemnification by us for certain liabilities and expenses incurred as a
result of actions brought, or threatened to be brought, against them as
directors.

o In addition to the underwriting discounts and advisory fees to be
received by Deutsche Bank Securities Inc., its affiliate, BT Holdings
(NY), Inc., is a creditor of, and holds a security interest in certain
assets of, RSVP's parent company, FrontLine Capital Group. FrontLine
filed for protection from creditors pursuant to Chapter 11 of the
Bankruptcy Code in June 2001. BT Holdings (NY), Inc. would therefore
potentially receive benefits from this Offering to the extent FrontLine
received and paid to its unsecured creditors any portion of the net
proceeds of this Offering or otherwise used such proceeds to repay any of
its senior or secured indebtedness. To the extent proceeds are used to
repay senior or secured indebtedness, proceeds from future asset sales by
FrontLine may be available for distribution to BT Holdings (NY), Inc. and
other unsecured creditors. Deutsche Bank Securities Inc. may therefore
have an interest in the successful completion of this Offering beyond the
underwriting discounts and advisory fees that it will receive.

RESTRICTIONS ON TRANSFER

Mr. William Bayless, our Chief Executive Officer and a director, Mr. Brian
Nickel, our Chief Investment Officer and a director, Mr. Mark Hager, our
Executive Vice President and Chief Financial Officer, and other members of
senior management have agreed not to sell or otherwise transfer or encumber any
shares of our common stock or securities convertible or exchangeable into our
common stock owned by them at the completion of this Offering (including,
without limitation, their PIUs) or thereafter acquired by them for a period of
14 months after the completion of this Offering.

RESTRICTIONS ON OWNERSHIP OF OUR CAPITAL STOCK

Our Charter generally prohibits any person or entity from actually or
constructively owning more than 9.8% of the outstanding shares of our stock.
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.

DISTRIBUTION POLICY

We intend to pay regular quarterly distributions to holders of our common
stock. We intend to pay a pro rata initial distribution with respect to the
period commencing on the completion of this Offering and ending September 30,
2004, based on $0.35 per share for a full quarter. On an annualized basis, this
would be $1.40 per share, or an initial annual distribution rate of
approximately 7.0% based on an assumed public offering price of $20 per share,
which is the mid-point of the range of prices indicated on the cover page of
this prospectus. This estimated initial annual distribution is expected to
significantly exceed our per-share estimated cash available for distribution to
our common stockholders for the 12-month period ended March 31, 2005. Our
ability to fund this distribution will depend, in part, upon the receipt of
cash flow from three properties that are currently under construction and are
scheduled to open in August 2004 and from fee income from third party services,
primarily from development services, the timing and amount of which are
inherently uncertain. To the extent we use our working capital

or borrowings under our new revolving credit facility to fund these
distributions, our financial condition and our ability to access these funds
for other purposes, such as the expansion of our business, could be adversely
affected.

OUR TAX STATUS

We will elect to be taxed as a REIT under Sections 856 through 860 of the Code,
commencing with our taxable year ending December 31, 2004. We believe that our
organization and proposed method of operation will enable us to meet the
requirements for qualification and taxation as a REIT for federal income tax
purposes. To maintain REIT status, we must meet a number of organizational and
operational requirements, including a requirement that we annually distribute
at least 90% of our REIT taxable income to our stockholders. As a REIT, we
generally will not be subject to federal income tax on REIT taxable income we
currently distribute to our stockholders. If we fail to qualify as a REIT in
any taxable year, we will be subject to federal income tax at regular corporate
rates. Even if we qualify for taxation as a REIT, we may be subject to some
federal, state and local taxes on our income or property and the income of our
Services Company will be subject to taxation at normal corporate rates and
state and local income tax where applicable. Further, unlike dividends received
from a corporation that is not a REIT, our distributions to individual
shareholders generally will not be eligible for the new lower tax rate on
dividends except in limited situations.

SUMMARY SELECTED FINANCIAL DATA

The following table sets forth our summary selected financial and operating
data on an unaudited pro forma basis and on a historical basis for the
Predecessor Entities. We have not presented historical information for American
Campus Communities, Inc. because we have not had any corporate activity since
our formation and because we believe that a discussion of the results of
American Campus Communities, Inc. would not be meaningful. The Predecessor
Entities combined historical financial information includes:

o the development and management service operations and real estate
operations of American Campus Communities, LLC;

o the real estate operations of RAP Student Housing Properties, LLC (RAPSH)
and its subsidiaries (including The Village at Riverside, which we will
not own after the formation transactions and completion of this Offering
and Coyote Village, which was transferred to Weatherford College in April
2004); and

o the joint venture properties and operations of American Campus - Titan,
LLC and American Campus - Titan II, LLC.

You should read the following summary selected financial data in conjunction
with the Predecessor Entities' combined historical financial statements and our
pro forma consolidated financial statements and the related notes and with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," which are included elsewhere in this prospectus.

The Predecessor Entities' historical combined balance sheet information as of
December 31, 2003 and 2002, and combined statements of operations information
for the years ended December 31, 2003, 2002 and 2001, have been derived from
the historical combined financial statements audited by Ernst & Young LLP,
independent auditors, whose report with respect thereto is included elsewhere
in this prospectus.

The Predecessor Entities' unaudited historical combined balance sheet
information as of March 31, 2004 and combined statement of operations for the
three months ended March 31, 2004 and 2003 are derived from our unaudited
historical combined financial statements, which we believe include all
adjustments (consisting of only normal recurring adjustments) necessary to
present fairly the information set forth therein. Our results of operations for
the interim period ended March 31, 2004 are not necessarily indicative of the
results to be obtained for the full fiscal year.

Our unaudited summary selected pro forma consolidated statements of operations,
for the three months ended March 31, 2004 and for the year ended December 31,
2003, assumes the completion of this Offering, the formation transactions and
the repayment of certain indebtedness as contemplated under "Use of Proceeds"
occurred as of the beginning of the period indicated, and the summary selected
pro forma consolidated balance sheet is presented as if this Offering, the
formation transactions, and the repayment of certain indebtedness had been
consummated on March 31, 2004, and therefore reflects certain assumptions that
are described in Notes to Pro Forma Condensed Consolidated Financial Statements
beginning on page F-6. The pro forma information does not purport to represent
what our financial condition or results of operations actually would have been
had this Offering, the formation transactions and the repayment of certain
indebtedness, in fact, occurred on such date or at the beginning of the period
indicated, or to project our financial condition or results of operations at
any future date or for any future period.

STATEMENT OF OPERATIONS DATA:
(In Thousands, except for share and per share data)

THREE MONTHS ENDED MARCH 31,
-----------------------------------------
HISTORICAL
PRO FORMA ------------------------
COMPANY
2004 2004 2003
---------------- ------------- ----------
(UNAUDITED)

Revenues:
Rental revenue ........... $ 13,603 $ 14,102 $ 13,786
Third party services ..... 2,082 2,070 1,834
Other income ............. (5) -- 27
-------------- -------- --------
Total revenues ......... 15,680 16,172 15,647

Operating expenses:
Facility operating
expenses ................ 5,381 5,680 5,678
Third party
development and
management
services ................ 1,265 1,265 1,252
General and
administrative .......... 849 474 405
Depreciation ............. 2,249 2,346 2,316
Ground lease expense 175 175 129
------------- -------- --------
Total operating
expenses ............. 9,919 9,940 9,780
------------- -------- --------
Operating income ......... 5,761 6,232 5,867

Nonoperating
expenses:
Interest income ......... 13 14 25
Interest expense ........ (3,643) (4,575) (4,397)
Amortization --
deferred finance
costs .................. (163) (163) (136)
Income tax .............. (8) -- --
-------------- -------- --------
Total nonoperating
expenses, net ........ (3,801) (4,724) (4,508)
Minority interest in
losses (earnings) ....... (25) 21 (12)
------------- -------- --------
Net income (loss) ........ $ 1,935 $ 1,529 $ 1,347
============= ======== ========
Pro forma basic
earnings per share
(unaudited) (1) ........ $ 0.16
Pro forma diluted
earnings per share
(unaudited) (2) ........ $ 0.16
Pro forma weighted
average common
shares outstanding
-- basic
(unaudited) ............ 12,025,700
Pro forma weighted
average common
shares outstanding
-- diluted
(unaudited) ............ 12,181,010

YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------------------
PRO FORMA HISTORICAL-PREDECESSOR ENTITIES
COMPANY --------------------------------------------------------------
2003 2003 2002 2001 2000 1999
---------------- ------------ ----------- ------------ ------------ -----------
(UNAUDITED)

Revenues:
Rental revenue ........... $ 48,516 $ 50,765 $ 48,984 $ 39,907 $ 22,587 $ 9,527
Third party services ..... 9,184 9,128 6,019 3,910 2,558 1,560
Other income ............. 12 28 355 88 -- 2
------------ ---------- --------- --------- -------- --------
Total revenues ......... 57,712 59,921 55,358 43,905 25,145 11,089

Operating expenses:
Facility operating
expenses ................ 23,277 24,503 24,220 18,727 9,712 4,319
Third party
development and
management
services ................ 5,389 5,389 4,441 3,373 1,955 1,593
General and
administrative .......... 4,278 2,778 2,001 1,659 1,492 675
Depreciation ............. 8,828 9,214 8,412 6,951 4,300 2,318
Ground lease expense 584 584 664 631 11 50
------------ ---------- --------- --------- -------- --------
Total operating
expenses ............. 42,356 42,468 39,738 31,341 17,470 8,955
------------ ---------- --------- --------- -------- --------
Operating income ......... 15,356 17,453 15,620 12,564 7,675 2,134

Nonoperating
expenses:
Interest income ......... 71 85 167 350 304 12
Interest expense ........ (14,171) (17,911) (17,392) (15,557) (9,404) (4,153)
Amortization --
deferred finance
costs .................. (584) (587) (564) (406) (467) (50)
Income tax .............. (8) -- -- -- -- --
-------------- ---------- --------- --------- -------- --------
Total nonoperating
expenses, net ........ (14,692) (18,413) (17,789) (15,613) (9,567) (4,191)
Minority interest in
losses (earnings) ....... (13) 16 30 110 20 --
------------- ---------- --------- --------- -------- --------
Net income (loss) ........ $ 651 $ (944) $ (2,139) $ (2,939) $ (1,872) $ (2,057)
============= ========== ========= ========= ======== ========
Pro forma basic
earnings per share
(unaudited) (1) ........ $ 0.05
Pro forma diluted
earnings per share
(unaudited) (2) ........ $ 0.05
Pro forma weighted
average common
shares outstanding
-- basic
(unaudited) ............ 12,025,700
Pro forma weighted
average common
shares outstanding
-- diluted
(unaudited) ............ 12,181,010

BALANCE SHEET DATA:
(In Thousands)

AS OF MARCH 31, 2004 AS OF DECEMBER 31,
----------------------- -----------------------------------------------------------
HISTORICAL - PREDECESSOR ENTITIES
PRO FORMA -----------------------------------------------------------
COMPANY HISTORICAL 2003 2002 2001 2000 1999
---------- ------------ ----------- ----------- ----------- ----------- -----------
(UNAUDITED)

Student housing properties, net ......... $301,790 $309,656 $292,620 $279,428 $265,989 $202,874 $119,036
Other assets, net ....................... 70,386 37,327 37,946 28,230 29,648 14,275 13,099
-------- -------- -------- -------- -------- -------- --------
Total assets ............................ $372,176 $346,983 $330,566 $307,658 $295,637 $217,149 $132,135
======== ======== ======== ======== ======== ======== ========
Construction debt and accounts
payable ................................ $ -- $ 39,095 $ 23,645 $ 1,167 $ 18,925 $ 21,922 $ 1,123
Mortgage notes .......................... 135,761 187,584 188,067 189,884 156,584 117,715 58,538
Bonds ................................... 61,010 61,010 61,010 57,865 58,940 38,640 39,270
Other liabilities ....................... 29,724 30,760 29,934 22,932 20,485 13,242 10,997
-------- -------- -------- -------- -------- -------- --------
Total liabilities ....................... 226,495 318,449 302,656 271,848 254,934 191,519 109,928
Minority interests ...................... 1,919 223 252 284 131 23 --
Owners' equity .......................... 143,762 28,311 27,658 35,526 40,572 25,607 22,207
-------- -------- -------- -------- -------- -------- --------
Total liabilities and owners'
equity ................................. $372,176 $346,983 $330,566 $307,658 $295,637 $217,149 $132,135
======== ======== ======== ======== ======== ======== ========

OTHER DATA:
(In Thousands)

THREE MONTHS ENDED
MARCH 31,
------------------------------ AS OF DECEMBER 31,
HISTORICAL --------------------------------------------------------------------
PRO FORMA ------------------ PRO FORMA HISTORICAL - PREDECESSOR ENTITIES
COMPANY COMPANY -------------------------------------------------------
2004 2004 2003 2003 2003 2002 2001 2000 1999
----------- --------- -------- -------- ------ ------- -------- -------- --------
(UNAUDITED) (UNAUDITED)

FUNDS FROM OPERATIONS: (3)
Net income (loss) before
minority interest ........... $1,960 $1,508 $1,359 $ 662 $ (960) $ (2,169) $ (3,049) $ (1,892) $ (2,057)
Plus depreciation ............ 2,180 2,277 2,251 8,551 8,937 8,233 6,807 4,188 2,258
------ ------ ------ ------ ------ -------- -------- -------- --------
Funds from operations (3) (4) $4,140 $3,785 $3,610 $9,213 $7,977 $ 6,064 $ 3,758 $ 2,296 $ 201
====== ====== ====== ====== ====== ======== ======== ======== ========

THREE MONTHS ENDED
MARCH 31, AS OF DECEMBER 31,
------------------------- ----------- ------------------------------------------------------
HISTORICAL HISTORICAL - PREDECESSOR ENTITIES
------------------------- ----------- ------------------------------------------------------
2004 2003 2003 2002 2001 2000 1999
------------- ----------- ----------- ------------ -------------- --------------------------
(UNAUDITED)

CASH FLOW INFORMATION:
Net cash provided by operations ..... $ 5,498 $ 3,474 $ 6,258 $ 7,959 $ 5,338 $ 3,577 $ 1,512
Net cash (used in) investing ........ $ (19,213) $ (4,401) $ (33,737) $ (21,678) $ (68,540) $ (87,652) $ (44,087)
Net cash provided by financing ...... $ 12,742 $ 3,513 $ 22,141 $ 11,335 $ 72,832 $ 84,215 $ 43,997

SELECTED PROPERTY INFORMATION (5):

AS OF MARCH 31, AS OF DECEMBER 31,
------------------------- -------------------------------------------------------------
2004 2003 2003 2002 2001 2000 1999
----------- ----------- ----------- ----------- ----------- ---------- ------

Units ............. 3,643 3,459 3,567 3,459 3,377 2,781 1,461
Beds .............. 10,826 10,336 10,546 10,336 10,027 8,232 4,668
Occupancy ......... 91.0% 92.4% 91.5% 91.0% 93.5% 93.3% N/A

- -----------------
(1) Pro forma basic earnings per share is computed assuming this Offering was
consummated as of the first day of the period presented and equals pro
forma net income divided by the number of shares of our common stock to be
outstanding after this Offering.

(2) Pro forma diluted earnings per share is computed assuming this Offering was
consummated as of the first day of the period presented. Pro forma diluted
earnings per share equals pro forma net income divided by the sum of the
number of shares of our common stock to be outstanding and common
equivalent shares outstanding after this Offering.

(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) We believe it is appropriate to make certain adjustments to FFO to
appropriately reflect the effect of our on-campus participating
properties. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations."

(5) Includes the Village at Riverside and Coyotte Village, but does not include
three properties currently under construction.

THIS OFFERING

Common stock offered by us ......... shares

Common stock to be outstanding
after this Offering .............. shares(1)

Common stock and Operating
Partnership Units to be
outstanding after this Offering .. shares/Units(1)(2)

Use of proceeds .................... We intend to use the net proceeds of
this Offering:

o to redeem the interests held by our
former owners in our Predecessor
Entities in the formation
transactions ($ million)(3)(4);

o to repay certain existing
indebtedness and construction
accounts payable ($86.4 million as of
March 31, 2004), including prepayment
penalties and exit fees;

o to fund the remaining costs
associated with the completion and
opening by August 2004 of three of
our properties ($ million as of
June, 2004); and

o for general corporate purposes.

Proposed New York Stock
Exchange symbol .................. ACC

- -----------------

(1) Excludes shares issuable upon exercise of the underwriters'
over-allotment option, shares available for future issuance
under our incentive award plan and shares underlying
restricted stock units granted under our incentive award plan to our
directors and certain senior employees.

(2) Includes 155,310 PIUs granted by us concurrently with this Offering to
certain key employees of our Company. Upon the occurrence of certain
capital account equalization events, the PIUs will become ordinary Units
exchangeable for shares of our Company on a one-for-one basis.

(3) This amount will increase or decrease depending upon whether the shares in
this Offering are sold above or below $20 per share (the mid-point in the
range referred to on the cover of this prospectus). Our existing investors
will receive certain additional distributions from us.

(4) Our executive officers and certain of our senior officers will receive on
account of their beneficial interest in ACP $ from the cash redemption
amount to be paid to RAP. These officers have agreed to use their
distribution from ACP, net of applicable taxes, to purchase common stock
in this Offering.

RISK FACTORS

Investment in our common stock involves a high degree of risk. You should
therefore carefully consider the material risks of an investment in our common
stock, which are discussed in this section, as well as the other information
contained in this prospectus before making your investment decision. The
occurrence of any of the following risks could materially and adversely affect
our financial condition, results of operations, cash flow, per share trading
price and ability to satisfy our debt service obligations and pay dividends or
distributions to you and could cause you to lose all or a part of your
investment. Some statements in this prospectus, including statements in the
following risk factors, constitute forward looking statements. Please refer to
the section entitled "Forward Looking Statements."

RISKS RELATED TO OUR PROPERTIES AND OUR BUSINESS

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 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. In addition, we are subject to increased
leasing risk on our properties under construction and future acquired
properties based on our lack of experience leasing those properties and
unfamiliarity with their leasing cycles. Student housing properties are also
typically leased during a limited leasing season that typically 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.

A change in university admission policies could adversely affect us. For
example, if a university reduces the number of student admissions or requires
that a certain class of students (e.g. freshman) live in a university owned
facility, the demand for beds at our properties may be reduced and our
occupancy rates may decline. While we may engage in marketing efforts to
compensate for such change in admission policy, we may not be able to effect
such marketing efforts prior to the commencement of the annual lease-up period
or our additional marketing efforts may not be successful.

We rely on our relationships with colleges and universities for referrals of
prospective student-tenants or for mailing lists of prospective student-tenants
and their parents. Many of these colleges and universities own and operate
their own competing on-campus facilities (see below). The failure to maintain
good relationships with these colleges and universities could therefore have a
material adverse effect on us. If colleges and universities refuse to make
their lists of prospective student- tenants and their parents available to us
or increase the costs of these lists, the increased costs or failure to obtain
such lists could also have a material adverse effect on us.

Federal and state laws require colleges to publish and distribute reports of
on-campus crime statistics, which may result in negative publicity and media
coverage associated with crimes occurring in the vicinity of, or on the
premises of, our on-campus properties. Reports of crime or other negative
publicity regarding the safety of the students residing on, or near, our
properties may have an adverse effect on both our on-campus and off-campus
business.

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.

Currently, the industry is fragmented with no participant holding a significant
market share. There are a number of student housing complexes that are located
near or in the same general vicinity of many of our owned properties and that
compete directly with us. Such competing student housing complexes may be newer
than our properties, located closer to campus, charge less rent, possess more
attractive amenities or offer more services or offer shorter term or more
flexible leases.

Rental income at a particular property could also be affected by a number of
other factors, including the construction of new on-campus and off-campus
residences, increases or decreases in the general levels of rents for housing
in competing communities, increases or decreases in the number of students
enrolled at one or more of the colleges or universities in the market of a
property and other general economic conditions.

We believe that a number of other large national companies with substantial
financial and marketing resources may be potential entrants in the student
housing business. The entry of one or more of these companies could increase
competition for students and for the acquisition, development and management of
other student housing properties.

WE MAY BE UNABLE TO SUCCESSFULLY COMPLETE AND OPERATE OUR PROPERTIES OR OUR
THIRD PARTY DEVELOPED PROPERTIES.

We intend to continue to develop and construct student housing in accordance
with our growth strategies, including our three off-campus properties currently
under construction. These activities may also include any of the following
risks:

o we may be unable to obtain construction financing on favorable terms or
at all;

o we may be unable to obtain permanent financing on favorable terms or at
all if we finance development projects through construction loans;

o we may not complete development projects on schedule, within budgeted
amounts or in conformity with building plans and specifications,
including our three construction properties under development;

o we may encounter delays or refusals in obtaining all necessary zoning,
land use, building, occupancy, and other required governmental permits
and authorizations;

o 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;

o we may become liable for injuries and accidents occurring during the
construction process and for environmental liabilities including off-site
disposal of construction materials;

o we may decide to abandon our development efforts if we determine that
continuing the project would not be in our best interests; and

o we may encounter strikes, weather, government regulations and other
conditions beyond our control.

As we develop additional properties, we will be subject to risks associated
with managing new properties, including lease-up and integration risks. In
addition, new development activities, regardless of whether or not they are
ultimately successful, typically will require a substantial portion of the time
and attention of our development and management personnel. Newly developed
properties may not perform as expected.

We anticipate that we will, from time to time, elect not to proceed with
ongoing development projects. If we elect not to proceed with a development
project, the development costs associated therewith will ordinarily be charged
against income for the then-current period. Any such charge could have a
material adverse effect on our results of operations in the quarter in which
the charge is taken.

We may in the future develop properties nationally, internationally or in other
geographic regions than we currently operate. While we believe the development
of properties will result in favorable returns on our investment, presently, we
do not possess the same level of familiarity with development in these markets,
which could adversely affect our ability to develop such properties
successfully or at all or to achieve expected performance. Future development
opportunities may not be available to us on terms that meet our investment
criteria or we may be unsuccessful 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 typically provide guarantees of timely completion of projects that we
develop for third parties. In certain cases, our contingent liability under
these guarantees may exceed our development fee from the project. Although we
seek to mitigate this risk by, among other things, obtaining similar guarantees
from the project contractor, we could sustain significant losses if development
of a project were to be delayed or stopped and we were unable to cover our
guarantee exposure with the guarantee received from the project contractor.

WE MAY BE UNABLE TO SUCCESSFULLY ACQUIRE PROPERTIES ON FAVORABLE TERMS.

Our future growth will be dependent upon our ability to successfully acquire
new properties on favorable terms. As we acquire additional properties, we will
be subject to risks associated with managing new properties, including lease-up
and integration risks. Newly acquired properties may not perform as expected
and newly acquired properties may have characteristics or deficiencies unknown
to us at the time of acquisition. Future acquisition opportunities may not be
available to us on terms that meet our investment criteria or we may be
unsuccessful 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.

Our ability to acquire properties on favorable terms and successfully operate
them may be exposed to the following significant risks:

o potential inability to acquire a desired property because of competition
from other real estate investors;

o competition from other potential acquirers may significantly increase the
purchase price;

o we may be unable to finance an acquisition on favorable terms or at all;

o we may have to incur significant capital expenditures to improve or
renovate acquired properties;

o we may be unable to quickly and efficiently integrate new acquisitions,
particularly acquisitions of portfolios of properties, into our existing
operations;

o market conditions may result in higher than expected vacancy rates and
lower than expected rental rates; and

o 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.

Our failure to finance property acquisitions on favorable terms, or operate
acquired properties to meet our financial expectations, could adversely affect
us.

OUR DEBT LEVEL REDUCES CASH AVAILABLE FOR DISTRIBUTION AND MAY EXPOSE US TO
THE RISK OF DEFAULT UNDER OUR DEBT OBLIGATIONS.

Upon completion of this Offering and related transactions, our total
consolidated indebtedness will be approximately $196.8 million, which includes
the consolidated indebtedness of our on-campus participating properties of
approximately $78.2 million. Our debt service obligations will expose us to

the risk of default and reduce (or eliminate) cash resources that are available
to operate our business or pay dividends or that are necessary to maintain our
REIT qualification. There is no limit on the amount of indebtedness that we may
incur. Concurrently with this Offering, we will enter into a revolving credit
facility with affiliates of Citigroup Global Markets Inc. and Deutsche Bank
Securities Inc., two of our underwriters, as joint lead arrangers, which
facility will be available following this Offering to fund future property
acquisitions, and for other working capital needs, including the payment of
dividends or distributions to our shareholders. Our ability to borrow from time
to time under this facility will be 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, including the following:

o we may be unable to borrow additional funds as needed or on favorable
terms;

o 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;

o we may be forced to dispose of one or more of our properties, possibly on
disadvantageous terms;

o 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; and

o foreclosures could create taxable income without accompanying cash
proceeds, a circumstance which 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.

University systems and educational institutions typically award us development
services contracts on the basis of a competitive award process, but such
contracts are typically executed following the formal approval of the
transaction by the institution's governing body. In the intervening period, we
may incur significant pre-development and other costs in the expectation that
the development services contract will be executed. If an institution's
governing body did not ultimately approve our selection and the underlying
terms of the pending development, we may not be able to recoup these costs from
the institution and the resulting losses could be material.

OUR AWARDED PROJECTS MAY NOT BE SUCCESSFULLY STRUCTURED OR FINANCED AND MAY
DELAY OUR RECOGNITION OF REVENUES.

THREE OF OUR PROPERTIES ARE UNDER CONSTRUCTION, AND WE MAY ENCOUNTER DELAYS
IN COMPLETION OR EXPERIENCE COST OVERRUNS.

Three of our properties, which upon completion will comprise over 21.5% of the
beds at our 12 off-campus properties, are under construction and are subject to
the various risks relating to properties that are under construction referred
to elsewhere in these risk factors, including the risks that we may encounter
delays in completion and that these three projects may experience cost
overruns.

These three properties may not be completed on time for the 2004-2005 academic
year. In the event we do not complete the construction of our owned property at
Temple University by the beginning of the 2004-2005 academic year, we are
required to provide alternative housing to the students with whom we have
signed leases. In addition, if we do not complete the construction of the San
Bernardino and Fresno properties by the beginning of the 2004-2005 academic
year we may likewise

seek to provide alternative housing to the students with whom we have signed
leases. We have not made any arrangements for such alternative housing for any
of these three projects and we would likely incur significant expenses in the
event we provide such housing. If construction is not completed prior to the
beginning of the 2004-2005 academic year, students may attempt to break their
leases and our occupancy at these properties for the 2004-2005 academic year
may suffer.

OUR GUARANTEES COULD RESULT IN LIABILITIES IN EXCESS OF OUR DEVELOPMENT FEES.

In third party developments, we typically provide guarantees of the obligations
of the developer, including development budgets and timely project completion.
These guarantees include, among other things, the cost of providing alternate
housing for students in the event we do not timely complete a development
project. These guarantees typically exclude delays resulting from force majeure
and also, in third party transactions, are typically limited in amount to the
amount of our development fees from the project. In certain cases, however, our
contingent liability under these guarantees has exceeded our development fee
from the project. Our obligation under these guarantees typically expires upon
completion of certain of our obligations with respect to the project.

UNIVERSITIES HAVE THE RIGHT TO TERMINATE OUR PARTICIPATING GROUND LEASES.

The ground leases through which we own our on-campus participating properties
provide that the university lessor may purchase our interest in and assume the
management of the facility; the purchase price is calculated at the discounted
present cash value of our leasehold interest. The exercise of such buyouts
would result in a significant reduction in our portfolio.

CALIFORNIA STATE UNIVERSITY, SAN BERNARDINO MAY EXERCISE ITS OPTION TO BUY
UNIVERSITY VILLAGE AT SAN BERNARDINO.

The California State University has an option for $28.3 million to purchase the
University Village at San Bernardino from us, which is currently under
construction, which option expires 150 days after notice of completion of
construction has been given to the University. We expect to give this notice
during the month of August 2004. We believe the University will seek approval
to exercise this option. If California State University exercises its option,
we will no longer own or manage this property and may be unable to reinvest the
proceeds we receive at similar yields in a timely manner.

RISKS RELATED TO THE REAL ESTATE INDUSTRY

OUR PERFORMANCE AND VALUE ARE SUBJECT TO RISKS ASSOCIATED WITH REAL ESTATE
ASSETS AND WITH THE REAL ESTATE INDUSTRY.

Our ability to make expected distributions to our stockholders depends on our
ability to generate cash revenues in excess of expenses, scheduled debt service
obligations and capital expenditure requirements. Events and conditions
generally applicable to owners and operators of real property that are beyond
our control may decrease cash available for distribution and the value of our
properties. These events include:

o general economic conditions;

o rising level of interest rates;

o local oversupply, increased competition or reduction in demand for
student housing;

o inability to collect rent from tenants;

o vacancies or our inability to rent space on favorable terms;

o inability to finance property development and acquisitions on favorable
terms;

o increased operating costs, including insurance premiums, utilities, and
real estate taxes;

o costs of complying with changes in governmental regulations;

o the relative illiquidity of real estate investments;

o decreases in student enrollment at particular colleges and universities;

o changes in university policies related to admissions; and

o changing student demographics.

In addition, periods of economic slowdown or recession, rising interest rates
or declining demand for real estate, or the public perception that any of these
events may occur, could result in a general decline in rents or an increased
incidence of defaults under existing leases, which would adversely affect us.

POTENTIAL LOSSES MAY NOT BE COVERED BY INSURANCE.

We carry comprehensive liability, fire, earthquake, terrorism, business
interruption, vandalism and malicious mischief, extended coverage perils, all
physical loss perils, commercial general liability, flood (when the property is
located in whole or in material part in a designated flood plain area),
workers' compensation and rental loss insurance covering all of the properties
in our portfolio under various policies. We believe the policy specifications
and insured limits are appropriate and adequate given the relative risk of
loss, the cost of the coverage and industry practice. There are, however,
certain types of losses (such as property damage from generally unsecured
losses such as riots, wars, employment discrimination losses, punitive damage
awards or acts of God) that may be either uninsurable or not economically
insurable. Some of our policies are insured subject to limitations involving
large deductibles or co-payments and policy limits which may not be sufficient
to cover losses. In addition, we may discontinue earthquake, terrorism or other
insurance on some or all of our properties in the future if the cost of
premiums for any of these policies exceeds, in our judgment, the value of the
coverage discounted for the risk of loss.

If we experience a loss which is uninsured or which exceeds policy limits, we
could lose the capital invested in the damaged properties as well as the
anticipated future cash flows from those properties. In addition, if the
damaged properties are subject to recourse indebtedness, we would continue to
be liable for the indebtedness, even if these properties were irreparably
damaged. In the event of a significant loss at one or more of the option or
excluded properties covered by our policies that cover the properties in our
portfolio, the remaining insurance under our policy, if any, could be
insufficient to adequately insure our existing properties. In such event,
securing additional insurance, if possible, could be significantly more
expensive than our current policy.

FUTURE TERRORIST ATTACKS IN THE UNITED STATES COULD HARM THE DEMAND FOR AND
THE VALUE OF OUR PROPERTIES.

Future terrorist attacks in the U.S., such as the attacks that occurred in New
York and Virginia on September 11, 2001, and other acts of terrorism or war, or
threats of the same, could harm the demand for and the value of our properties.
Certain of our properties are near universities which contain well-known
landmarks and may be perceived as more likely terrorist targets than similar,
less recognizable properties. A decrease in demand in our markets would make it
difficult for us to renew or re-lease our properties at lease rates equal to or
above historical rates.

Terrorist attacks also could directly impact the value of our properties
through damage, destruction, loss, or increased security costs, and the
availability of insurance for such acts may be limited or may cost more. If we
receive casualty proceeds, we may not be able to reinvest such proceeds
profitably or at all, and we may be forced to recognize taxable gain on the
affected property.

UNIONIZATION OR WORK STOPPAGES COULD HAVE AN ADVERSE EFFECT ON US.

We are at times required to use unionized construction workers or to pay the
prevailing wage in a jurisdiction to such workers. Due to the highly labor
intensive and price competitive nature of the construction business, the cost
of unionization and/or prevailing wage requirements for new developments could
be substantial. Unionization and prevailing wage requirements could adversely
affect a new development's profitability. Union activity or a union workforce
could increase the risk of a strike, which would adversely affect our ability
to meet our construction timetables.

WE COULD INCUR SIGNIFICANT COSTS RELATED TO GOVERNMENT REGULATION AND PRIVATE
LITIGATION OVER ENVIRONMENTAL MATTERS.

Under various environmental laws, including the Comprehensive Environmental
Response, Compensation and Liability Act ("CERCLA"), a current or previous
owner or operator of real property may be liable for contamination resulting
from the release or threatened release of hazardous or toxic substances or
petroleum at that property, and an entity that arranges for the disposal or
treatment of a hazardous or toxic substance or petroleum at another property
may be held jointly and severally liable for the cost to investigate and clean
up such property or other affected property. Such parties are known as
potentially responsible parties ("PRPs"). Such environmental laws often impose
liability without regard to whether the owner or operator knew of, or was
responsible for, the presence of the contaminants, and the costs of any
required investigation or cleanup of these substances can be substantial. PRPs
are liable to the government as well as to other PRPs who may have claims for
contribution. The liability is generally not limited under such laws and could
exceed the property's value and the aggregate assets of the liable party. The
presence of contamination or the failure to remediate contamination at our
properties may expose us to third party liability for personal injury or
property damage, or adversely affect our ability to sell, lease or develop the
real property or to borrow using the real property as collateral.

Environmental laws also impose ongoing compliance requirements on owners and
operators of real property. Environmental laws potentially affecting us address
a wide variety of matters, including, but not limited to, asbestos-containing
building materials ("ACBM"), storage tanks, stormwater and wastewater
discharges, lead-based paint, wetlands, and hazardous wastes. Failure to comply
with these laws could result in fines and penalties or expose us to third party
liability. Some of our properties may have conditions that are subject to these
requirements and we could be liable for such fines or penalties or liable to
third-parties, as described below in "Business and Properties -- Regulation --
Environmental Matters."

EXISTING CONDITIONS AT SOME OF OUR PROPERTIES MAY EXPOSE US TO LIABILITY
RELATED TO ENVIRONMENTAL MATTERS.

Some of the properties in our portfolio may contain asbestos-containing
building materials, or ACBMs. Environmental laws require that ACBMs be properly
managed and maintained, and may impose fines and penalties on building owners
or operators for failure to comply with these requirements. Also, some of the
properties in our portfolio contain, or may have contained, or are adjacent to
or near other properties that have contained or currently contain storage tanks
for the storage of petroleum products or other hazardous or toxic substances.
These operations create a potential for the release of petroleum products or
other hazardous or toxic substances. Third parties may be permitted by law to
seek recovery from owners or operators for personal injury associated with
exposure to contaminants, including, but not limited to, petroleum products,
hazardous or toxic substances, and asbestos fibers. Also, some of the
properties may contain regulated wetlands that can delay or impede development
or require costs to be incurred to mitigate the impact of any disturbance.
Absent appropriate permits, we can be held responsible for restoring wetlands
and be required to pay fines and penalties.

Some of the properties in our portfolio may contain microbial matter such as
mold, mildew and viruses. The presence of microbial matter could adversely
affect our results of operations. In addition, if any property in our portfolio
is not properly connected to a water or sewer system, or if the integrity of
such systems are breached, microbial matter or other contamination can develop.
If this were to occur, we could incur significant remedial costs and we may
also be subject to material private damage claims and awards, which could be
material. If we become subject to claims in this regard, it could materially
and adversely affect us and our insurability for such matters in the future.

pursue PRPs based on their actual contribution to the contamination. PRPs are
liable for the costs of responding to the hazardous substances. Each of Commons
on Apache, The Village at University and University Village at San Bernardino
are located within federal Superfund sites. EPA designated these areas as
Superfund sites because groundwater beneath these areas is contaminated. We
have not been named as a PRP with respect to these sites.

Independent environmental consultants conducted Phase I environmental site
assessments on all of the owned properties and on-campus participating
properties in our existing portfolio. Phase I environmental site assessments
are intended to evaluate information regarding the environmental condition of
the surveyed property and surrounding properties based generally on visual
observations, interviews and certain publicly available databases. These
assessments do not typically take into account all environmental issues
including, but not limited to, testing of soil or groundwater, comprehensive
asbestos survey or an invasive inspection for the presence of mold
contamination. In some cases where prior use was a concern, additional study
was undertaken.

These assessments may have failed to reveal all environmental conditions,
liabilities, or compliance concerns. Material environmental conditions,
liabilities, or compliance concerns may have arisen after the assessments were
conducted or may arise in the future; and future laws, ordinances or
regulations may impose material additional environmental liability.

The costs of future environmental compliance may affect our ability to pay
distributions to you and such costs or other remedial measures may be material
to us.

WE ONLY CARRY ENVIRONMENTAL INSURANCE ON CERTAIN PROPERTIES AND MAY INCUR
ENVIRONMENTAL LIABILITIES.

We do not carry environmental insurance on most of the properties in our
portfolio. We only carry environmental insurance on our on-campus participating
properties and University Village at TU. Environmental liability at a property
not covered by insurance or not covered by sufficient insurance may have a
material adverse effect on our financial condition, results of operations, cash
flow, the trading price of our common stock or our ability to satisfy our debt
service obligations and pay dividends or distributions to you.

WE MAY INCUR SIGNIFICANT COSTS COMPLYING WITH THE AMERICANS WITH
DISABILITIES ACT AND SIMILAR LAWS.

Under the Americans with Disabilities Act of 1990, or the ADA, all public
accommodations must meet federal requirements related to access and use by
disabled persons. Additional federal, state and local laws also may require
modifications to our properties, or restrict our ability to renovate our
properties. For example, the Fair Housing Amendments Act of 1988, or FHAA,
requires apartment properties first occupied after March 13, 1990 to be
accessible to the handicapped. We have not conducted an audit or investigation
of all of our properties to determine our compliance with present requirements.
Noncompliance with the ADA or FHAA could result in the imposition of fines or
an award or damages to private litigants and also could result in an order to
correct any non-complying feature. We cannot predict the ultimate amount of the
cost of compliance with the ADA, FHAA or other legislation. If we incur
substantial costs to comply with the ADA, FHAA or any other legislation, we
could be materially and adversely affected.

WE MAY INCUR SIGNIFICANT COSTS COMPLYING WITH OTHER REGULATIONS.

The properties in our portfolio are subject to various federal, state and local
regulatory requirements, such as state and local fire and life safety
requirements. If we fail to comply with these various requirements, we might
incur governmental fines or private damage awards. Furthermore, existing
requirements could change and require us to make significant unanticipated
expenditures that would materially and adversely affect us.

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.

We may co-invest in the future with third parties through partnerships, joint
ventures or other entities, acquiring non-controlling interests in or sharing
responsibility for managing the affairs of a property, partnership, joint
venture or other entity. In such event, we would not have sole decision-making
control regarding the property, partnership, joint venture or other entity.
Investments in partnerships, joint ventures, or other entities may, under
certain circumstances, involve risks not present were a third party not
involved, including the possibility that partners or co-venturers might become
bankrupt or fail to fund their share of required capital contributions.
Partners or co-venturers also may have economic or other business interests or
goals which are inconsistent with our business interests or goals, and may be
in a position to take actions contrary to our preferences, policies or
objectives. Such investments also will have the potential risk of impasses on
decisions, such as a sale, because neither we nor the partner or co-venturers
would have full control over the partnership or joint venture. Disputes between
us and partners or co-venturers may result in litigation or arbitration that
would increase our expenses and prevent our officers and/or directors from
focusing their time and effort exclusively on our business. Consequently,
actions by or disputes with partners or co-venturers might result in subjecting
properties owned by the partnership, joint venture or other entity to
additional risk. In addition, we may in certain circumstances be liable for the
actions of our third party partners or co-venturers.

RISKS RELATED TO OUR ORGANIZATION AND STRUCTURE

WE ARE RECENTLY ORGANIZED AND HAVE NO OPERATING HISTORY.

We have been recently organized and have no operating history. In addition, all
of our properties have been acquired or developed by the Predecessor Entities
within the past eight years and have limited operating histories under current
management. Mr.William Bayless, our Chief Executive Officer since October 2003,
was one of our co-founders and previously served as our Chief Operating Officer
since 1995. In October 2003, Mr.Bayless replaced our former president and chief
executive officer who had served in that capacity since 1997. Consequently, our
historical operating results and the financial data set forth in this
prospectus may not be useful in assessing our likely future performance. The
operating performance of the properties may decline under our management. We
may not be able to generate sufficient cash from operations to make anticipated
distributions.

We will also be subject to the risks generally associated with the formation of
any new business. Our management has no experience in running a public company
or in operating in accordance with the requirements for maintaining our
qualification as a REIT.

TO MAINTAIN OUR REIT STATUS, WE MAY BE FORCED TO LIMIT THE ACTIVITIES OF
OUR SERVICES COMPANY.

To maintain our status as a REIT, no more than 20% of the value of our total
assets may consist of the securities of one or more taxable REIT subsidiaries,
such as our Services Company. Certain of our activities, such as our third
party development, management and leasing services, must be conducted through
our Service Company for us to maintain our REIT qualification. In addition,
certain non-customary services must be provided by a taxable REIT subsidiary or
an independent contractor. If the revenues from such activities create a risk
that the value of our Services Company, based on revenues or otherwise,
approaches the 20% threshold, we will be forced to curtail such activities or
take other steps to remain under the 20% threshold. Since the 20% threshold is
based on value, it is possible that the IRS could successfully contend that the
value of our Services Company exceeds the 20% threshold even if our Services
Company accounts for less than 20% of our consolidated revenues, income or cash
flow. After the formation transactions, our on-campus participating properties
will be held by our Services Company. Consequently, income earned from our
on-campus participating properties will be taxable income of our Services
Company.

A taxable REIT subsidiary is not permitted to directly or indirectly operate or
manage a "hotel, motel or other establishment more than one-half of the
dwelling units in which are used on a transient basis." We

have been advised by counsel that the proposed method of operating our Services
Company will not be considered to constitute such an activity. Future Treasury
Regulations or other guidance interpreting the applicable provisions might
adopt a different approach, or the IRS might disagree with the conclusion of
our counsel. In such event we might be forced to change our method of operating
our Services Company, which could adversely affect us, or the Services Company
could fail to qualify as a taxable REIT subsidiary, which could cause us to
fail to qualify as a REIT.

FAILURE TO QUALIFY AS A REIT WOULD HAVE SIGNIFICANT ADVERSE CONSEQUENCES TO
US AND THE VALUE OF OUR STOCK.

We intend to operate in a manner that will allow us to qualify as a REIT for
federal income tax purposes under the Code. We have not requested and do not
plan to request a ruling from the IRS that we qualify as a REIT, and the
statements in the prospectus are not binding on the IRS or any court. If we
lose our REIT status, we will face serious tax consequences that would
substantially reduce or eliminate the funds available for distribution to you
for each of the years involved because:

o 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;

o we also could be subject to the federal alternative minimum tax and
possibly increased state and local taxes; and

o 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.

In addition, if we fail to qualify as a REIT, we will not be required to pay
dividends to stockholders, and all dividends to stockholders will be subject to
tax as ordinary income to the extent of our current and accumulated earnings
and profits. As a result of all these factors, our failure to qualify as a REIT
also could impair our ability to expand our business and raise capital, and
would adversely affect the value of our common stock.

Qualification as a REIT involves the application of highly technical and
complex Code provisions for which there are only limited judicial and
administrative interpretations. The complexity of these provisions and of the
applicable Treasury Regulations that have been promulgated under the Code is
greater in the case of a REIT that, like us, holds its assets through a
partnership or a limited liability company. The determination of various
factual matters and circumstances not entirely within our control may affect
our ability to qualify as a REIT. In order to qualify as a REIT, we must
satisfy a number of requirements, including requirements regarding the
composition of our assets and "two gross income tests": (a) at least 75% of our
gross income in any year must be derived from qualified sources, such as "rents
from real property," mortgage interest, dividends from other REITs and gains
from sale of such assets, and (b) at least 95% of our gross income must be
derived from sources meeting the 75% income test above, and other passive
investment sources, such as other interest and dividends and gains from sale of
securities. Also, we must pay dividends to stockholders aggregating annually at
least 90% of our REIT taxable income, excluding capital gains. In addition,
legislation, new regulations, administrative interpretations or court decisions
may adversely affect our investors, our ability to qualify as a REIT for
federal income tax purposes or the desirability of an investment in a REIT
relative to other investments.

Even if we qualify as a REIT for federal income tax purposes, we may be subject
to some federal, state and local taxes on our income or property and, in
certain cases, a 100% penalty tax, in the event we sell property as a dealer or
if our Services Company enters into agreements with us or our tenants on a
basis that is determined to be other than an arm's length basis.

TO MAINTAIN OUR REIT STATUS, WE MAY BE FORCED TO BORROW FUNDS ON A
SHORT-TERM BASIS DURING UNFAVORABLE MARKET CONDITIONS.

In order to maintain our qualification as a REIT, we are required under 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. 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. Our access to third party sources of capital depends, in
part, on:

o general market conditions;

o our current debt levels and the number of properties subject to
encumbrances;

o our current performance and the market's perception of our growth
potential;

o our cash flow and cash dividends; and

o the market price per share of our common stock.

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 maintain our qualification as a REIT.

OUR CHARTER CONTAINS RESTRICTIONS ON THE OWNERSHIP AND TRANSFER OF OUR STOCK.

Our Charter provides that, subject to certain exceptions, no person or entity
may beneficially own, or be deemed to own by virtue of the applicable
constructive ownership provisions of the Code, more than 9.8% (by value, by
number of shares or by voting power, 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 the "ownership limit." A person or entity that becomes subject
to the ownership limit by virtue of a violative transfer that results in a
transfer to a trust is referred to as a "purported beneficial transferee" if,
had the violative transfer been effective, the person or entity would have been
a record owner and beneficial owner or solely a beneficial owner of our stock,
or is referred to as a "purported record transferee" if, had the violative
transfer been effective, the person or entity would have been solely a record
owner of our stock.

The constructive ownership rules under the Code are complex and may cause stock
owned actually or constructively by a group of related individuals and/or
entities to be owned constructively by one individual or entity. As a result,
the acquisition of less than 9.8% of our stock (or the acquisition of an
interest in an entity that owns, actually or constructively, our stock) by an
individual or entity, could, nevertheless cause that individual or entity, or
another individual or entity, to own constructively in excess of 9.8% of our
outstanding stock and thereby subject the stock to the applicable 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. These ownership limits 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.

CERTAIN TAX AND ANTI-TAKEOVER PROVISIONS OF OUR CHARTER AND BYLAWS MAY
INHIBIT A CHANGE OF OUR CONTROL.

Certain provisions contained in our Charter and bylaws and the Maryland General
Corporation Law may discourage a third party from making a tender offer or
acquisition proposal to us. If this were to happen, it could delay, deter or
prevent a change in control or the removal of existing management. These
provisions also may delay or prevent the stockholders from receiving a premium
for their shares of common stock over then-prevailing market prices. These
provisions include:

o the REIT ownership limit described above;

o authorization of the issuance of our preferred shares with powers,
preferences or rights to be determined by our Board of Directors;

o the right of our Board of Directors, without a stockholder vote, to
increase our authorized shares and classify or reclassify unissued
shares;

o advance-notice requirements for stockholder nomination of directors and
for other proposals to be presented to stockholder meetings; and

o the requirement that a two-thirds vote of the holders of common stock is
needed to remove a member of our Board of Directors.

THE MARYLAND BUSINESS STATUTES ALSO IMPOSE POTENTIAL RESTRICTIONS ON A
CHANGE OF CONTROL OF OUR COMPANY.

Various Maryland laws may have the effect of discouraging offers to acquire us,
even if the acquisition would be advantageous to stockholders. Our bylaws
exempt us from some of those laws, such as the control share acquisition
provisions, but our Board of Directors can change our bylaws at any time to
make these provisions applicable to us.

WE HAVE THE RIGHT TO CHANGE SOME OF OUR POLICIES THAT MAY BE IMPORTANT TO
OUR STOCKHOLDERS WITHOUT STOCKHOLDER CONSENT.

Our major policies, including our policies with respect to investments,
leverage, financing, growth, debt and capitalization are determined by our
Board of Directors or those committees or officers to whom our Board of
Directors has delegated that authority. Our Board of Directors also establishes
the amount of any dividends or distributions that we pay to our stockholders.
Our Board of Directors may amend or revise the listed policies, our dividend or
distribution payment amounts and other policies from time to time without
stockholder vote. Accordingly, the stockholders may not have control over
changes in our policies.

OUR RIGHTS AND THE RIGHTS OF OUR STOCKHOLDERS TO TAKE ACTION AGAINST OUR
DIRECTORS AND OFFICERS ARE LIMITED.

Maryland law provides that a director or officer has no liability in that
capacity if he or she performs his or her duties in good faith, in a manner he
or she reasonably believe to be in our best interests and with the care that an
ordinary prudent person in a like position would use under similar
circumstances. In addition, our Charter eliminates our directors' and officers'
liability to us and our stockholders for money damages except for liability
resulting from actual receipt of an improper benefit in money, property or
services or active and deliberate dishonesty established by a final judgment
and which is material to the cause of action. Our bylaws require us to
indemnify directors and officers for liability resulting from actions taken by
them in those capacitates to the maximum extent permitted by Maryland law. As a
result, we and our stockholders may have more limited rights against our
directors and officers than might otherwise exist under common law. In
addition, we may be obligated to fund the defense costs incurred by our
directors and officers.

OUR SUCCESS DEPENDS ON KEY PERSONNEL WHOSE CONTINUED SERVICE IS NOT
GUARANTEED.

We are dependent upon the efforts of our key personnel, particularly Mr.
William Bayless, our President and Chief Executive Officer, and Mr. Brian
Nickel, our Executive Vice President and Chief Investment Officer. Mr. Bayless,
who was one of our co-founders, has directed the company's key business
segments since inception and possesses nearly 20 years of student housing
development and management experience. Messrs. Bayless and Nickel each has a
substantial industry reputation that attracts business and investment
opportunities and assists us in negotiations with lenders, universities and
industry personnel. Mr. Mark Hager, our Executive Vice President and Chief
Financial Officer, possesses detailed knowledge of and experience with our
financial and ancillary support operations that are critical to our operations
and financial reporting obligations as a public company. Mr. Greg Dowell, our
Chief of Operations, Mr. Ronnie Macejewski, our Senior Vice President --
Development and Construction, Mr. Jason Wills, our Senior Vice President --
Marketing and Business Development, and Mr. Brian Winger, our Senior Vice
President -- Development, have strong industry reputations and specialized
experience, which aid us in developing, acquiring and managing our properties.
The loss of the services of any of such personnel could materially and
adversely affect us.

THE MAJORITY OF OUR MANAGEMENT HAVE NO EXPERIENCE OPERATING A REIT OR A
PUBLIC COMPANY.

We have no operating history as a REIT or a public company. Our board of
directors and executive officers will have overall responsibility for our
management. While our executive and senior officers have extensive experience
in real estate marketing, development, management and finance, they do

not have prior experience in operating a business in accordance with the Code
requirements for maintaining qualification as a REIT, operating a public
company or complying with SEC regulations. Failure to maintain our REIT status
would have an adverse effect on our cash available for distribution to our
stockholders. Failure to properly comply with SEC regulations and requirements
could impair our ability to operate as a public company.

IN ADDITION TO THE UNDERWRITING DISCOUNTS AND ADVISORY FEES TO BE RECEIVED
BY DEUTSCHE BANK SECURITIES INC., AN AFFILIATE OF DEUTSCHE BANK SECURITIES
INC. MAY RECEIVE BENEFITS FROM THIS OFFERING.

In addition to the underwriting discounts and advisory fees to be received by
Deutsche Bank Securities Inc., its affiliate, BT Holdings (NY), Inc., is a
creditor of, and holds a security interest in certain assets of, RSVP's parent
company, FrontLine Capital Group. FrontLine filed for protection from creditors
pursuant to Chapter 11 of the Bankruptcy Code in June 2001. BT Holdings (NY),
Inc. would therefore potentially receive benefits from this Offering to the
extent Frontline received and paid to its unsecured creditors any portion of
the net proceeds of this Offering or otherwise used such proceeds to repay any
of its senior or secured indebtedness. To the extent proceeds are used to repay
senior or secured indebtedness, proceeds from future asset sales by FrontLine
may be available for distribution to BT Holdings (NY), Inc. and other unsecured
creditors. Deutsche Bank Securities Inc. may therefore have an interest in the
successful completion of this Offering beyond the underwriting discounts and
advisory fees that it will receive.

RISKS RELATED TO THIS OFFERING

WE MAY NOT BE ABLE TO MAINTAIN OUR INITIAL DISTRIBUTION RATE.

Our estimated initial annual distribution is expected to significantly exceed
our estimated cash available for distribution to our common stockholders for
the 12-month period ended March 31, 2005. Our ability to fund this distribution
will depend, in part, upon the receipt of cash flow from three properties that
are currently under construction and are scheduled to open in August 2004 and
from development fee income, the timing and amount of which are inherently
uncertain. In the event these properties do not open on schedule, we may incur
additional costs to provide alternative housing arrangements for students with
signed leases and such students may attempt to terminate their leases. To the
extent we use our working capital or borrowings under our revolving credit
facility to fund our distributions, our financial condition and our ability to
access these funds for other purposes, such as the expansion of our business,
could be adversely affected.

OUR DISTRIBUTIONS WILL NOT BE ELIGIBLE FOR THE NEW LOWER TAX RATE ON
DIVIDENDS EXCEPT IN LIMITED SITUATIONS.

Unlike dividends received from a corporation that is not a REIT, our
distributions to individual shareholders generally will not be eligible for the
new lower tax rate on dividends except in limited situations.

WE HAVE NOT OBTAINED RECENT APPRAISALS OF THE PROPERTIES IN CONNECTION
WITH THIS OFFERING.

We have not obtained recent appraisals of the properties in connection with
this Offering. The price paid to our existing owners for their interests in our
Predecessor Entities may exceed our properties' market value. The price paid
for these interests will increase or decrease depending upon whether the shares
in this Offering are sold above or below $20 per share (the midpoint in the
range referred to on the cover of this prospectus). Factors considered in
determining the offering price included our Predecessor Entities' historical
operations, management, estimated net income, estimated funds from operations,
estimated cash available for distribution, growth prospects, and the current
state of the commercial real estate industry and the economy as a whole.

OUR VALUE, REPRESENTED BY THE PUBLIC OFFERING PRICE OF OUR SHARES, MAY
EXCEED THE MARKET VALUE OF OUR PROPERTIES.

The initial public offering price of our common stock was determined in
consultation with the underwriters and may not necessarily bear any
relationship to our book value or the market value of

our properties. As a result, our value, represented by the public offering
price of our shares, may exceed the market value of our properties.

DIFFERENCES BETWEEN THE NET TANGIBLE BOOK VALUE OF OUR ASSETS AND THE
PUBLIC OFFERING PRICE OF OUR SHARES OF COMMON STOCK WILL RESULT IN AN
IMMEDIATE AND MATERIAL DILUTION.

The initial public offering price of our common stock was determined in
consultation with the underwriters and does not necessarily bear any
relationship to our book value or the market value of our assets. As a result,
our value, represented by the public offering price of our shares, may exceed
the market value of our assets. As of March 31, 2004, the aggregate historical
combined net tangible book value of the interests and assets to be transferred
to our Operating Partnership was approximately $24.3 million, or $2.02 per
share of our common stock on a fully-diluted basis. The pro forma net tangible
book value per share of our common stock after the consummation of this
Offering and the formation transactions will be less than the initial public
offering price. You will therefore experience immediate dilution of $8.39 per
share immediately after this Offering.

OUR FORMER OWNERS WILL RECEIVE SUBSTANTIAL ECONOMIC BENEFITS FROM THIS
OFFERING.

RAP will receive approximately $ million in cash from the net proceeds of
this Offering for the redemption of its interests in our Operating Partnership.
This amount will increase or decrease depending upon whether the shares in this
Offering are sold above or below $20 per share (the mid-point in the range
referred to on the cover of this prospectus). RAP will also receive other
economic benefits as a result of the formation transactions and this Offering.
RSVP will, through its significant ownership interest in RAP, including
interests in RAP received in the formation transactions, be entitled to
participate in a significant portion of these benefits realized by RAP. RAP and
RSVP played a significant role in structuring our formation. In the course of
structuring our formation, RAP and RSVP had the ability to influence the type
and level of benefits that they and our executive officers would receive from
us. They also had the ability to influence the other terms of the formation
transactions, including, without limitation, the representations and warranties
that they made to us in the formation transactions and the indemnities that
they provided for breaches of such representations and warranties. Our existing
investors will not own any continuing interest in us following this Offering.

In addition, RAP and RSVP will be entitled to any savings in the budgeted
completion cost of our three off-campus construction properties, including any
insurance proceeds that we receive with respect to the fire at University
Village at Fresno that are not applied to the construction costs of University
Village at TU.

We have not obtained recent appraisals of the properties in connection with
this Offering. Accordingly, the price paid to RAP for its interests in our
Predecessor Entities may exceed our properties' market value.

MARKET INTEREST RATES MAY HAVE AN EFFECT ON THE VALUE OF OUR COMMON STOCK.

One of the factors that will influence the price of our common stock will be
the dividend yield on our common stock (as a percentage of the price of our
common stock) relative to market interest rates. An increase in market interest
rates, which are currently at low levels relative to historical rates, may lead
prospective purchasers of our common stock to expect a higher dividend yield in
order to maintain their investment and higher interest rates would likely
increase our borrowing costs and potentially decrease funds available for
distribution. Thus, higher market interest rates could cause the market price
of our common stock to go down.

THE NUMBER OF SHARES AVAILABLE FOR FUTURE SALE COULD ADVERSELY AFFECT THE
MARKET PRICE OF OUR COMMON STOCK.

We cannot predict whether future issuances of shares of our common stock or the
availability of shares for resale in the open market will decrease the market
price per share of our common stock. Sales of substantial amounts of shares of
our common stock in the public market, or upon exchange of Units, or the
perception that such sales might occur could adversely affect the market price
of the shares of our common stock.

The exercise of the underwriters' over-allotment option, the exchange of Units
for common stock, the exercise of any options or the vesting of any restricted
stock granted to certain directors, executive officers and other employees
under our incentive award plan, the issuance of our common stock or Units in
connection with property, portfolio or business acquisitions and other
issuances of our common stock could have an adverse effect on the market price
of the shares of our common stock, and the existence of Units, options, shares
of our common stock exercisable upon conversion of, or exchange or exercise
for, other securities or reserved for issuance as restricted shares of our
common stock or upon exchange of Units may adversely affect the terms upon
which we may be able to obtain additional capital through the sale of equity
securities. In addition, future sales of shares of our common stock may be
dilutive to existing stockholders.

FORWARD LOOKING STATEMENTS

We make statements in this prospectus that are forward-looking statements. In
particular, statements pertaining to our capital resources, portfolio
performance and results of operations contain forward-looking statements.
Likewise, our pro forma financial statements and all of our statements
regarding anticipated growth in our funds from operations and anticipated
market conditions, demographics and results of operations are forward-looking
statements. Forward-looking statements involve numerous risks and uncertainties
and you should not rely on them as predictions of future events.
Forward-looking statements depend on assumptions, data or methods which may be
incorrect or imprecise and we may not be able to realize them. We do not
guarantee that the transactions and events described will happen as described
(or that they will happen at all). You can identify forward-looking statements
by the use of forward-looking terminology such as "believes," "expects," "may,"
"will," "should," "seeks," "approximately," "intends," "plans," "pro forma,"
"estimates" or "anticipates" or the negative of these words and phrases or
similar words or phrases. You can also identify forward-looking statements by
discussions of strategy, plans or intentions. The following factors, among
others, could cause actual results and future events to differ materially from
those set forth or contemplated in the forward-looking statements:

o changing university admission and housing policies;

o adverse economic or real estate developments;

o general economic conditions;

o future terrorist attacks in the U.S. or hostilities involving the U.S.;

o defaults on or non-renewal of leases by student-tenants;

o increased interest rates and operating costs;

o debt levels and property encumbrances;

o our failure to obtain necessary third party financing;

o decreased rental rates or increased vacancy rates resulting from
competition or otherwise;

o difficulties in identifying properties to acquire and completing
acquisitions;

o our failure to successfully operate acquired properties and operations;

o our failure to successfully develop properties in a timely manner;

o our failure to maintain our status as a REIT;

o environmental costs, uncertainties and risks, especially those related to
natural disasters;

o financial market fluctuations; and

o changes in real estate and zoning laws and increases in real property tax
rates.

For a further discussion of these and other factors that could impact our
future results, performance or transactions, see the section above entitled
"Risk Factors."

USE OF PROCEEDS

Assuming an offering price of $20 per share based upon the midpoint in the
range of prices on the cover of this prospectus, we estimate we will receive
gross proceeds from this Offering of $240.5 million and approximately $276.6
million if the underwriters' over-allotment is exercised in full. After
deducting the underwriting discount, financial advisory fees and commissions,
and estimated expenses of this Offering (excluding prepaid expenses), we expect
net proceeds from this Offering of approximately $219.7 million and
approximately $253.3 million if the underwriters' over-allotment is exercised
in full.

We will contribute the net proceeds from this Offering to our Operating
Partnership. In addition, prior to or simultaneously with the consummation of
this Offering, we will make an initial draw under our credit facility.

If the underwriters' over-allotment option is exercised in full, we expect to
use the additional net proceeds (which will be approximately $33.6 million) for
working capital and other general corporate purposes. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations --
Liquidity and Capital Resources."

Pending application of any portion of the net Offering proceeds, we will invest
it in interest-bearing accounts and short-term, interest-bearing securities as
is consistent with our intention to qualify for taxation as a REIT. Such
investments may include, for example, obligations of the Government National
Mortgage Association, other government and governmental agency securities,
certificates of deposit and interest-bearing bank deposits.

The following table provides information related to the expected offering
proceeds, revolving credit facility and uses of such proceeds. Amounts related
to repayment of indebtedness and completion of construction properties were
determined utilizing March 31, 2004 balances and will differ at the time of the
consummation of the Offering due to principal amortization, borrowings under
construction facilities and progress on our construction projects.

SOURCES (IN THOUSANDS) USES (IN THOUSANDS)
- --------------------------------- -----------------------------------

Gross Offering Proceeds ......... $ 240,514 Offering Expenses:
Initial drawdown under Underwriting Discount ............. $ 15,393
Credit Facility ................ 5,726 Structuring Fee ................... 1,443
Other Fees and Expenses ........... 4,000
---------
Subtotal .......................... 20,836
---------
Reduction of Indebtedness:
Repayment of Construction
Property Indebtedness ........... 30,358
Repayment of Construction
Accounts Payable ................ 8,909
Repayment of Other Property
Indebtedness .................... 46,075
Payment of Accrued Interest
Payable ......................... 552
Prepayment Penalties ............. 533
---------
Subtotal .......................... 86,427
---------
Payments to RAP and Titan:
Redemption of RAP's interests in
RAPSH (1) ....................... 97,501(2)
Purchase of Titan minority interest
in American Campus - Titan
Properties ...................... 5,726
---------
Subtotal .......................... 103,227
---------
Capital to complete Construction
Properties ....................... 35,000(3)
Financing Cost -- Senior Revolving
Line of Credit ................... 750
Working Capital (4) ............... --
---------
TOTAL SOURCES ................... $ 246,240 TOTAL USES ........................ $ 246,240
========= =========

- ----------------
(1) This amount will increase or decrease depending upon whether the shares in
this Offering are sold above or below $20 per share (the mid-point in the
range referred to on the cover of this prospectus).

(2) $ of this amount will be paid to our senior officers and former
employees who own interests in ACP.

(3) Any savings in this item will be distributed to RAP and RSVP.

(4) Working capital needs will be met by utilizing existing working capital and
funds available under the revolving credit facility.

DISTRIBUTION POLICY

We intend to pay regular quarterly distributions to holders of our common
stock. We intend to pay a pro rata initial distribution with respect to the
period commencing on the completion of this Offering and ending September 30,
2004, based on $0.35 per share for a full quarter. On an annualized basis, this
would be $1.40 per share, or an initial annual distribution rate of
approximately 7.0% based on the initial public offering price of $20 per share,
which is the mid-point of the range of prices indicated on the cover page of
this prospectus. This estimated initial annual distribution is expected to
significantly exceed our per-share estimated cash available for distribution to
our common stockholders for the 12-month period ended March 31, 2005. Our
ability to fund this distribution will depend, in part, upon the receipt of
cash flow from properties that are first scheduled to open in August 2004, from
continued successful leasing of our existing portfolio and from fee income from
third party services, primarily development services, the timing and amount of
which is inherently uncertain. To the extent these sources are insufficient, we
intend to use our working capital or borrowings under our new revolving credit
facility to fund these distributions.

Our estimate of cash available for distribution does not reflect:

o cash flow from unleased beds at our construction properties that are
scheduled to open in August 2004 for which we have received student
applications accompanied by refundable deposits but not executed leases
(see "Management's Discussion and Analysis -- Factors Expected to Affect
our Operating Results -- Properties under Construction");

o fee income from development services awards received from educational
institutions but with respect to which no formal contract has yet been
executed pending the receipt of project financing (see "Management's
Discussion and Analysis -- Factors Expected to Affect our Operating
Results -- Third Party Services", which includes a description of the
award process);

o cash to be used for capital expenditures, such as property acquisitions
and development activities, other than a reserve for recurring capital
expenditures at our owned properties;

o cash estimated to be used for financing activities, other than scheduled
amortization payments on mortgage indebtedness that will be outstanding
upon consummation of this Offering.

Although we have included all material investing and financing activities that
we have commitments to undertake as of May 31, 2004, during the twelve months
ending March 31, 2005 we may undertake other investing and/or financing
activities in the future. Any such investing and/or financing activities may
have a material effect on our estimate of cash available for distribution.
Because we have made the assumptions set forth above in estimating cash
available for distribution, we do not intend this estimate to be a projection
or forecast of our actual results of operations or our liquidity, and have
estimated cash available for distribution for the sole purpose of determining
our initial annual rate of distribution amount. Our estimate of cash available
for distribution should not be considered as an alternative to cash flow from
operating activities (computed in accordance with GAAP) or as an indicator of
our liquidity or our ability to pay dividends or make distributions. In
addition, the methodology upon which we made the adjustments described below is
not necessarily intended to be a basis for determining future distributions.

We intend to maintain our initial distribution rate for the twelve-month period
following completion of this Offering unless actual results of operations,
economic conditions or other factors differ materially from the assumptions
used in our estimate. Distributions made by us will be authorized and
determined by our board of directors out of funds legally available therefor
and will be dependent upon a number of factors, including restrictions under
applicable law or contained in our indebtedness or any future preferred stock.
We believe that our estimate of cash available for distribution constitutes a
reasonable basis for setting the initial distribution; however, no assurance
can be given that the estimate will prove accurate, and actual distributions
may therefore be significantly different from the expected distributions. We do
not intend to reduce the expected distribution per share if the underwriters'
over-allotment option is exercised; however, this could require us to pay
distributions from net Offering proceeds.

We anticipate that, at least initially, our distributions will exceed our then
current and then accumulated earnings and profits as determined for U.S.
federal income tax purposes due to non-cash expenses, primarily depreciation
and amortization charges that we expect to incur. Therefore, a portion of these
distributions will represent a return of capital for federal income tax
purposes. Distributions in excess of our current and accumulated earnings and
profits and not treated by us as a dividend will not be taxable to a taxable
U.S. stockholder under current federal income tax law to the extent those
distributions do not exceed the stockholder's adjusted tax basis in his or her
common stock, but rather will reduce the adjusted basis of the common stock.
Therefore, the gain (or loss) recognized on the sale of that common stock or
upon our liquidation will be increased (or decreased) accordingly. To the
extent those distributions exceed a taxable U.S. stockholder's adjusted tax
basis in his or her common stock, they generally will be treated as a capital
gain realized from the taxable disposition of those shares. We expect that
approximately % of our estimated initial distribution will represent a return
of capital for the tax period ended December 31, 2004. The percentage of our
stockholder distributions that exceeds our current and accumulated earnings and
profits may vary substantially from year to year. For a more complete
discussion of the tax treatment of distributions to holders of our common
stock, see "Federal Income Tax Considerations."

We cannot assure you that our estimated distributions will be made at all, or
at the rate estimated below, or if made, that such distributions will be
sustained. Any distributions we pay in the future will depend upon our actual
results of operations, economic conditions and other factors that could differ
materially from our current expectations. Our actual results of operations will
be affected by a number of factors, including the revenue we receive from our
properties (including properties currently under construction) and third party
services, our operating expenses, interest expense, the ability of our
student-tenants to meet their obligations and unanticipated expenditures. For
more information regarding risk factors that could materially adversely affect
our actual results of operations, please see "Risk Factors."

If our properties do not generate sufficient cash flow with which to pay our
estimated distributions, we will be required either to fund distributions from
working capital or borrowings under our revolving credit facility or to reduce
our distributions. Our revolving credit facility will contain covenants that
restrict our ability to pay distributions or other amounts to our stockholders
unless certain financial tests are satisfied and also will contain certain
provisions restricting or limiting our ability to draw funds under the
facility.

Federal income tax law requires that a REIT distribute annually at least 90% of
its REIT taxable income determined without regard to the dividends paid
deduction and excluding net capital gains, and that it pay tax at regular
corporate rates to the extent that it annually distributes less than 100% of
its net taxable income, including capital gains. For more information, please
see "Federal Income Tax Considerations." We anticipate that our estimated cash
available for distribution will exceed the annual distribution requirements
applicable to REITs. However, under some circumstances, we may be required to
pay distributions in excess of cash available for distribution in order to meet
these distribution requirements and we may need to borrow funds to pay some
distributions.

The following table describes our pro forma income for the year ended March 31,
2004, and the adjustments we have made thereto in order to estimate our initial
cash available for distribution for the year ending March 31, 2005 (amounts in
thousands except share data, per share data and percentages):

Pro Forma Net Income for the 12 Months Ended December 31, 2003 $ 664
Add: Pro Forma Net Income before minority interests for the three months ended
March 31, 2004 1,960
Less: Pro Forma Net Income before minority interests for the three months ended
March 31, 2003 (1,769)
----------
Pro Forma Net Income for the 12 Months Ended March 31, 2004 855
Add: Depreciation and Amortization for the 12 Months Ended March 31, 2004 9,651
Less: Net decrease in development revenue from existing contracts (5,363) (1)
Add: Increases in contractual development service revenues from new contracts 487 (2)

Add: Net increase in management services revenue from existing contracts 1,122 (3)
Add: Increases in management services revenue from new contracts 554 (4)
Add: Non-recurring compensation expense, net of contractual amounts payable
during 12 months ending March 31, 2005 579 (5)
Add: Increase in net income before depreciation from initial operations of three
developed properties scheduled to open in Fall 2004 3,592 (6)
Less: Decrease in net income before depreciation from a full year's operation of a
participating property phase that opened in September 2003 (83) (7)
Less: Decrease in net income before depreciation for the participating property
Coyote Village (84) (8)
-----
ESTIMATED CASH FLOWS FROM OPERATING ACTIVITIES FOR THE TWELVE MONTHS ENDING
MARCH 31, 2005 11,310

ESTIMATED CASH FLOWS USED IN INVESTING ACTIVITIES:
Less: Annual Provision for recurring capital expenditures -- Student Housing
Properties (1,008) (9)
Less: Annual Provision for recurring capital expenditures -- Participating
Properties (450)(10)
------
TOTAL ESTIMATED CASH FLOW USED IN INVESTING ACTIVITIES (1,458)

ESTIMATED CASH FLOWS USED IN FINANCING ACTIVITIES:
Less: Scheduled loan principal repayments -- Student Housing Properties (1,576)(11)
Less: Scheduled loan principal repayments -- Participating Properties (1,603)(12)
------
TOTAL ESTIMATED CASH FLOWS USED IN FINANCING ACTIVITIES: (3,179)
------
TOTAL ESTIMATED ANNUAL CASH AVAILABLE FOR DISTRIBUTION TWELVE MONTHS ENDING
MARCH 31, 2005 $ 6,673 (13)
=============
Our Share of Cash Available for Distribution 6,587 (14)
Minority interest's share of cash available for distribution 86 (15)

TOTAL ESTIMATED INITIAL ANNUAL DISTRIBUTION TO SHAREHOLDERS $ 16,835 (16)
Estimated annual distribution per share $ 1.40 (17)
Payout ratio based on estimated cash available for distribution 256%(18)

- ----------------

(1) Adjustment reflects the net decline in contractual development services
revenues to be earned and recognized in the twelve months ending March 31,
2005 compared to that which was earned and recognized in the twelve months
ended March 31, 2004.

The following table schedules the change in development services revenues for
the twelve months ending March 31, 2005 compared to the twelve months ended
March 31, 2004, for contracts in place during the twelve months ended
March 31, 2004.

(IN THOUSANDS)
-------------------
EXISTING CONTRACTS
-------------------

Vista Del Campo - University of California, Irvine ......... $ (2,789)
Williams Village - University of Colorado .................. (1,188)
Coyote Village - Weatherford College ....................... 430
Bayou Oaks - University of Houston ......................... (949)
Texan Hall - Angelo State University ....................... (646)
St. Leo University ......................................... (275)
Texas State University Phase 2 ............................. (76)
Sam Houston Hall - Sam Houston State ....................... 72
Lamar University Phase 4 ................................... 333
Purdue University - Calumet ................................ (75)
Indiana University - Purdue University, Fort Wayne ......... (200)
--------
Total ...................................................... $ (5,363)
========

(2) Increase in contractual development service revenues for the twelve months
ending March 31, 2005 due to projects commencing during that period. The
Company does not anticipate any additional overhead or other expenses as a
result of these new contracts.

(IN THOUSANDS)
---------------
NEW CONTRACTS
---------------

Purdue University ....................................... $350
Washington State University ............................. 137
----
Total ................................................... $487
====

(3) Adjustment reflects the net increase in contractual management fee
revenues for the twelve months ending March 31, 2005 compared to the same
period ended March 31, 2004 from contracts in place during the twelve
months ended March 31, 2004, resulting from full year's fees for contracts
commencing in fall 2003, and increases due to increased rental rates and
occupancies.

The following table schedules the change in management services revenues
for the 12-month period ending March 31, 2005, compared to the period ended
March 31, 2004 for contracts in place during the twelve months ended March
31, 2004.

(IN THOUSANDS)
-------------------
EXISTING CONTRACTS
-------------------

Cardinal Village I - Lamar University .................. $ 635
University Village - Savannah State .................... 22
Towson University ...................................... 2
Winston-Salem University Rams Commons .................. 3
Bear Creek Apartments - University of Colorado ......... 141
Bayou Oaks - University of Houston ..................... 50
Texan Hall - Angelo State University ................... 48
Purdue University - Calumet ............................ (25)
Campus Estates - Austin, Texas ......................... 246
------
Total .................................................. $1,122
======

(4) Adjustment represents increases in management services revenues from
contracts commencing during twelve months ending March 31, 2005. The
Company does not anticipate any additional overhead or other expenses as a
result of these new contracts.

(IN THOUSANDS)
---------------
NEW CONTRACTS
---------------

Coyote Village - Weatherford College ....................... $ 59
Vista Del Campo - University of California, Irvine ......... 310
Indiana University - Purdue University, Fort Wayne ......... 110
Viking Hall - Cleveland State University ................... 75
----
Total ...................................................... $554
====

(5) Non-recurring compensation expense related to the former severed chief
executive officer representing $1.0 million charged to expense in 2003,
offset by the amounts to be paid during the twelve months ending March 31,
2005.

(6) Represents expected net income before depreciation from leasing activities
related to three projects for the eight-month period from expected opening
in August 2004 thru March 2005, as follows:

AVERAGE AVERAGE MONTHLY
MONTHLY HISTORICAL PORTFOLIO NET INCOME BEFORE
PER OPERATING EXPENSE DEPRECIATION
TOTAL SIGNED BED RENTAL PER CONTRIBUTION
BEDS LEASES(A) RATE(A) OCCUPIED BED (B) (C)
------- ----------- ------------ ---------------------- ------------------

University Village at Fresno ......... 406 188 $501 $ 248 $ 380,512
University Village at San
Bernardino(d) ...................... 480 352 $664 $ 248 $1,191,424
University Village at TU(e) .......... 749 732 $612 $ 267 (f) $2,020,320
----------
Total ................................ $3,592,256

----------------

(a) Reflects beds leased as evidenced by signed leases as of May 28, 2004.
As of May 28, 2004, we have also received an additional 94 applications
with refundable deposits for these properties (30 for University
Village at Fresno, 62 for University Village at San Bernardino and two
at University Village at TU).

(b) Represents the highest monthly average operating cost per occupied bed
at our off-campus properties for the three year period ended December
31, 2003.

(c) Calculated as Average Monthly Per Bed Rental Rate less Average Monthly
Historic Portfolio Operating Expense Per Occupied Bed multiplied by 8
months (August 2004 thru March 2005) multiplied by the number of signed
leases.

(d) The California State University has an option to purchase the
University Village at San Bernardino for $28.3 million. We believe the
university will seek approval to exercise this option.

(e) Under the terms of the Bed Leasing Agreement with Temple University,
the University has committed to procure tenants for 400 beds at the
average rental rate of all leased beds. To the extent the University
does not procure such tenants by the day on which rent is first due,
the University must pay the applicable rent. See "Business and
Properties -- Our Properties -- University Village at TU, Philadelphia,
Pennsylvania."

(f) In addition to the operating cost described in (b) above, $19 is
included to reflect the amount of participating rent owed under the
terms of the ground lease with the University, expressed on a per bed
basis.

See "Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Factors Expected to Affect Our Operating Results -- Properties
under Construction" contained elsewhere in this prospectus for further
discussion.

(7) A 210 bed phase was opened at a participating property in September
2003. Accordingly the twelve months ended March 31, 2004 included seven
months operations of this phase. Adjustment reflects the impact on net
income before depreciation for its operations during the five months
from April 2004 through August 2004. These are the months during which
only summer school is in session.

(8) As contemplated in the structuring of our ground lease with Weatherford
College for the construction of Coyote Village, the facility lease was
transferred to the college in April of 2004. This adjustment reflects
the reduction in net income from this participating property for the
period September 2003 (opening) through March 31, 2004.

(9) Represents recurring capital expenditures for off-campus owned student
housing properties based on historic average recurring capital
expenditures calculated as follows:

2003 2002 2001
-------------- -------------- ------------

Recurring Capital Expenditures .......................... $ 1,154,384 $ 1,092,397 $ 688,910
Beds (At December 31) ................................... 6,070 6,070 5,338
Average Recurring Capital Expenditures Per Bed .......... $ 190 $ 180 $ 129

Average recurring capital expenditures for the three years ended December
31, 2003 approximated $166 per bed and excludes the three properties under
construction and University Village at Boulder Creek, a new property that
has not yet required recurring capital expenditures.

(10) Represents recurring capital expenditures for on-campus participating
properties based on historic average recurring capital expenditures
calculated as follows:

2003 2002 2001
------------ ------------ ------------

Recurring Capital Expenditures .......................... $ 418,326 $ 593,263 $ 290,639
Beds (at December 31) ................................... 4,167 3,957 3,957
Average Recurring Capital Expenditures Per Bed .......... $ 100 $ 150 $ 73

Average recurring capital expenditures for the three years ended
December 31, 2003 approximated $108.

(11) Represents required mortgage loan payments for owned off-campus student
housing properties after the repayment of certain loans with proceeds from
this Offering.

(12) Represents required payments under bond and loan agreements for our
on-campus participating properties, which are generally non-recourse
and/or subject to a break-even guarantee from the related university
system.

(13) Reflects estimated cash flows less cash flow used in financing and
investing activities.

(14) Reflects our 98.7% share of estimated cash flows.

(15) Represents the 1.3% minority interest held by Profit Interest Unit holders'
share of cash flows.

(16) Estimated initial distribution calculated by multiplying the assumed issued
shares of 12,025,700 by the assumed offering price of $20 by the assumed
distribution rate of 7.0%.

(17) Per share distribution calculated by multiplying the assumed per share
offering price of $20 by the assumed distribution rate of 7.0%.

(18) Payout ratio calculated by dividing the estimated initial annual
distribution to shareholders by the estimated annual cash available for
distribution.

CAPITALIZATION

The following table sets forth the historical combined capitalization of the
Predecessor Entities as of March 31, 2004 and our pro forma consolidated
capitalization as of March 31, 2004, adjusted to give effect to the formation
transactions, this Offering, the use of the net proceeds from this Offering,
borrowings under our revolving credit facility and cash released in connection
with this Offering as set forth in "Use of Proceeds." You should read this
table in conjunction with "Use of Proceeds," "Selected Financial Data,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources" and our consolidated financial
statements and the notes to our financial statements appearing elsewhere in
this prospectus.

(IN THOUSANDS)
----------------------------------------------
PRO FORMA AS
ADJUSTED FOR
IMPACT OF
FORMATION
HISTORICAL BORROWING AND
COMBINED AT OFFERING
MARCH 31, 2004 TRANSACTIONS
---------------- ------------------------

Mortgages and Other Secured Loans(1) ................... $287,285 $ 205,149 (1)
Minority Interests(1) .................................. 223 1,919 (2)
Owners' Equity ......................................... 28,311 --
Preferred Stock, $0.01 par value, 200,000,000 shares
authorized, none issued or outstanding ................ -- --
Common Stock, $0.01 par value, 800,000,000 shares
authorized, 12,025,700 shares issued and outstanding on
a pro forma basis ..................................... -- 120
Additional Paid in Capital and stockholders'/owner's
equity ................................................ -- 143,642
-------- ------------
Total Stockholders' Equity ............................. 28,311 143,762
-------- ------------
Total Capitalization ................................... $315,819 $ 350,830
======== ============

- ----------------

(1) Includes $8.3 million of construction debt related to the Weatherford
College facility lease which was assigned to the Lessor in April 2004.

(2) The historical minority interest of approximately $223,000 held by Titan was
acquired. The pro forma minority interest reflects the issuance of PIUs
representing a 1.3% minority interest.

DILUTION

Purchasers of our common stock offered in this prospectus will experience an
immediate and substantial dilution of net tangible book value of their common
stock from the initial public offering price. At March 31, 2004, we had a
tangible net book value of approximately $24.3 million or $2.02 per share of
our common stock assuming our predecessor owners interests were exchanged for
shares of our common stock on a one-for-one basis. After giving effect to the
sale of shares of our common stock offered hereby, the deduction of
underwriting discounts and commissions and other estimated offering and
formation transaction expenses, the receipt by us of the net proceeds of this
Offering and the use of these funds by our Operating Partnership as described
in our pro forma financial statements included elsewhere in this prospectus,
the pro forma net tangible book value at March 31, 2004 attributable to the
common stockholders would have been $139.7 million or $11.61 per share of
common stock. This amount represents an immediate dilution in pro forma net
tangible book value of $8.39 per share from the public offering price of $20
per share of our common stock, which is the mid-point of the range of prices
indicated on the front cover of this prospectus, to new public investors. The
following table illustrates this per share dilution (1):

Assumed Initial Offering Price Per Share ...................................... $ 20.00
Net tangible book value per share before the formation transactions,
acquisition of minority interests in the American Campus - Titan properties,
distribution of properties and cash to predecessor owners, and this offering
(2) ........................................................................... $ 2.02
Net tangible book value per share after the effect of the formation
transactions, acquisition of minority interests in the American Campus - Titan
properties, repayment of certain obligations, and distribution of properties to
predecessors owners, but before this offering (3) ............................. $ (0.34)
Increase in pro forma net tangible book value per share attributable to this
offering (4) .................................................................. 18.27
Decrease in pro forma net tangible book value per share attributable to the
distribution of cash to predecessor owners (5) ................................ (8.17)
Decrease in pro forma net tangible book value per share attributable to the
grant of a 1.3% minority interest in our Operating Partnership to certain
members of senior management in the form of Profit Interest Units (6) ......... (0.17)
Net increase in pro forma net tangible book value per share attributable to
the formation transactions, distribution, acquisitions, repayment of debt, and
this offering ................................................................. 9.59
Pro Forma net tangible book value per share ................................... 11.61
--------
Dilution in pro forma net tangible book value per share to new investors ...... $ 8.39
========

- ----------------
(1) The number of shares and units reflected in the calculations above assumes
that the initial public offering price of our common stock is at the
mid-point of the range of prices set forth on the cover page of this
prospectus. If we were to price below the range, we would either borrow
additional funds under our revolving credit facility or increase the
amount of shares in this Offering and decrease the amount of cash to be
given to contributors in exchange for the assets contributed by them in
the formation transactions. We may choose to not consummate this Offering
at prices below the bottom of the range. We do not currently anticipate
changing the number of shares if we price above the range of prices set
forth on the cover page of this prospectus.

(2) Net tangible book value per share is calculated as follows:

Net book value at March 31, 2004 ........................ $ 28,311,000
Less deferred finance costs (Intangible Asset) .......... (4,026,000)
------------
Net tangible book value ................................. $ 24,285,000
Number of shares to be issued in the Offering ........... 12,025,700
Net tangible book value per share ....................... $ 2.02

(3) The net tangible book value per share prior to the effect of the offering,
distribution of cash to predecessor owners, and grant of a minority
interest to certain members of our senior management was impacted by the
following transaction:

TRANSACTION IN THOUSAND PER SHARE
- ---------------------------------------------------------------------------------- ------------- ------------

Transfer of certain properties to predecessors owners .................... $ (2,194) $ (0.18)
Acquisition of minority interest held by Titan ........................... 223 0.01
Write off of unamortized deferred finance costs and expense prepayment
penalty in conjunction with the repayment of certain debt ............... (2,085) (0.17)
--------- ---------
Total decrease in tangible book value .................................... $ (4,056) $ (0.34)

(4) Increase in net tangible book value per share attributable to this offering
is computed as follows:

Assumed shares ......................................... 12,025,700
Assumed offering price ................................. $ 20.00
Assumed Gross Proceeds ................................. $ 240,514,000
Less "Offering Costs" .................................. $ (20,835,980)
Assumed net offering proceeds .......................... $ 219,678,020
Increase in net tangible book value per share .......... $ 18.27

(5) Expected distribution to predecessor owners approximately $98,251,000 or
$8.17 per share.

(6) Grant of profit interests in our Operating Partnership to certain members
of our senior management creating a 1.3% minority ownership in our
Operating Partnership.

SELECTED FINANCIAL DATA

o the development and management service operations and real estate
operations of American Campus Communities, LLC;

o the joint venture properties and operations of American Campus - Titan,
LLC and American Campus - Titan II, LLC.

The Predecessor Entities' unaudited historical combined balance sheet
information as of March 31, 2004 and combined statement of operations for the
three months ended March 31, 2004 and 2003 are derived from our unaudited
historical combined financial statements which we believe include all
adjustments (consisting of only normal recurring adjustments) necessary to
present fairly the information set forth therein. Our results of operations for
the interim period ended March 31, 2004 are not necessarily indicative of the
results to be obtained for the full fiscal year.

Our unaudited summary selected pro forma consolidated statements of operations,
for the three months ended March 31, 2004 and for the year ended December 31,
2003, assumes the completion of this Offering, the formation transactions and
the repayment of certain indebtedness as contemplated under "Use of Proceeds"
occurred as of the beginning of the periods indicated, and the summary selected
pro forma consolidated balance sheet is presented as if this Offering, the
formation transactions, and the repayment of certain indebtedness had been
consummated on March 31, 2004, and therefore reflects certain assumptions that
are described in Notes to Pro Forma Condensed Consolidated Financial Statements
beginning on page F-6. The pro forma information does not purport to represent
what our financial condition or results of operations actually would have been
had this Offering, the formation transactions and the repayment of certain
indebtedness, in fact, occurred on such date or at the beginning of the periods
indicated, or to project our financial condition or results of operations at
any future date or for any future period.

STATEMENT OF OPERATIONS DATA:

(IN THOUSANDS, EXCEPT FOR SHARES AND PER SHARE DATA)
YEAR ENDED
THREE MONTHS ENDED MARCH 31, DECEMBER 31,
-------------------------------------- ----------------
PRO FORMA PRO FORMA
2004 2004 2003 2003
---------------- ---------- ---------- ----------------
(UNAUDITED) (UNAUDITED)

Revenues:
Rental revenue .................. $ 13,603 $ 14,102 $ 13,786 $ 48,516
Third party services ............ 2,082 2,070 1,834 9,184
Other income .................... (5) -- 27 12
----------- -------- -------- -----------
Total revenues ................. 15,680 16,172 15,647 57,712
Operating expenses:
Facility operating expenses ..... 5,381 5,680 5,678 23,277
Third party development and
management services ............ 1,265 1,265 1,252 5,389
General and administrative ...... 849 474 405 4,278
Depreciation .................... 2,249 2,346 2,316 8,828
Ground lease expense ............ 175 175 129 584
----------- -------- -------- -----------
Total operating expenses 9,919 9,940 9,780 42,356
----------- -------- -------- -----------
Operating income ................ 5,761 6,232 5,867 15,356
Nonoperating income and
expenses:
Interest income ................ 13 14 25 71
Interest expense ............... (3,643) (4,575) (4,397) (14,171)
Amortization - deferred
finance costs ................. (163) (163) (136) (584)
Income tax ..................... (8) -- -- (8)
----------- -------- -------- -----------
Total nonoperating
expenses, net ................ (3,801) (4,724) (4,508) (14,692)
Minority interest in (income)
losses ......................... (25) 21 (12) (13)
----------- -------- -------- -----------
Net income (loss) ............... $ 1,935 $ 1,529 $ 1,347 $ 651
=========== ======== ======== ===========
Pro Forma basic earnings per
share (unaudited) (1) .......... $ 0.16 $ 0.05
Pro Forma diluted earnings
per share (unaudited) (2) ...... $ 0.16 $ 0.05
Pro Forma weighted average
common shares outstanding
- basic (unaudited) ............ 12,025,700 12,025,700
Pro Forma weighted average
common shares outstanding
- diluted (unaudited) .......... 12,181,010 12,181,010

(IN THOUSANDS, EXCEPT FOR SHARES AND PER SHARE DATA)
YEAR ENDED DECEMBER 31,
------------------------------------------------------------
HISTORICAL -- PREDECESSOR ENTITIES
------------------------------------------------------------
2003 2002 2001 2000 1999
----------- ----------- ----------- ----------- ------------

Revenues:
Rental revenue .................. $ 50,765 $ 48,984 $ 39,907 $ 22,587 $ 9,527
Third party services ............ 9,128 6,019 3,910 2,558 1,560
Other income .................... 28 355 88 -- 2
--------- --------- --------- -------- --------
Total revenues ................. 59,921 55,358 43,905 25,145 11,089
Operating expenses:
Facility operating expenses ..... 24,503 24,220 18,727 9,712 4,319
Third party development and
management services ............ 5,389 4,441 3,373 1,955 1,593
General and administrative ...... 2,778 2,001 1,659 1,492 675
Depreciation .................... 9,214 8,412 6,951 4,300 2,318
Ground lease expense ............ 584 664 631 11 50
--------- --------- --------- -------- --------
Total operating expenses 42,468 39,738 31,341 17,470 8,955
--------- --------- --------- -------- --------
Operating income ................ 17,453 15,620 12,564 7,675 2,134
Nonoperating income and
expenses:
Interest income ................ 85 167 350 304 12
Interest expense ............... (17,911) (17,392) (15,557) (9,404) (4,153)
Amortization - deferred
finance costs ................. (587) (564) (406) (467) (50)
Income tax ..................... -- -- -- -- --
--------- --------- --------- -------- --------
Total nonoperating
expenses, net ................ (18,413) (17,789) (15,613) (9,567) (4,191)
Minority interest in (income)
losses ......................... 16 30 110 20 --
--------- --------- --------- -------- --------
Net income (loss) ............... $ (944) $ (2,139) $ (2,939) $ (1,872) $ (2,057)
========= ========= ========= ======== ========
Pro Forma basic earnings per
share (unaudited) (1) ..........
Pro Forma diluted earnings
per share (unaudited) (2) ......
Pro Forma weighted average
common shares outstanding
- basic (unaudited) ............
Pro Forma weighted average
common shares outstanding
- diluted (unaudited) ..........

BALANCE SHEET DATA (AT PERIOD END):

(IN THOUSANDS)
AS OF MARCH 31, 2004 AS OF DECEMBER 31,
----------------------- ---------------------------------------------------------------
HISTORICAL - PREDECESSOR ENTITIES
PRO FORMA ---------------------------------------------------------------
COMPANY HISTORICAL 2003 2002 2001 2000 1999
---------- ------------ ----------- ------------ ------------ ------------ ------------
(UNAUDITED)

Student housing properties, net $301,790 $309,656 $292,620 $ 279,428 $ 265,989 $ 202,874 $ 119,036
Other assets, net ............. 70,386 37,327 37,946 28,230 29,648 14,275 13,099
-------- -------- -------- --------- --------- --------- ---------
Total assets .................. $372,176 $346,983 $330,566 $ 307,658 $ 295,637 $ 217,149 $ 132,135
======== ======== ======== ========= ========= ========= =========
Construction debt and accounts
payable ...................... $ -- $ 39,095 $ 23,645 $ 1,167 $ 18,925 $ 21,922 $ 1,123
Mortgage notes ................ 135,761 187,584 188,067 189,884 156,584 117,715 58,538
Bonds ......................... 61,010 61,010 61,010 57,865 58,940 38,640 39,270
Other liabilities ............. 29,724 30,760 29,934 22,932 20,485 13,242 10,997
-------- -------- -------- --------- --------- --------- ---------
Total liabilities ............. 226,495 318,449 302,656 271,848 254,934 191,519 109,928
Minority interests ............ 1,919 223 252 284 131 23 --
Owners' equity ................ 143,762 28,311 27,658 35,526 40,572 25,607 22,207
-------- -------- -------- --------- --------- --------- ---------
Total liabilities and owners'
equity ....................... $372,176 $346,983 $330,566 $ 307,658 $ 295,637 $ 217,149 $ 132,135
======== ======== ======== ========= ========= ========= =========

OTHER DATA:

(IN THOUSANDS)
YEAR ENDED
DECEMBER
THREE MONTHS ENDED MARCH 31, 31,
------------------------------- ----------
PRO FORMA HISTORICAL PRO FORMA
COMPANY ------------------- COMPANY
2004 2004 2003 2003
----------- --------- --------- ----------
(UNAUDITED)

FUNDS FROM OPERATIONS: (3)
Net income (loss) before
minority interest ................ $1,960 $1,508 $1,359 $ 662
Plus depreciation ................. 2,180 2,277 2,251 8,551
------ ------ ------ ------
Funds from operations (3) (4) ..... $4,140 $3,785 $3,610 $9,213
====== ====== ====== ======

(IN THOUSANDS)
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------
HISTORICAL - PREDECESSOR ENTITIES
--------------------------------------------------------------
2003 2002 2001 2000 1999
---------- ------------ ------------ ------------ ------------

FUNDS FROM OPERATIONS: (3)
Net income (loss) before
minority interest ................ $ (960) $ (2,169) $ (3,049) $ (1,892) $ (2,057)
Plus depreciation ................. 8,937 8,233 6,807 4,188 2,258
------ -------- -------- -------- --------
Funds from operations (3) (4) ..... $7,977 $ 6,064 $ 3,758 $ 2,296 $ 201
====== ======== ======== ======== ========

THREE MONTHS ENDED
MARCH 31,
--------------------------
HISTORICAL
--------------------------
2004 2003
------------- ------------
(UNAUDITED)
CASH FLOW INFORMATION:

Net cash provided by operations ....... $ 5,498 $ 3,474
Net cash (used in) investing .......... $ (19,213) $ (4,401)
Net cash provided by financing ........ $ 12,742 $ 3,513

AS OF DECEMBER 31,
---------------------------------------------------------------------
HISTORICAL - PREDECESSOR ENTITIES
---------------------------------------------------------------------
2003 2002 2001 2000 1999
------------- ------------- ------------- ------------- -------------
CASH FLOW INFORMATION:

Net cash provided by operations ....... $ 6,258 $ 7,959 $ 5,338 $ 3,577 $ 1,512
Net cash (used in) investing .......... $ (33,737) $ (21,678) $ (68,540) $ (87,652) $ (44,087)
Net cash provided by financing ........ $ 22,141 $ 11,335 $ 72,832 $ 84,215 $ 43,997

SELECTED PROPERTY INFORMATION (5):

Units ............. 3,643 3,459 3,567 3,459 3,377 2,781 1,461
Beds .............. 10,826 10,336 10,546 10,336 10,027 8,232 4,668
Occupancy ......... 91.0% 92.4% 91.5% 91.0% 93.5% 93.3% N/A

- ----------------

(1) Pro Forma basic earnings per share is computed assuming this Offering was
consummated as of the first day of the period presented and equals pro
forma net income divided by the number of shares of our common stock to be
outstanding after this Offering.

(2) Pro Forma diluted earnings per share is computed assuming this Offering was
consummated as of the first day of the period presented. Pro Forma diluted
earnings per share equals pro forma net income divided by the sum of the
number of shares of our common stock to be outstanding and common
equivalent shares outstanding after this Offering.

(3) As defined by 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.

(5) Includes the Village at Riverside and Coyote Village, but does not include
three properties currently under construction.

MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with our financial
statements, related notes and other financial information appearing elsewhere
in this prospectus. Where appropriate, the following discussion includes an
analysis of the effects of the formation transactions and this Offering. These
effects are reflected in the pro forma combined financial statements located
elsewhere in this prospectus. This discussion also analyzes the effects of
certain matters that may occur following the completion of this Offering.

OVERVIEW

We are a fully integrated, self-administered, and self-managed equity REIT
engaged in the development, acquisition, ownership, and operation of high
quality student housing properties. We also provide student housing development
and management services to universities, charitable foundations and others. We
are one of the largest private owners, developers and managers of high-quality
student housing properties in the United States in terms of total beds owned,
developed and under management.

We were formed in connection with this Offering to continue the student housing
business of our Predecessor Entities that commenced in 1993. As part of the
transactions relating to our formation, RAPSH will redeem all of the interests
of RAP in RAPSH for $ million in cash and thereby assume ownership of
substantially all of the properties and operations of our Predecessor Entities.

One property previously owned by these Predecessor Entities (The Village at
Riverside) will be distributed to an entity owned by RAP and RSVP and will
therefore not become a part of our portfolio. We will be granted a four-year
option to purchase this property and will continue to manage it following this
Offering. We did not acquire this property as part of our formation
transactions because the considerable oversupply of multi-family properties in
its submarket have negatively impacted its operating results and prospects, and
we therefore believe that our ownership of this property at this time would be
inconsistent with our growth strategy.

We will also acquire the minority interests held by Titan in the American
Campus - Titan Properties for approximately $5.7 million in cash to be drawn
from our revolving credit facility, and we will restructure the terms of our
joint venture with Titan with respect to our future joint development
activities. We do not intend to acquire any other third party property
interests prior to or in conjunction with this Offering.

We will use approximately $86.4 million of the proceeds of this Offering to
repay $76.5 million in property-related indebtedness and related expenses
which, as of March 31, 2004, had a weighted average interest rate of
approximately 6.5%.

We will elect to be taxed as a REIT for federal income tax purposes commencing
with our tax year ending December 31, 2004.

We will account for the formation transactions as a reorganization of entities
under common control in a manner similar to a pooling of interests. We will
account for our cash purchase of additional interests in the American Campus -
Titan Properties using the purchase method of accounting.

Our historical financial data represents the combined historical financial data
for our Predecessor Entities and therefore includes The Village at Riverside
and reflects Titan's minority ownership interest in the American Campus - Titan
Properties as well as our pre-Offering levels of indebtedness. The information
contained in this Management's Discussion and Analysis section reflects our
historical information, as adjusted for the formation transactions and this
Offering.

IMPACT OF CONSTRUCTION PROPERTIES

Our revenues are derived primarily from the ownership and operation of our
off-campus student housing properties. These revenues have grown from
approximately $26.2 million in 2001 to $32.3 million in 2002 and $33.8 million
in 2003. We currently have three off-campus properties under

construction that are scheduled to open in Fall of 2004 and therefore have not
been reflected in our historical or pro-forma operating results. When
completed, these construction properties will increase the number of our units
by 26.4% from 1,728 to 2,185 and increase the number of our beds by 27.4% from
5,971 to 7,606. We therefore expect that these construction properties will
have a material effect on our future results of operations. See "-- Factors
Expected to Affect our Operating Results" below, which provides information
that is intended to assist prospective investors in considering the possible
effect that the completion and leasing of these properties may have on our
results of operations in 2004 and thereafter.

STRUCTURE OF ON-CAMPUS PARTICIPATING PROPERTIES

We operate four on-campus student housing properties under participating ground
leases with the related university systems. These properties comprise 35.4% of
our owned beds. The following table reflects the contribution to our
consolidated income and expense of our owned on-campus student housing
properties in each of 2003, 2002 and 2001 and for the three months ended March
31, 2004. These results include the contribution of certain on-campus
properties that were developed by us and by pre-arrangement transferred to the
university after the necessary financing had been secured:

THREE MONTHS
ENDED
MARCH 31, IN THOUSANDS
--------------------- ---------------------------------------
YEAR ENDED DECEMBER 31,
---------------------------------------
2004 2003 2003(2) 2002(3) 2001(4)
--------- --------- ----------- ----------- -----------

Revenues .............................. $5,614 $5,522 $ 17,032 $ 16,737 $ 13,669
Direct Operating Expenses (1) ......... 1,785 1,734 7,517 7,273 5,560
Depreciation .......................... 854 798 3,270 3,158 2,683
Amortization .......................... 66 38 181 154 133
Ground Lease Expense .................. 175 15 584 664 632
------ ------ -------- -------- --------
NET OPERATING INCOME .................. 2,734 2,937 5,480 5,488 4,661
Interest Expense ...................... 1,449 1,367 5,293 5,291 4,853
------ ------ -------- -------- --------
NET INCOME (LOSS) ..................... $1,285 $1,570 $ 187 $ 197 $ (192)
====== ====== ======== ======== ========

- ----------------

(1) Excludes property management fees of approximately $800,000 in each of
2001, 2002 and 2003 and $272,000 in the three months ended March 31, 2004
that were paid to us. This expense and the corresponding fee revenue
recognized by us have been eliminated in consolidation. Also excludes
allocation of expense related to corporate management and oversight.

(2) Includes results of Coyote Village that opened in August 2003 and was
transferred to Weatherford College on April 1, 2004.

(3) Includes results of Cardinal Village II that opened in August 2002 and was
transferred to Lamar University in December of that year.

(4) Includes results of Cardinal Village I that opened in August 2001 and was
transferred to Lamar University in December of that year.

Under our participating ground leases, we receive an annual distribution
representing 50% of these properties' net cash available for distribution after
payment of operating expenses (which includes our management fees), debt
service (which includes repayment of principal) and capital expenditures. In
2003, 2002 and 2001, our share of these net cash distributions was
approximately $0.6 million, $0.7 million and $0.6 million, respectively. We
also manage these properties under multi-year management agreements and
received management fees of approximately $0.8 million in each of those years,
and $0.3 million in the three months ended March 31, 2004.

We do not have access to the cash flows and working capital of these
participating properties except for the annual net cash distribution as
described above. Additionally, a substantial portion of these properties' cash
flow is dedicated to capital reserves required under the applicable property
indebtedness and to the amortization of such indebtedness. These amounts do not
increase our economic interest in these properties since our interest,
including our right to share in the net cash available for distribution from
the properties, terminates upon the amortization of their indebtedness.

Our economic interest in these properties is therefore limited to our interest
in the net cash flow and management fees from these properties. Accordingly,
when considering these properties' contribution to our operations, we believe
that prospective investors should focus upon our share of these properties' net
cash available for distribution and the management fees that we receive from
these properties rather than upon their contribution to our gross revenues and
expenses for financial reporting purposes.

Three of our on-campus participating properties are encumbered by $61.0 million
of taxable insured bond financing that are without recourse to us. The fourth
property (Cullen Oaks) is currently encumbered by $17.2 million of construction
indebtedness. The university is obligated to us to lease beds at this property
for an amount sufficient to pay all property expenditures, including debt
service. In turn, we have guaranteed payment of this property's indebtedness.
This construction financing matures in 2008, and we anticipate that we will
refinance it on or before its maturity with non-recourse bond or other
long-term financing, although there can be no assurance that we will be able to
do so on favorable terms or at all.

FACTORS EXPECTED TO AFFECT OUR OPERATING RESULTS

UNIQUE LEASING CHARACTERISTICS

Student housing properties are typically leased by the bed on an individual
lease liability basis, unlike multi-family housing where leasing is by the
unit. Individual lease liability limits each resident's liability for his or
her own rent without liability for a roommate's rent. A parent or guardian is
required to execute each lease as a guarantor unless the resident provides
adequate proof of income. The number of lease contracts that we administer are
therefore equivalent to the number of beds occupied not the number of units.

Due to our predominantly private bedroom accommodations, the high level of
student oriented amenities offered at our properties and the individual lease
liability for our residents and their parents, we believe that we typically
command higher per-unit and per-square foot rental rates than most multi-family
properties in the same markets. We are also typically able to command higher
rental rates than on-campus student housing, which tend to offer properties
with fewer amenities as a lower cost alternative.

Unlike traditional multi-family housing, most of our leases commence and
terminate on the same dates. In the case of our typical 12-month leases, these
dates coincide with the commencement of the universities' fall academic term
and typically terminate at the completion of the last subsequent summer school
session. As such, we must re-lease each property in its entirety each year,
resulting in significant turnover in our tenant population from year to year.
In 2003, approximately 71.3% of our beds were leased to students who were
first-time residents at our properties. As a result, we are highly dependent
upon the effectiveness of our marketing and leasing efforts during the annual
leasing season that typically begins in January and ends in August of each
year. Our properties' occupancy rates are therefore typically stable during the
August to July academic year but are susceptible to fluctuation at the
commencement of each new academic year, which may be greater than the
fluctuation in occupancy rates upon expiration of traditional multi-family
leases. See "-- Recent Trends and Events -- Leasing Activity" below for a
comparison of our leasing activity to date for the 2004-5 academic year and our
leasing activity for the 2003-4 academic year.

We maintain students with outstanding balances in our receivable subsidiary
system for a number of years to ensure we are able to collect should the
student attempt to return to school or request a transcript to attend a
different school, as it is not uncommon for students to leave school but return
for a later semester or academic year, or attempt to be admitted to another
institution in a later semester or academic year. While this methodology
results in seemingly high gross receivable balance and allowance for doubtful
account balance, because we review and adjust our allowance for doubtful
accounts on a monthly basis and recognize the appropriate charge to expense for
amounts determined

to be doubtful as to collectibility, our methodology of maintaining accounts
for a longer period of time does not impact the appropriate expense recognition
in our operations. Over time, the increase in the allowance will level off as
accounts will be charged off.

PROPERTIES UNDER CONSTRUCTION

Three of our properties are currently under construction: University Village at
Fresno (Fresno, CA), University Village at San Bernardino (San Bernardino, CA),
and University Village at TU (Philadelphia, PA). Our results of operations and
ability to make our contemplated distribution payments to shareholders will, to
a significant extent, be dependent upon the results of operations from these
properties. These results cannot be predicted with certainty. The amount of
revenues to be realized from these properties in 2004 will be contingent upon a
number of factors, including the completion of their construction on budget and
in time for commencement of the 2004-2005 academic year in Fall 2004 and their
successful lease-up at the anticipated monthly rental per bed. See "Risk
Factors -- Three of our properties are under construction and we may encounter
delays in completion or experience cost overruns." The information provided in
this section is intended to assist prospective investors in considering the
possible effect that the completion and leasing of these properties may have on
our results of operations in 2004 and thereafter.

The following table sets forth certain information about our construction
properties as of May 28, 2004, which information should be considered when
considering the rental revenues that may be generated at these properties for
the 2004-5 academic year that commences in Fall 2004:

AVERAGE
MONTHLY LEASED BEDS UNDER ON-CAMPUS
PROPERTY BEDS RENT (1) BEDS (2) APPLICATION (3) CAPACITY (4)
- -------------------------------------------------- -------- ---------- ------------ ----------------- -------------

University Village at Fresno (5) ................. 406 $ 501 188 30 4.9 %
University Village at San Bernardino (6) ......... 780 664 352 62 6.2 %
University Village at TU ......................... 749 701 732(7) 7 13.7%
--- ------ ----- --
TOTAL ............................................ 1,935 $1,866 1,272 99
===== ====== ===== ==

- ----------------

(1) Weighted average monthly rent for Leased Beds for 2004-5 academic year,
commencing Fall 2004. See the individual description for each of these
properties under "Business and Properties."

(2) Beds leased for 2004-5 academic year.

(3) Beds (other than Leased Beds) for which we have received applications with
refundable deposits for the 2004-5 academic year.

(4) Percentage of total 2003 enrollment at the particular university that can
be housed on-campus. See "Industry Outlook -- Limited Housing Supply" for
a discussion of each property's competition from on-campus and off-campus
properties.

(5) We are party to a 2-year agreement with the University pursuant to which we
will be the exclusive approved off-campus student housing property
recommended by the University to prospective students and parents.

(6) We are party to an affiliation agreement with the University pursuant to
which it will actively assist in our direct marketing efforts for this
property.

(7) Of our 749 beds, Temple University has agreed to master lease up to 400
beds that they intend to make available to their students as part of their
annual "Housing Lottery." Students who are eligible to lease these Lottery
Beds will execute a lease directly with us. To the extent that all 400
Lottery Beds are not leased by eligible students prior to the commencement
of the 2004 -- 2005 lease period, Temple University will lease and pay
rent on the remaining unleased beds. The total includes these 400 lottery
beds.

Occupancy at these properties during the 2004-5 academic year, beyond the
number of leased beds indicated above, cannot be predicted with certainty at
this time. However, we believe that the information regarding on-campus
capacity is important when considering the extent of competition that these
construction properties will initially face from on-campus student housing. For
a further discussion of the competitive market for each of these properties,
see the specific property description under "Business and Properties."

Based on our historical experience at our other off-campus properties, we
believe that student applications accompanied by refundable deposits have been
an effective indicator of ultimate leasing at these properties. During the
2003-4 academic year leasing period for our owned off-campus properties, we
received 5,788 applications, 5,400 of which were converted to leases,
representing a conversion rate of 93.3%. See also "Recent Trends and Events --
Leasing Activity" below for a comparison of our leasing activity to date for
the 2004-5 academic year and our leasing activity for the 2003-4 academic year.

The following table provides certain information with respect to our historical
operating costs at the off-campus properties that we have owned and operated
since 2001, which should be taken into account when considering the operating
costs that we may incur at our construction properties. The historical
operating costs at these off-campus properties may not be indicative of the
operating costs that we will experience at our properties currently under
construction:

2003 2002 2001(6)
----------------- ----------------- -----------------

Student Housing Operating Expense ...................... $ 16,472,000 $ 15,971,000 $ 12,258,000
Total Beds ............................................. 6,379 6,070 6,070
Occupancy Rate (1) ..................................... 88.6% 87.3% 92.1%
Occupied Beds (2) ...................................... 5,650 5,299 4,915
Student Housing Operating Expense per Bed (3) .......... $ 2,582 $ 2,631 $ 2,296
Student Housing Operating Expense per
Occupied Bed (4) ...................................... $ 2,915 $ 3,014 $ 2,494
Student Housing Net Operating Income (5) ............... $ 17,291,000 $ 16,344,000 $ 13,977,000

- ----------------
(1) Calculated as of December 31 of the respective year.

(2) The product of the Number of Beds and the Occupancy Rate.

(3) Student Housing Operating Expense divided by Number of Beds.

(4) Student Housing Operating Expense divided by the Number of Occupied Beds.

(5) The difference between Student Housing Rental and Ancillary Revenue less
Student Housing Operating Expenses.

(6) Includes a partial year for the Callaway House (acquired March 2001) and
University at Science Drive (acquired November 2001).

The California State University has an option to purchase the University
Village at San Bernardino for $28.3 million, which option expires 150 days
after we have given notice of completion of construction to the University. We
believe the university will seek approval to exercise this option. We expect to
give this notice during the month of August 2004.

THIRD PARTY SERVICES

Development Services. Our revenues from third party development services have
grown from approximately $2.9 million in 2001 to $5.1 million in 2002 and $7.9
million in 2003. The amount and timing of future revenues from development
services will typically be contingent upon our ability to successfully compete
in public universities' competitive procurement processes, our ability to
successfully structure and finance these projects, and our ability to complete
construction within the agreed construction timelines and budgets. To date, all
of our third party development projects have completed construction in time for
their targeted Fall occupancy. However, delays in the completion of the
construction of our third party development projects would delay our receipt of
anticipated revenues and subject us to significant liabilities under our
completion guarantees as well as other unbudgeted costs.

As of March 31, 2004, development fees totaling approximately $3.0 million
remained to be earned by us with respect to third party properties that began
construction in 2003 and are scheduled to open in Fall 2004. The following
table provides certain information with respect to third party properties under
construction as of March 31, 2004:

CONTRACTED PROJECTS

IN THOUSANDS
------------------------------------------------------
TOTAL FEES PREVIOUSLY BALANCE TO BE
CONTRACTUAL FEE EARNED AND EARNED AND
PROPERTY AMOUNT RECOGNIZED RECOGNIZED
- --------------------------------------------------- ----------------- ----------------- --------------

Bear Creek at Williams Village Phase I(b) ......... $ 2,420 $ 2,663(1) $ 22
Cardinal Village (Phase III) ...................... 862 253 609
IPFW Student Housing .............................. 250 225 25
Purdue University - Calumet ....................... 250 150 100
Purdue University ................................. 350 -- 350
Coyote Village .................................... 430 -- 430
Sam Houston Village ............................... 768 254 514
San Marcos Hall Phase II .......................... 1,128 601 527
Vista Del Campo Apartments Phase I ................ 3,974 3,521 453
-------- --------- -------
TOTAL ............................................. $ 10,432 $ 7,667 $ 3,030
======== ========= =======

- ----------------
(1) Reflects recognition of $265,000 of incentive fee based on construction
savings.

We generally receive a significant percentage of our fees for development
services upon closing of the project financing, a portion of the fee over the
construction period, and the balance upon substantial completion of
construction. Because revenue from these services is recognized for financial
reporting purposes utilizing the percentage of completion method, differences
occur between amounts received and revenues recognized. Differences also occur
between amounts recognized for tax purposes and those recognized for financial
reporting purposes. Since, as a REIT, we will be required to distribute 90% of
our taxable income, our distribution requirement with respect to our income
from third party services may exceed that reflected as net income for financial
reporting purposes from such activities.

The following table provides certain information as of March 31, 2004 with
respect to our awarded development services projects:

AWARDED PROJECTS

PROPOSED
FEE AMOUNT (2) ANTICIPATED
AWARDED PROJECT (1) (IN THOUSANDS) COMMENCEMENT DATE
- --------------------------------------------- ---------------- ------------------

Cleveland State University .................. $ 1,511 January 2005
Saint Leo University Phase II ............... 375 September 2004
Vista Del Campo Apartments Phase II ......... 3,503 December 2004
West Virginia University .................... 750 Spring 2005
-------
Total ....................................... $ 6,139
=======

- ----------------
(1) Projects for which we have received notice from the university that it will
negotiate exclusively with us.

(2) Fee amount included in our proposal to the university.

When responding to formal competitive requests for proposal (RFPs) from
educational institutions that relate to specific student housing projects, we
submit a "Proposal" to the institution which reflects our response to the
principal requirements of the proposed transaction. Our Proposal typically
addresses matters such as preliminary construction plans, construction budget
(including our proposed fee), operating cash flows, and project schedule.
Following a formal selection process by the educational institution, a
developer's proposal is selected, and the developer is notified of the
institution's intent to begin exclusive negotiations related to the project. We
refer to this stated intention to exclusively negotiate as an "Award," and we
refer to the services performed with respect to the project from the grant of
the Award until the formal execution of development services agreement as
"Pre-development"

services. During the Pre-development services period, the development budget,
construction plans and cost, financing structure, development schedule,
operating cash flows, and terms of the development contract are finalized.
Generally all contracts, including the general contractor's agreement,
construction professional agreements and our development services agreement,
are executed concurrently with the closing of financing for the project.

The recognition and timing of revenues from our awarded development services
projects will, among other things, be contingent upon successfully structuring
and closing project financing as well as the timing of construction.
Historically, the development projects that we have been awarded have been
successfully structured and financed, however they have at times been delayed
beyond the originally scheduled construction commencement date. If such delays
were to occur with our current awarded projects, our recognition of expected
revenues and receipt of expected fees from these projects would be delayed.
There can be no assurance that our current awards will be successfully
structured and financed in a timely manner or that projects will be completed
as and when expected.

Management Services. Our revenues from third party property management services
were approximately $1.0 million in each of 2001 and 2002 and approximately $1.2
million in 2003 and $0.4 million for the three months ended March 31, 2004. Due
to the continued growth in our development services revenues, these management
services have, in recent years, represented a declining percentage of our
revenues from third party services (13.0%, 15.7% and 26.4% of such revenues in
2003, 2002 and 2001, and 17.9% for the three months ended March 31, 2004,
respectively). Our revenues from management services are typically derived from
multi-year management agreements. Approximately $0.4 million of additional
management fees is due in 2004 under management agreements that commenced in
2003.

CRITICAL ACCOUNTING POLICIES

Our historic combined financial statements include the accounts of all
majority-owned investments and the consolidated subsidiaries of the Predecessor
Entities. The preparation of financial statements in conformity with accounting
principles generally accepted in the United States ("GAAP") requires management
to make estimates and assumptions in certain circumstances that affect amounts
reported in our combined financial statements and related notes. In preparing
these financial statements, management has utilized all available information,
including its past history, industry standards and the current economic
environment, among other factors, in forming its estimates and judgments of
certain amounts included in the combined financial statements, giving due
consideration to materiality. It is possible that the ultimate outcome
anticipated by management in formulating its estimates may not be realized.
Application of the critical accounting policies below involves the exercise of
judgment and use of assumptions as to future uncertainties and, as a result,
actual results could differ from these estimates. In addition, other companies
in similar businesses may utilize different estimation policies and
methodologies, which may impact the comparability of our results of operations
and financial condition to those companies.

REVENUE AND COST RECOGNITION OF THIRD PARTY DEVELOPMENT AND MANAGEMENT
SERVICES

Costs associated with the pursuit of third party development and management
service contracts are expensed as incurred until such time as we have been
notified of a contract award or otherwise believe that it is probable a
contract will be awarded. At such time, the reimbursable portion of such costs
are recorded as receivables with the remaining portion deferred and expensed in
relation to the revenues earned on such contracts. Development revenues are
recognized and related costs (including the costs of our development personnel
involved in the project) deferred and expensed using the percentage of
completion method as determined by construction costs incurred relative to the
total estimated construction costs. Fees received in excess of those recognized
are reflected as deferred development and construction revenue. Revenues
recognized in excess of amounts received are included in other current assets.
Incentive fees are recognized when the project is complete and the incentive
amount has been confirmed by an independent third party.

Third party management fees are generally received and recognized on a monthly
basis and are computed as a percentage of property receipts, revenues or a
fixed monthly amount, in accordance with the applicable management contract.
Incentive management fees are recognized when the contractual criteria have
been met.

STUDENT HOUSING RENTAL REVENUE RECOGNITION AND ACCOUNTS RECEIVABLE

Student housing rental revenue is recognized on a straight-line basis over the
term of the contract. Ancillary and other property related income is recognized
in the period earned.

In estimating the collectibility of our accounts receivables, we analyze
specific resident receivables, historical bad debts, and current economic
trends. These estimates have a direct impact on our net income, as an increase
in allowance for doubtful accounts reduces our net income.

LONG LIVED ASSETS - IMPAIRMENT

On a periodic basis, management is required to assess whether there are any
indicators that the value of the real estate properties may be impaired. A
property's value is considered impaired if management's estimate of the
aggregate future cash flows (undiscounted and without interest charges) to be
generated by the property is less than the carrying value of the property.
These estimates of cash flows consider factors such as expected future
operating income, trends and prospects, as well as the effects of demand,
competition and other factors. To the extent impairment has occurred, the loss
will be measured as the excess of the carrying amount of the property over the
fair value of the property, thereby reducing our net income.

LONG LIVED ASSETS - HELD FOR SALE

Long-lived assets to be sold are classified as held for sale in the period in
which all of the following criteria are met:

o Our management (having the authority to approve the action) commits to a
plan to sell the asset.

o 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.

o An active program to locate a buyer and other actions required to
complete the plan to sell the asset have been initiated.

o 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.

o The asset is being actively marketed for sale at a price that is
reasonable in relation to its current fair value.

o 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

When material, the results of operations of a property that either has been
disposed of or is classified as held for sale is reported in discontinued
operations if both of the following conditions are met: (a) the operations and
cash flow of the component have been (or will be) eliminated from the ongoing
operations of the Company as a result of the disposal transaction and (b) the
Company will not have any significant continuing involvement in the operations
of the component after the disposal transaction.

RECENT TRENDS AND EVENTS

INDUSTRY OUTLOOK

We believe that our operations have benefited because of a number of factors
impacting the student housing market in the United States. According to a
report that we have commissioned from Rosen Consulting Group, LLC, a real
estate economic consulting firm, these factors include:

o a surge in college enrollment in the United States, fueling a demand for
student housing;

o budget shortfalls at universities have reduced the availability of
capital resources for new housing to accommodate the projected surge in
enrollment;

o the existing traditional dormitory-style facilities are becoming obsolete
and are in the need of renovation or replacement;

o universities are turning to the private sector developers to bridge the
gap between the demand for on and off-campus student housing and their
ability to provide it from their own capital resources; and

o a highly fragmented ownership of student housing properties in which the
total size of the private sector pales in comparison to the size of the
national demand in the market with no private student housing
owner-operator managing more than 25,000 beds.

We believe that these factors will continue to have a significant impact on the
United States student housing market for the foreseeable future. As a result of
these factors, institutions of higher learning have increasingly turned to the
private sector to provide modern student housing through off-campus development
or through public-private partnerships, such as our on-campus participating
properties. Additionally, privately developed modern student housing projects
have become a popular alternative to traditional dorms and apartments.

FORMATION TRANSACTIONS

This Offering and our formation transactions will affect our business and
results of operations in a number of ways:

o We will cease to be affiliated with RAP and RSVP and will therefore be
required to seek to fund our operations and growth strategy by accessing
new sources of investment capital.

o As a publicly traded REIT, we will, following this Offering, potentially
have greater access to the public capital markets and other sources of
investment capital. Our status as a publicly traded REIT will also enable
us to use our shares or the units of our Operating Partnership as
currency with which to acquire properties. Moreover, we believe that our
prominence as the sole publicly traded REIT focused exclusively on
student housing in the United States will afford us a competitive
advantage in acquiring additional student housing properties.

o Our total consolidated indebtedness will be reduced from $280.9 million
(year end 2003 historical) to $196.8 million (March 31, 2004 pro forma),
resulting in a reduction of our pro forma interest expense by $3.7
million and $0.9 million for 2003 and the three months ended March 31,
2004, respectively.

o We will have available to us a $ million revolving credit facility with
which to fund future property acquisitions and our working capital needs.

o In order to qualify as a REIT, a specified percentage of our gross income
must be derived from real property sources, which would generally exclude
our income from providing development and management services to third
parties as well as our income from certain services afforded residents in
our owned properties. See "Federal Income Tax Considerations -- Taxation
of Our Company." In order to avoid realizing such income in a manner that
would adversely affect our ability to qualify as a REIT, we will provide
certain services through our Services Company, which will elect, together
with us, to be treated as our "taxable REIT subsidiary" or "TRS." See
"Federal Income Tax Considerations -- Taxation of Our Company." Our
Services Company will also own our on-campus participating properties.
The income earned by our Services Company will, unlike its predecessor
entity, be subject to regular federal income tax and state and local
income tax where applicable and will therefore be subject to an
additional level of tax as compared to the income earned from our
properties. This will reduce our results of operations, funds from
operations and the cash otherwise available for distribution to our
stockholders.

LEASING ACTIVITY

Generally, prospective residents complete and sign a cancelable lease
application accompanied by a refundable security deposit and a non-refundable
application of administration fee. Upon processing their application, the
prospective resident executes and delivers the lease agreement and, if
required, an accompanying parental guarantee. See "Business and Properties --
Leasing and Marketing -- Student Leases."

The following tables reflect a monthly comparison of the leasing activity of
the 2003-4 academic year and our leasing activity for the 2004-5 academic year
through May 28, 2004 with respect to our same store off-campus owned properties
that were open in both periods. The first table indicates the percentage of our
beds available for lease in the upcoming student year that either were subject
to an application or were leased as of the end of the indicated month (except
for the month of May 2004, which is as of May 28, 2004). The second table
indicates the percentage of our beds available for lease in the upcoming
student year that were leased as of the end of the indicated month (except for
May 2004, which is as of May 28, 2004):

[GRAPHIC OMITTED]

RESULTS OF OPERATIONS

Comparison of Three Months ended March 31, 2004 to Three Months ended March 31,
2003

The following table presents our results of operations for the three months
ended March 31, 2004 and 2003, including the amount and percentage change in
these results between the two periods:

(IN THOUSANDS)
-------------------------------------------------------
2004 2003 CHANGE ($) CHANGE (%)
---------- ---------- ------------ --------------

Revenues:
Student housing rental and ancillary revenue ......... $ 8,494 $ 8,889 $ (395) (4.4)%
On-campus participating properties rental revenue 5,608 4,897 711 14.5 %
Third party development services ..................... 1,698 1,505 193 12.8 %
Third party property management services ............. 372 329 43 13.1 %
Other income ......................................... -- 27 (27) (100.0)%
-------- -------- -------
Total revenues ....................................... 16,172 15,647 525 3.4 %
Operating Expenses:
Student housing ...................................... 3,746 3,961 (215) (5.4)%
On-campus participating properties ................... 1,934 1,717 217 12.6 %
Third party development and property
management services ................................. 1,265 1,252 13 1.0 %
General and administrative ........................... 474 405 69 17.0 %
Depreciation ......................................... 2,346 2,316 30 1.3 %
Ground lease (on-campus participating properties) 175 129 46 35.7 %
-------- -------- -------
Total operating expenses ............................. 9,940 9,780 160 1.6 %
-------- -------
Operating income ..................................... 6,232 5,867 365 6.2 %
Nonoperating income and (expenses):
Interest income ...................................... 14 25 (11) (44.0)%
Interest expense ..................................... (4,575) (4,397) (178) 4.0 %
Amortization -- deferred finance cost ................ (163) (136) (27) 19.8 %
-------- -------- ------- -------
Total nonoperating expenses, net ..................... (4,724) (4,508) (216) 4.8 %
Minority interest in earnings (losses) ............... 21 (12) 33 275.0 %
-------- -------- ------- -------
Net income (loss) .................................... $ 1,529 $ 1,347 $ 182 13.5 %
======== ======== ======= =======

STUDENT HOUSING PROPERTIES OPERATIONS (OFF-CAMPUS)

We had 10 properties containing 6,379 beds during the three months ended March
31, 2004 and 2003, which includes the Village at Riverside with 408 beds that
we will not own subsequent to the Offering. Revenues from our off-campus
student housing properties of $8.5 million decreased by $0.4 million or 4.4% as
compared to $8.9 million for the three months ended March 31, 2003. This
decrease resulted primarily from a decline in same property occupancy rates
from 91.0% for the three months ended March 31, 2004 compared to 92.4% for the
three months ended March 31, 2003. This decline is the continued effect of the
overall softening in the multifamily submarket impacting two of our properties,
Blacksburg and Callaway, during the 2003/2004 leasing cycle. Net operating
income before depreciation and ground lease expense approximated $4.7 million
for the three months ended March 31, 2004, a decrease of $0.2 million or 4.1%
from $4.9 million for the three months ended March 31, 2003. Our continued
efforts to efficiently operate our properties resulted in our net operating
margin ratio (net operating income before and depreciation and ground lease
expense divided by total revenues) increasing from 55.4% for the three months
ended March 31, 2003 to 55.7% for the three months ended March 31, 2004.

Operating expenses of $3.8 million for the three months ended March 31, 2004
decreased $0.2 million or 5.1% from $4.0 million for the three months ended
March 31, 2003. This decrease was comprised primarily of reductions in
marketing expense of approximately $0.1 million, reductions in property

insurance premiums at our Florida properties of $0.1 million resulting from an
early replacement of our property policy, and a reduction in internet service
expense of approximately $0.1 million resulting from an early termination of an
existing service contract which was replaced with a less expensive provider.

STUDENT HOUSING PROPERTIES SUBJECT TO LEASES (ON-CAMPUS PARTICIPATING
PROPERTIES) OPERATIONS

Revenues from our on-campus participating properties represented 34.6% of our
total revenues for the three months ended March 31, 2004 compared to 31.2% for
the three months ended March 31, 2003. Revenues were $5.6 million for the three
months ended March 31, 2004, an increase of $0.7 million or 14.5% from $4.9
million for the three months ended March 31, 2003 due primarily to operations
of a new phase and a new property constructed in 2003. Our continuing efforts
to efficiently operate our properties resulted in our net operating margin
ratio (net operating income before depreciation and ground lease expenses
divided by total revenues) increasing from 64.4% for the three months ended
March 31, 2003 to 65.4% for the three months ended March 31, 2004, producing
net operating income of $3.7 million for the three months ended March 31, 2004,
an increase of $0.5 million, or 15.3%, as compared to the three months ended
March 31, 2003.

New Property Operations. We completed and opened a 210 bed phase of University
College - Prairie View A&M University and a 280 bed property on the campus of
Weatherford College in August of 2003 (Coyote Village). For the three months
ended March 31, 2004 these properties represented approximately $0.6 million of
revenue and $0.2 million of operating expenses. As contemplated in the deal
structure with Weatherford College, the Coyote Village ground lease was
transferred to the Lessor in April of 2004.

Same Property Operations (Excluding New Property Activity). We had four
properties and 3,957 beds in our on-campus participating properties portfolio
during each of the three month periods ended March 31, 2003 and 2004. While
average occupancy declined from 97.2% for the quarter ended March 31, 2003 to
95.6% for the quarter ended March 31, 2004, revenues at these properties
increased from $4.9 million for the quarter ended March 31, 2003 to $5.0
million for the quarter ended March 31, 2004, an increase of $0.1 million or
2.0% due to rental rate increases.

Operating expenses for our existing properties remained relatively constant for
the three months ended March 31, 2003 and March 31, 2004 at approximately $1.7
million.

THIRD PARTY SERVICES

Third party service revenues increased from $1.8 million for the three months
ended March 31, 2003 to $2.1 million for the three months ended March 31, 2004,
an increase of $0.3 million or 12.9%. Third party service revenues represented
12.8% of total revenues for the three months ended March 31, 2004, compared to
11.7% for the three months ended March 31, 2003.

Development Services. Third party development services revenues of $1.7 million
for the three months ended March 31, 2004 represented an increase of $0.2
million or 12.8% from $1.5 million for the three months ended March 31, 2003.
This increase resulted primarily from an increase in the number of development
projects in progress during the three months ended March 31, 2004 to twelve
projects compared to nine projects during the three months ended March 31,
2003, a 33% increase.

Management Services. Third party property management revenues of $0.4 million
for the three months ended March 31, 2004 represented an increase of $0.1
million or 13.1% from $0.3 million for the three months ended March 31, 2003.
The increase consisted of five contracts that commenced in Fall 2003.

Operating expenses for third party services remained relatively constant for
the three months ended March 31, 2003 and March 31, 2004 at approximately $1.3
million. As the size of projects has continued to increase and we continued to
deliver these services in an efficient manner, our net operating margin (third
party service revenues less third party operating expenses, divided by third
party service revenues) increased from 31.7% for the three months ended March
31, 2003 to 36.9% for the three months ended March 31, 2004.

GENERAL AND ADMINISTRATIVE

General and administrative costs of $0.4 million remained relatively constant
for the three months ended March 31, 2004 and March 31, 2003.

INTEREST EXPENSE

Interest expense of $4.6 million for the three months ended March 31, 2004
represented an increase of $0.2 million or 4.0% from $4.4 million for the three
months ended March 31, 2003. The increase in interest expense is a result of
interest on the Coyote Village project and the additional phase at University
College - Prairie View.

DEPRECIATION AND AMORTIZATION

Depreciation of $2.3 million remained relatively constant for the three months
ended March 31, 2004 and March 31, 2003. As the Coyote Village project was
contemplated to be transferred to Weatherford College from inception, no
depreciation was recorded on the asset. Amortization of deferred financing
costs of $0.1 million remained the same for the three months ended March 31,
2004 and March 31, 2003.

COMPARISON OF YEARS ENDED DECEMBER 31, 2003 AND DECEMBER 31, 2002

The following table presents our results of operations for the years ended
December 31, 2003 and 2002, including the amount and percentage change in these
results between the two periods:

IN THOUSANDS
--------------------------------------------------------
2003 2002 CHANGE ($) CHANGE (%)
----------- ----------- ------------ -------------

REVENUES:
Student housing rental and ancillary revenue ......... $ 33,763 $ 32,314 $ 1,449 4.5 %
On-campus participating properties rental
revenue ............................................. 17,002 16,670 332 2.0 %
Third party development services ..................... 7,939 5,074 2,865 56.5 %
Third party property management services ............. 1,189 945 244 25.8 %
Other income ......................................... 28 355 (327) (92.1)%
--------- --------- -------
Total revenues ....................................... 59,921 55,358 4,563 8.2 %
OPERATING EXPENSES:
Student housing ...................................... 16,472 15,970 502 3.1 %
On-campus participating properties ................... 8,031 8,250 (219) (2.7)%
Third party development and property
management services ................................. 5,389 4,441 948 21.3 %
General and administrative ........................... 2,778 2,001 777 38.8 %
Depreciation ......................................... 9,214 8,412 802 9.6 %
Ground lease (on-campus participating
properties) ......................................... 584 664 (80) (12.0)%
--------- --------- --------
Total operating expenses ............................. 42,468 39,738 2,730 6.9 %
--------- --------- --------
Operating income ..................................... 17,453 15,620 1,833 11.7 %
NONOPERATING INCOME AND EXPENSES:
Interest income ...................................... 85 167 (82) 49.1 %
Interest expense ..................................... (17,911) (17,392) (519) 3.0 %
Amortization-deferred finance costs .................. (587) (564) (23) 4.0 %
--------- --------- --------
Total nonoperating expenses, net ..................... (18,413) (17,789) (624) 3.5 %
Minority interest in losses .......................... 16 30 (14) (46.7)%
--------- --------- --------
Net loss ............................................. $ (944) $ (2,139) $ 1,195 55.9 %
========== ========= ========

Student Housing Properties Operations (Off-Campus)

Revenues from our off-campus student housing properties increased in 2003 by
$1.4 million or 4.5% as compared to 2002. This growth resulted primarily from a
full year of operations at a property we developed and opened in 2002, as
described below. Our continued efforts to efficiently operate our properties
resulted in our net operating margin ratio (net operating income before
depreciation and ground lease expense divided by total revenues) increasing
from 50.6% for 2002 to 51.2% for 2003. Net operating income approximated $17.3
million in 2003, an increase of $1.0 million or 5.8% from $16.3 million in
2002.

New Property Operations. In August of 2002 we completed construction of a 309
bed property (University Village at Boulder Creek) and opened the property at
100% occupancy for the 2002/2003 academic year. This property contributed
revenues of $2.7 million and operating expenses of $0.8 million in 2003, its
first full calendar year of operations, an increase of approximately $1.7
million and $0.5 million, respectively, from its partial first year of
operation in 2002.

Same Property Operations (Excluding New Property Activity). Excluding the new
University Village at Boulder Creek, we had nine properties and 6,070 beds in
our owned off campus portfolio in 2003 and 2002 which produced revenues of
$31.1 million and $31.3 million in those years, respectively. Our weighted
average occupancy of 86.1% for 2003 decreased from 86.3% in 2002. We believe
that the decrease in both revenue and occupancy from December 31, 2002 to
December 31, 2003 was primarily due to a softening overall multi-family
submarket impacting three properties, including the Village at Riverside.

Operating expenses of $15.7 million for 2003 increased $0.5 million or 3.3%
from $15.2 million in 2002. In response to the market pressures described
above, we significantly increased our marketing efforts in certain markets
resulting in marketing expense of $0.8 million in 2003, an increase of $0.2
million or 33.3% from $0.6 million in 2002. Additional increases included merit
increases and increased health insurance costs of approximately $0.1 million or
3.9% and an increase in property taxes of $0.2 million or 6.6%. These increases
were offset, in part, by a decline in provision for doubtful accounts of $0.2
million or 42.3% resulting from refining our approach to collection of student
accounts receivable.

Student Housing Properties Subject to Leases (On-Campus Participating
Properties) Operations

Revenues from our on-campus participating properties represented 28.3% of our
total revenues for 2003 compared to 30.0% for 2002. Revenues were $17.0 million
in 2003, an increase of $0.3 million or 2.0% from $16.7 million in 2002 due
primarily to operations of a new phase and a new property constructed in 2003.
Our continuing efforts to efficiently operate our properties resulted in our
net operating margin ratio (net operating income before depreciation and ground
lease expense divided by total revenues) increasing from 50.5% for 2002 to
52.8% for 2003, producing net operating income of $9.0 million in 2003, an
increase of $0.6 million, or 6.5%, as compared to 2002.

New Property Operations. We completed and opened a 521 bed property (Cardinal
Village II) in August of 2002 on the campus of Lamar University and, as
contemplated in the deal structure with the University, subsequently
transferred our interest in the ground lease to the ground lessor in December
of that year. In 2002 this property represented revenue of $0.6 million and
operating expenses of $0.1 million. We completed and opened a 210 bed phase of
University College - Prairie View A&M University and a 280 bed property on the
campus of Weatherford College in August of 2003 (Coyote Village). In 2003 these
properties represented $0.8 million of revenue and $0.3 million of operating
expenses. As contemplated in the deal structure with the College, the
Weatherford ground lease was transferred to the Lessor in April of 2004.

Same Property Operations (Excluding New Property Activity). We had four
properties and 3,957 beds in our on-campus participating properties portfolio
in 2003 and 2002. Revenues at these properties remained relatively constant
from 2003 to 2002 at approximately $16.1 million. Weighted average occupancy
was 95.5% for 2003 compared to 95.2% in 2002.

Operating expenses for our existing properties were approximately $7.7 million
and $8.1 million in 2003 and 2002, respectively, a decrease of $0.4 million or
4.9%. This decline was the result of a reduction in insurance premiums and
reductions in expenses related to Corporate Management and oversight.

Third-Party Services

Third party service revenues increased from $6.0 million in 2002 to $9.1
million in 2003, an increase of $3.1 million or 51.7%. Third party service
revenues represented 15.2% of total revenues for 2003, compared to 10.8% for
2002.

Development Services. Third-party development services revenues of $7.9 million
in 2003 represented an increase of $2.8 million or 54.9% from $5.1 million in
2002. This increase resulted primarily from an increase in the number of
development projects in progress (twelve in 2003 compared to nine in 2002, a
33% increase). Incentive fees based on cost savings were $0.2 million for 2002
and 2003.

Management Services. Third-party property management revenues of $1.2 million
in 2003 represented an increase of $0.2 million or 25.8% from $1.0 million in
2002. The increase consisted of $0.2 million from a full year of fees from
contracts beginning in 2002 and an increase of $0.2 million from five contracts
that commenced in Fall 2003, offset, in part, by the final amortization in 2002
of a deferred cancellation fee in the amount of $0.2 million.

This increase in the volume of our third party service business required us to
correspondingly increase the resources and related costs dedicated to the
pursuit and delivery of third party services. Consequently, our compensation
and benefits, insurance and pursuit costs, increased by $1.0 million or 22.7%
from $4.4 million in 2002 to $5.4 million in 2003. In part, these increased
expenses reflect our increased staffing needs in this area. As the size of
projects continued to increase and we continued to deliver these services with
increased efficiency, our net operating margin (third-party service revenues
less third-party operating expenses, divided by third party service revenues)
increased from 26.2% in 2002 to 41.0% in 2003.

Interest and Other Income

In 2003, interest and other income of $0.1 million decreased by $0.4 million or
78.4% from $0.5 million in 2002. In conjunction with the construction of our
Boulder Creek project, we constructed 43 permanently affordable condominiums
for sale and received a $0.3 million grant from the local governmental
authorities. We deferred this grant and included it in the calculation of the
gain from the sale of the units which were approximately $0.3 million and $0.02
million in 2002 and 2003, respectively.

General and Administrative

General and administrative costs of $2.8 million in 2003 represented an
increase of $0.8 million or 38.8% from $2.0 million in 2002. The increase was
caused primarily by a severance accrual for our former chief executive officer.

Interest Expense

Interest expense of $17.9 million in 2003 represented an increase of $0.5
million or 3.0% from $17.4 million in 2002. The increase consisted primarily of
a full year's interest expense in 2003 relating to a developed property that
opened in Fall of 2002 and a partial year's interest expense on two developed
on-campus participating properties that opened in Fall 2003, partially offset
by a decrease in interest expense resulting from principal amortization.

Depreciation and Amortization

Depreciation of $9.2 million for 2003 represented an increase of $0.8 million
or 9.6% due to a full year's depreciation of one property placed in service
during 2002 and depreciation of an on-campus participating property placed in
service in 2003. Amortization of deferred financing costs of $0.6 million for
2003 represented a decrease of $0.3 million or 33.1% from $0.9 million in 2002
as a result of our expensing $0.3 million of unamortized deferred financing
costs from a construction loan refinancing in 2002.

COMPARISON OF YEARS ENDED DECEMBER 31, 2002 AND DECEMBER 31, 2001

The following table presents our results of operations for the year ended
December 31, 2002 and 2001, including the amount and percentage change in these
results between the two periods:

IN THOUSANDS
------------------------------------------------
2002 2001 CHANGE ($) CHANGE (%)
----------- ----------- ------------ -----------

REVENUES:
Student housing rental and ancillary revenue ................ $ 32,314 $ 26,235 $ 6,079 23.2 %
On-campus participating properties rental and ancillary
revenues ................................................... 16,670 13,672 2,998 21.9 %
Third party development services ............................ 5,074 2,878 2,196 76.3 %
Third party property management services .................... 945 1,032 (87) (8.4)%
Other income ................................................ 355 88 267 303.4 %
--------- --------- -------
Total revenues .............................................. 55,358 43,905 11,453 26.1 %
OPERATING EXPENSES:
Student housing ............................................. 15,970 12,258 3,712 30.3 %
On-campus participating properties .......................... 8,250 6,469 1,781 27.5 %
Third party development and property management services 4,441 3,373 1,068 31.7 %
General and administrative .................................. 2,001 1,659 342 20.6 %
Depreciation ................................................ 8,412 6,951 1,461 21.0 %
Ground lease (on-campus participating properties) ........... 664 632 32 5.1 %
--------- --------- -------
Total operating expenses .................................... 39,738 31,342 8,396 26.8 %
--------- --------- -------
Operating income ............................................ 15,620 12,563 3,057 24.3 %
NONOPERATING INCOME AND EXPENSES:
Interest income ............................................. 167 350 (183) (52.3)%
Interest expense ............................................ (17,392) (15,556) (1,836) 11.8 %
Amortization-deferred finance costs ......................... (564) (406) (158) 38.9 %
--------- --------- -------
Total nonoperating expenses ................................. (17,789) (15,612) (2,177) 13.9 %
Minority interest in losses ................................. 30 110 (80) (72.7)%
--------- --------- -------
Net loss .................................................... $ (2,139) $ (2,939) $ 800 (27.2)%
========= ========= ======= ========

Student Housing Properties Operations (Off-Campus)

Revenues from our off-campus student housing properties increased in 2002 by
$6.1 million or 23.2% as compared to 2001. This growth came primarily from a
full calendar year of operations at two properties that we acquired in 2001 and
a property that we developed and opened in 2002, as described below. While our
net operating income increased to $16.3 million in 2002 from $14.0 million in
2001, an increase of $2.3 million or 16.9%, our net operating margin ratio (net
operating income before depreciation and ground lease expense divided by total
revenues) declined from 53.3% for 2001 to 50.6% for 2002 due largely to
increases in insurance premiums and recognition of expenses related to the
collection of doubtful accounts.

New Property Operations. In March 2001 we acquired The Callaway House, a 538
bed property and in November we acquired the Village at Science Drive, a 732
bed property. These properties contributed revenues of $9.3 million and
operating expenses of $5.3 million for the full calendar year of operation in
2002, an increase of approximately $5.2 million and $2.3 million, respectively,
from their partial first year of operations in 2001, the year of their
acquisition. Additionally, in August of 2002 we completed construction of a 309
bed property (University Village at Boulder Creek) and opened the property at
100% occupancy for the 2002/2003 academic lease term. This new property
contributed revenues of $1.0 million and operating expenses of $0.3 million
from its partial first year of operations in 2002.

Same Property Operations (Excluding New Property Activity). We had seven
properties containing 4,800 beds in our owned off-campus portfolio in 2002 and
2001 which produced revenues of approximately $22.0 million in each of those
years. Our weighted average occupancy of 86.7% for 2002 decreased from 88.7% in
2001.

At these existing properties, operating expenses of $10.4 million in 2002
increased by $1.2 million, or 13.0%, as compared to 9.2 million in 2001. The
increase resulted primarily from increases of approximately $0.2 million in
compensation and benefits, $0.3 million in property and liability insurance
caused by premium increases, $0.2 million in additional provisions for
allowance for doubtful accounts related to our implementation of a standardized
collections process in early 2002, and increases in allocated expenses related
to corporate management and oversight. These increases were partially offset by
reductions in other expenses, which include $0.2 million or 12.6% reduction in
maintenance and unit "make-ready" costs due to our implementation of an
enhanced process.

Student Housing Properties Subject to Leases (On-Campus Participating
Properties) Operations

Revenues from our on-campus participating properties represented 30.0% of our
total revenues for 2002 compared to 30.9% for 2001. Revenues were $16.7 million
in 2002, an increase of $3.0 million or 21.9% from $13.7 million in 2001 due
primarily to a full calendar year of operations at a new property constructed
in 2001. While our net operating income increased to $8.4 million in 2002 from
$7.2 million in 2001, an increase of $1.2 million or 16.9%, our net operating
margin ratio (net operating income before depreciation and ground lease expense
divided by total revenues) declined from 52.7% for 2001 to 50.5% for 2001
resulting from increases in certain operating expenses as more fully described
below.

New Property Operations. We completed and opened on the campus of Lamar
University a 521 bed property in August of 2001 and a similar property in
August of 2002. As contemplated in the deal structure with the University, we
transferred our interest in the ground leases to the ground lessor in those
same years. In 2002 and 2001, these properties represented revenues of $0.9
million and $0.6 million, respectively, and operating expenses of $0.3 million
and $0.1 million, respectively. Additionally we constructed and opened a 525
bed property for the University of Houston in August of 2001. In 2002, this
property represented revenues of $2.9 million and operating expenses of $1.4
million, compared to revenues of $1.2 million and direct operating expenses of
$0.5 million in 2001.

Same Property Operations (Excluding New Property Activity). We had three
properties containing 3,432 beds in our on-campus participating properties
portfolio in 2002 and 2001. Revenues from these properties approximated $13.2
million and $11.6 million for 2002 and 2001, respectively an increase of $1.6
million or 13.8%. Weighted average occupancy was 94.9% for 2002 compared to
93.4% for 2001.

Operating expenses for existing properties totaled $6.5 million in 2002 an
increase of $0.7 million or 12.0% from $5.8 million in 2001. The increase was
largely attributable to payroll and related benefits increases of $0.1 million,
maintenance expense increases of $0.2 million, utilities increases $0.2
million, and property and liability insurance expense increases of $0.1 million
due to higher premiums.

Third Party Services

Third party service revenues increased from $3.9 million in 2001 to $6.0
million in 2002, an increase of $2.1 million or 53.9%. Third party service
revenues represented 10.8% of total revenues for 2002, compared to 8.8% for
2001.

Third party development services revenues of $5.1 million in 2002 increased
$2.2 million or 76.3% from $2.9 million in 2001. While there were nine projects
underway for both 2002 and 2001, the total contract fees for projects under
construction in 2002 approximated $8.3 million compared to $7.1 million for
projects under construction in 2001. Incentive fees based on construction
savings increased from $0.1 million in 2001 to $0.2 million in 2002.

Third party property management revenues of $0.9 million in 2002 decreased by
$0.1 million or 8.5% from $1 million in 2001. During 2002, we acquired the
ownership interest of a former minority owner, resulting in the elimination in
consolidation of the minority owner's relative share of third party

management fee revenue, resulting in the slight decrease in revenues. Four new
contracts increased revenues by $0.3 million in 2002. This increase was offset
by a non recurring consultation fee earned in 2001 of approximately $0.3
million.

This increase in the volume of third party service business required a
corresponding increase in resources related to the pursuit and delivery of
third party services. Consequently, these expenses, primarily related to
compensation and benefits for increased levels of staffing, insurance and
pursuit costs, increased by $1.0 million or 31.7% from $3.4 million in 2001 to
$4.4 million in 2002. As the size of projects continued to increase and we
continued to deliver these services with increased efficiency, our net
operating margin increased from 13.7% in 2001 to 26.2% in 2002.

Interest and Other Income

Interest and other income of $0.5 million in 2002 increased by $0.1 million or
19.2% from $0.4 million in 2001. The increase consisted of $0.3 million from
gains on sales of condominium units related to the Boulder Creek project in
2002 compared to a $0.1 million gain resulting from the sale of a property
lease in 2001, offset in part by higher interest income in 2001 due to higher
cash balances.

General and Administrative Expense

General and administrative expense of $2.0 million in 2002 increased by $0.3
million or 20.6% from $1.7 million in 2001. The increase consisted primarily of
expenses related to personnel costs and increased office expense required by
the continued growth of our Company, and increases in insurance expense related
to increased coverages and higher premiums.

Interest Expense

Interest expense of $17.4 million for 2002 increased by $1.8 million or 11.8%
from $15.6 million in 2001. The increase in interest expense consisted of an
increase of $1.2 million from a full year's interest expense from two
properties acquired in 2001 and $0.5 million from one constructed property
subject to lease that opened in 2001, and $0.3 million from a developed
property opened in 2002 offset by $0.2 million from reductions caused by
principal amortization.

Depreciation and Amortization

Depreciation of $8.4 million in 2002 increased by $1.5 million or 21.0% from
$7.0 million in 2001 consisting of a full calendar year's depreciation on three
properties acquired or developed in 2001 and a partial year's depreciation on
one property developed in 2002. Amortization of deferred financing costs of
$0.6 million in 2002 increased $0.2 million or 38.9% from $0.2 million in 2001
due to the expensing in 2002 of unamortized deferred financing costs of $0.3
million in conjunction with the refinancing of a construction loan.

PRO FORMA OPERATING RESULTS

COMPARISON OF PRO FORMA THREE MONTHS ENDED MARCH 31, 2004 TO HISTORICAL THREE
MONTHS ENDED MARCH 31, 2004

The following table presents our historic and pro forma results of operations
for the three months ended March 31, 2004, including the amount and percentage
change in the results between the two periods.

Our pro forma condensed consolidated statement of operations for the three
months ended March 31, 2004 is presented as if this Offering and the formation
transactions, as well as the repayment of indebtedness with the proceeds of
this Offering, the distribution of The Village at Riverside to an entity
jointly owned by RAP and RSVP, and the acquisition of Titan's minority
interests in the ACT Properties, all had occurred on January 1, 2004.

IN THOUSANDS
------------------------------------------------------------
HISTORICAL -
COMPANY PREDECESSOR
PRO FORMA COMPANIES CHANGE ($) CHANGE (%)
------------- ------------- ------------ -------------

Revenues:
Student housing rental and ancillary revenue ......... $ 7,995 $ 8,494 $ (499) (5.9)%
On-campus participating properties rental revenue 5,608 5,608 -- --
Third party development services ..................... 1,698 1,698 -- --
Third party property management services ............. 384 372 12 3.5 %
Other income ......................................... (5) -- (5) --
---------- -------- ------
Total revenues ....................................... 15,680 16,172 (492) (3.0)%
Operating Expenses:
Student housing ...................................... 3,439 3,746 (307) (8.2)%
On-campus participating properties ................... 1,942 1,934 8 0.4 %
Third party development and property
management services ................................. 1,265 1,265 -- --
General and administrative ........................... 849 474 375 79.1 %
Depreciation ......................................... 2,249 2,346 (97) (4.1)%
Ground lease (on-campus participating properties) 175 175 --
--------- -------- ------
Total operating expenses ............................. 9,919 9,940 (21) (0.2)%
--------- -------- ------
Operating income ..................................... 5,761 6,232 (471) (7.6)%
Nonoperating income and (expenses):
Interest income ...................................... 13 14 (1) (7.1)%
Interest expense ..................................... (3,643) (4,575) 932 20.4 %
Amortization - deferred finance costs ................ (163) (163) -- --
--------- -------- ------
Total nonoperating expenses, net ..................... (3,793) (4,724) 931 19.7 %
Provision for income tax ............................. 8 -- (8) --
Minority interest in (earnings) losses ............... (25) 21 (46) (219.0)%
--------- -------- ------
Net income (loss) .................................... $ 1,935 $ 1,529 $ 406 26.6 %
========= ======== ======

Student Housing Properties Operations

The distribution of The Village at Riverside resulted in a pro forma reduction
of student housing revenues of approximately $0.5 million and direct operating
expenses of $0.3 million.

General and Administrative

Pro forma general and administrative expense increased by approximately $0.4
million to reflect adjustments to staffing and compensation to support the
needs of a public company and increases in premiums related to directors' and
officers' liability insurance.

Interest Expense

Pro forma interest expense reflects reductions totaling approximately $0.9
million comprised of $.8 million related to the repayment of five loans
totaling approximately $69.8 million and $0.2 million related to the
distribution of The Village at Riverside, partially offset by $0.1 million of
additional interest expense resulting from the financing of $5.7 million
related to the acquisition of the minority interest in the American Campus -
Titan Properties.

Depreciation

The reduction of $0.1 million reflects the distribution of The Village at
Riverside, offset by an increase of $0.05 million from the acquisition in
Titan's minority interests.

Minority Interest in Losses

The change in minority interest in earnings resulted from the acquisition of
Titan's minority ownership interests in the American Campus - Titan Properties,
which eliminated approximately $0.02 million in minority interest in earnings,
and the reflection of the approximately 1.3% minority interest held by the PIU
holders.

COMPARISON OF PRO FORMA YEAR ENDED DECEMBER 31, 2003 TO HISTORIC YEAR ENDED
DECEMBER 31, 2003

Our pro forma condensed consolidated statement of operations for the year ended
December 31, 2003 is presented as if this Offering and the formation
transactions, as well as the repayment of indebtedness with the proceeds of
this Offering, the distribution of The Village at Riverside to an entity owned
by RAP and RSVP, and the acquisition of Titan's minority interests in the
American Campus - Titan Properties, all had occurred on January 1, 2003.

IN THOUSANDS
----------------------------------------------------------
COMPANY
PRO FORMA HISTORICAL - PREDECESSOR ENTITIES
2003 2003 CHANGE ($) CHANGE (%)
----------- ----------- ---------------- -----------

REVENUES:
Student housing rental and ancillary revenue ......... $ 31,514 $ 33,763 $ (2,249) (6.7)%
On-campus participating properties rental ............ 17,002 17,002 -- --
Third party development services ..................... 7,939 7,939 -- --
Third party property management services ............. 1,245 1,189 56 4.7 %
Other income ......................................... 12 28 (16) (57.1)%
--------- --------- ------------
Total revenues ....................................... 57,712 59,921 (2,209) (3.7)%
OPERATING EXPENSES:
Student housing ...................................... 15,246 16,472 (1,226) (7.4)%
On-campus participating properties ................... 8,031 8,031 -- --
Third party development and property
management services ................................. 5,389 5,389 -- --
General and administrative ........................... 4,278 2,778 1,500 54.0 %
Depreciation ......................................... 8,828 9,214 (386) (4.2)%
Ground lease (on-campus participating
properties) ......................................... 584 584 -- --
--------- --------- ------------
Total operating expenses ............................. 42,356 42,468 (112) (0.3)%
--------- --------- ------------ -------
Operating income ..................................... 15,356 17,453 (2,097) (12.0)%
NONOPERATING INCOME AND EXPENSES:
Interest income ...................................... 71 85 (14) (16.5)%
Interest expense ..................................... (14,171) (17,911) 3,740 (20.9)%
Amortization - deferred financing costs .............. (584) (587) 3 (0.5)%
--------- --------- ------------ -------
Total nonoperating expenses, net ..................... (14,684) (18,413) 3,729 (20.3)%
Provision for income tax ............................. 8 -- (8) NA
Minority interest in (income) losses ................. (13) 16 (29) 181.3 %
--------- --------- --------------
Net income (loss) .................................... $ 651 $ (944) $ 1,595 169.0 %
========= ========= ==============

Student Housing Properties Operations

The distribution of The Village at Riverside resulted in a pro forma reduction
of student housing revenues of approximately $2.5 million and direct operating
expenses of $1.2 million.

Interest Expense

Pro forma interest expense reflects reductions totaling approximately $4.0
million comprised of $3.1 million related to the repayment of five loans
totaling approximately $69.8 million and $0.9 million related to the
distribution of The Village at Riverside, partially offset by $0.2 million of
additional interest expense resulting from the financing of $5.7 million
related to the acquisition of the minority interests in the American Campus -
Titan Properties.

Depreciation

The reduction of $0.3 million reflects the distribution of The Village at
Riverside, offset by an increase of $0.2 million resulting from the acquisition
of Titan's minority interests.

Minority Interests

The minority interest in losses of $0.02 million was eliminated due to the
acquisition of Titan's minority ownership interests in the American Campus -
Titan Properties and a new minority interest in income of $0.01 million was
reflected which represents the approximately 1.3% minority interest held by the
PIU holders.

CASH FLOWS

COMPARISON OF THREE MONTHS ENDED MARCH 31, 2004 AND MARCH 31, 2003

Operating Activities

For the three months ended March 31, 2004, net cash provided by operating
activities before changes in working capital accounts provided $4.0 million,
compared to $3.8 million for the three months ended March 31, 2003, an increase
of $0.2 million resulting from the corresponding increase in the net income for
the three months ended March 31, 2004. Changes in working capital accounts
provided $1.5 million for the three months ended March 31, 2004 while $0.3
million was used by changes in working capital accounts for the three months
ended March 31, 2003. This change was primarily the result of an increase in
student accounts receivable of $2.4 million for the three months ended March
31, 2004 compared to a decrease of $0.5 million in the three months ended March
31, 2003, caused by the timing of a receipt of financial aid payments in the
three months ended March 31, 2004 for our participating properties. Other
current assets decreased $2.3 million for the three months ended March 31, 2004
compared to $-0- for the three months ended March 31, 2003, as a result of
receipt of insurance proceeds related to the Fresno fire during the three
months ended March 31, 2004. Accounts payable and accrued expenses increased
$2.4 million for the three months ended March 31, 2004 compared to a decrease
of $2.0 million for the three months ended March 31, 2003. The increase in the
three months ended March 31, 2004 relates primarily to accrued expenses
associated with the Fresno fire reconstruction.

Investing Activities

Investing activities used $19.2 million and $4.4 million for the three months
ended March 31, 2004 and 2003, respectively. Investments in these periods
related to the Village at Fresno, Village at San Bernardino, and Village at TU
off campus construction projects.

Financing Activities

Cash provided by financing activities totaled $12.7 million and $3.5 million
for the three months ended March 31, 2004 and 2003, respectively. Financing of
the construction of the Fresno, San Bernardino, and TU projects accounted for
$15.6 million and $4.6 million in the three months ended March 31, 2004 and the
three months ended March 31, 2003, respectively. Costs related to this Offering
totaled $1.7 million for the three months ended March 31, 2004. Distributions,
net of contributions, totaled $0.5 million and $0.2 million for the three
months ended March 31, 2004 and 2003, respectively.

COMPARISON OF YEARS ENDED DECEMBER 31, 2003 AND DECEMBER 31, 2002

Operating Activities

Net cash provided by operating activities before changes in working capital
accounts totaled $8.9 million and $6.8 million for 2003 and 2002, respectively,
an increase of $2.1 million or 30.8%. The increase was due primarily to an
increase in rental revenues representing the impact of the addition of
properties and increased development services revenues. Changes in working
capital accounts reduced cash from operating activities by $2.6 million in
2003, while changes in capital accounts increased cash by $1.1 million in 2002.

Investing Activities

Net cash used in investing activities totaled $33.7 million and $21.7 million
for 2003 and 2002, respectively, an increase of $12.0 million or 55.3%. The
increase related to the construction of two on-campus participating properties
that opened in 2003 and three off-campus owned properties under construction
during 2003 that are scheduled to open in August 2004.

Financing Activities

Net cash provided by financing activities totaled $22.1 million and $11.3
million for 2003 and 2002, respectively, an increase of $10.8 million or 95.6%.
This increase was due primarily to borrowings and contributions to fund
construction of two on-campus participating properties and three off-campus
owned properties under construction during 2003, offset by an increase in
distributions to RAP and RSVP of $2.1 million.

COMPARISON OF YEARS ENDED DECEMBER 31, 2002 AND DECEMBER 31, 2001

Operating Activities

Net cash provided by operating activities before changes in working capital
accounts totaled $6.8 million and $4.4 million for 2002 and 2001, respectively,
an increase of $2.4 million or 54.5%. The increase was due primarily to
acquisitions of two owned off-campus properties in 2001, that resulted in a
partial year of operation in 2001 and a full year of operation in 2002, results
from on-campus participating properties that were developed in 2001 and 2002,
and increases in development services revenues. Changes in working capital
accounts increased cash from operating activities by $1.1 million in 2002.

Investing Activities

Net cash used in investing activities totaled $21.7 million and $68.5 million
in 2002 and 2001, respectively, a decrease of $46.8 million or 68.3%. Investing
activities in 2001 related to the completed construction of one on-campus
participating property and the commencement of construction of one owned
off-campus property as well as the acquisition of two off-campus properties.
Investing activities in 2002 consisted of continued construction of
one off-campus owned property and the Commencement of construction of one
on-campus property and one off-campus owned property.

Financing Activities

Net cash provided by financing activities totaled $11.3 million and $72.8
million in 2002 and 2001, respectively, a decrease of $61.5 million or 84.5%.
Financing activities in 2002 included borrowings and contributions to fund
construction of two off-campus owned properties, borrowings to fund
construction of one on-campus participating property which was sold to the
ground lessor and the related debt repaid in 2002. Financing activities in 2001
included borrowings and contributions to commence construction of one
off-campus owned property and the acquisition of two off-campus owned
properties and borrowings to fund construction of one on-campus participating
property. Additionally, in 2001 $15.4 million was contributed by owners, the
majority of which was subsequently distributed back to owners, $8.0 million in
2001 and $4.4 million in 2002.

LIQUIDITY AND CAPITAL RESOURCES

We believe that this Offering and the formation transactions will improve our
financial performance by enabling us to reduce the overall indebtedness
encumbering our properties and positioning us to access the public capital
markets to fund our growth. Upon completion of this Offering, the formation
transactions and the repayment of certain of our property-related indebtedness,
we will have outstanding long-term indebtedness of approximately $112.9 million
that is associated with our off-campus owned properties. We will also have
outstanding approximately $61.0 million of long-term bond financing and $17.2
million of mortgage loans associated with our on-campus participating
properties, and we will use approximately $5.7 million of this facility to
acquire Titan's interests in the American Campus - Titan Properties. Our total
indebtedness will be approximately $196.8 million.

Concurrently with this Offering, we intend to enter into a $ million
revolving credit facility with affiliates of Citigroup Global Markets, Inc. and
Deutsche Bank Securities Inc., two of our underwriters, as joint lead
arrangers. This revolving credit facility will be available to fund our
acquisition and general corporate working capital needs.

Our short term liquidity needs include funds for distribution payments to our
stockholders, including those required to maintain our REIT status and satisfy
our current distribution policy, funds for capital expenditures and,
potentially, funds for new developments and acquisitions. We expect to meet our
short-term liquidity requirements generally through net cash provided by
operations and, if necessary, by borrowings under our credit facility.

Our ability to meet our long-term liquidity requirements for the funding of
property development, property acquisitions and other non-recurring capital
improvements will depend upon our ability to generate sufficient net cash from
operations, incur long-term secured and unsecured indebtedness, including
borrowings under our credit facility, and issue equity and debt securities,
including units of our Operating Partnership, as to which no assurances can be
given. We may seek to replace borrowings under our credit facility with
long-term mortgage financing.

We anticipate that, following this Offering, our existing working capital, cash
from operations and the cash available from borrowings under our secured line
of credit will be adequate to meet our liquidity requirements for at least the
next twelve months.

PROPERTIES UNDER CONSTRUCTION

The outstanding balance of the construction notes and liabilities payable with
respect to our three off-campus owned properties currently under construction
will be repaid with the net proceeds of this Offering. The remainder of the
construction costs will thereafter generally also be funded with the net
proceeds of this Offering. At March 31, 2004, the outstanding amounts related
to these construction properties, and the remaining budgeted construction
costs, were as follows:

IN THOUSANDS
-----------------------------------------
CONSTRUCTION
NOTE PAYABLES ACCRUED
PAYABLE DUE INTEREST
----------- ------------------ ----------

University Village at Fresno ................ $ 8,280 $ 1,302 24
University Village at San Bernardino ........ 9,267 2,213 24
University Village at TU - Mezzanine ........ 6,550 -- 244
University Village at TU - Construction ..... 6,261 5,394 --
Total/Weighted Average Rate ................. $ 30,358 $ 8,909 (1) 292

IN THOUSANDS
-----------------------------------------------
REMAINING TOTAL TO BE
CONSTRUCTION PAID FROM INTEREST
BUDGET(2) PROCEEDS RATE
-------------- ------------ ------------------

University Village at Fresno ................ $ 4,926 $ 14,532 3.43%
University Village at San Bernardino ........ 8,295 19,799 3.40%
University Village at TU - Mezzanine ........ -- 6,794 18.00% (3)
University Village at TU - Construction ..... 21,779 33,434 3.34%
Total/Weighted Average Rate ................. $ 35,000 $ 74,559 6.54%

- ----------------

(1) Excludes budgeted construction period interest for the remaining
construction period.

(2) Will be paid with the net proceeds of this Offering as amounts come due.

(3) Mezzanine debt - requires an 18% total return.

RECURRING CAPITAL EXPENDITURES

Our properties require periodic investments of capital for general capital
expenditures and improvements. Our historical recurring capital expenditures at
our owned off-campus properties are set forth below:

AS OF AND FOR THE YEARS ENDED DECEMBER 31,
------------------------------------------
2003 2002 2001
-------------- -------------- ------------

Total units ........................... 1,802 1,802 1,610
Total beds ............................ 6,070 6,070 5,338
Total recurring capital expenditures .. $ 1,154,000 $ 1,092,000 $ 689,000
Average per unit ...................... $ 641 $ 606 $ 428
Average per bed ....................... $ 190 $ 180 $ 128

Capital expenditures associated with newly acquired or developed properties are
typically capitalized as part of their acquisition price or development budget,
so that such properties typically begin to require recurring capital
expenditures only following their first year of ownership.

Additionally, we are required by certain of our lenders to contribute amounts
to reserves for capital repairs and improvements at their mortgaged properties.
These annual contributions may exceed the amount of capital expenditures
actually incurred in such year at such properties.

PRE-DEVELOPMENT EXPENDITURES

Our third party development activities have historically required us to fund
pre-development expenditures such as architectural fees, permits and deposits.
Because the closing of a development project's financing is often subject to
third party delay, we cannot always predict accurately the liquidity needs of
these activities. We frequently incur these predevelopment expenditures before
a financing commitment has been obtained and, accordingly, bear the risk of the
loss of these predevelopment expenditures if a financing cannot ultimately be
arranged on acceptable terms. Historically, the development projects that we
have been awarded have been successfully structured and financed; however,
their development has at times been delayed beyond the period initially
scheduled, causing revenue to be recognized in later periods.

COMMITMENTS

Upon completion of this Offering, we will have outstanding significant
long-term obligations under the participating ground leases with respect to our
on-campus participating properties. These ground leases typically provide for
payment of a nominal fixed rent (e.g., $100 per annum over the lease term) but
require, in addition, payment to the university-ground lessor of 50% of the
properties' net cash available for distribution, calculated and distributed on
an annual basis after payment of operating expenses, debt service (which
includes significant amounts towards repayment of principal) and capital
expenditures. In the years 2003, 2002 and 2001, this amount totaled
approximately $0.6 million, $0.7 million and $0.6 million, respectively. We are
not contractually required to fund the liquidity needs (if any) of these
properties and do not have access to their cash flow (except as indicated
above) for any purpose other than operations at these properties.

We hold a leasehold interest in University Village at TU pursuant to a 75-year
ground lease with Temple University that requires us to pay annual minimum rent
of $0.1 million, plus (i) an annual "preferred return" (defined as the amount
by which net revenues exceed $150,000, not to exceed $50,000), and (ii) 1% of
the amount by which net revenues exceed the sum of the preferred return plus
$150,000. In addition, we must pay the University (a) 1% of the amount, if any,
of the refinancing net proceeds and (b) 1% of the amount, if any, of the net
proceeds from any sale of our leasehold interest, excluding sales to an
affiliate or the University. This property is expected to open in the Fall of
2004.

We are required to pay $0.5 million in minimum lease payments over the next 5
years under two capital lease obligations relating to technology, furniture,
fixtures and equipment.

Under certain third party development agreements, we provide guarantees of
alternate housing for students in the event a project is not completed on time
for reasons other than force majeure. These guarantees are limited to our
related development fees (approximately $4.5 million at December 31, 2003) and
would be partially offset by claims that we would have under such circumstances
against our general contractor as well as certain savings on budgeted operating
expenses that would not be incurred until the property opened. We also provide
customary project cost guarantees that do not apply in the event of force
majeure. These guarantees are also limited to the amount of the related
development fees. Our general contractors are typically liable to us, subject
to force majeure and approved change orders, to cover any cost overruns at our
projects. These general contractor obligations are typically secured with
payment and performance bonds. Our guarantees expire upon our satisfaction of
certain "walk through" and other conditions with respect to the development
projects, typically not later than one year after completion. In one instance,
we have also guaranteed losses of up to $3.0 million in excess of our
development fee that result from our failure to maintain, or cause our
professionals to maintain, required insurance for a period of five years beyond
completion of the project (August 2009).

In connection with our formation transactions, we will assume pre-existing
guarantees by our Operating Partnership of certain contingent obligations of
RAP and RSVP under the non-recourse indebtedness encumbering The Village at
Riverside. This indebtedness is scheduled to mature in January 2011 and, as of
December 31, 2003, had an outstanding balance of $11.5 million.

The following table summarizes (in thousands) as of December 31, 2003 in the
periods in which they are due our contractual obligations after giving effect
to the application of the net proceeds from this Offering and the formation
transactions:

IN THOUSANDS
----------------------------------------------------------------------------
LESS
THAN 1 1-3 3-5 MORE THAN
CONTRACTUAL OBLIGATIONS TOTAL YEAR YEARS YEARS 5 YEARS
- ---------------------------------------- -------------------- ---------- ----------- ----------- ------------

Long-Term Debt Obligations(2) .......... $ 199,530 (1) $ 2,860 $ 14,250 $ 23,034 $ 159,386
Capital Lease Obligations .............. 491 161 252 78 --
Operating Lease Obligations(3) ......... 10,480 568 1,065 936 7,911
Purchase Obligations ................... -- -- -- -- --
Other Long-Term Liabilities ............ -- -- -- -- --
----------- ------- -------- -------- ---------
TOTAL .................................. $ 210,501 $ 3,589 $ 15,567 $ 24,048 $ 167,297
=========== ======= ======== ======== =========

- ----------------

(1) Includes $8 million of indebtedness of Coyote Village that was transferred
to Weatherford College in April 2004 and the related indebtedness was
repaid by the College.

(2) Includes required monthly principal amortization and amounts due at
maturity.

(3) Includes only the required annual payment of $100,000 to Temple University
under terms of ground lease. Contingent payments to the university-ground
lessors with respect to our on-campus participating properties and under
the Temple University ground lease are not included because the amounts
and timing of these payments cannot be determined with certainty. Our
contingent obligation under our Operating Partnership's guaranty of
certain obligations under the indebtedness securing The Village at
Riverside has similarly not been reflected.

LONG-TERM INDEBTEDNESS TO BE OUTSTANDING AFTER THIS OFFERING

Upon completion of this Offering and the formation transactions, we will have
outstanding long-term indebtedness totaling approximately $191.1 million
(excluding approximately $8.0 million related to Coyote Village described
above), but excludes approximately $61.0 million of long-term bond financing
and $17.2 million in mortgage financing associated with our on-campus
participating properties but excluding short-term borrowings of $5.7 million
under our revolving credit facility related to the acquisition of the American
Campus - Titan Properties. The following table summarizes our repayment
obligations for each of the five years following December 31, 2003 under the
consolidated long-term indebtedness that will be outstanding upon consummation
of this Offering and the formation transactions.

AMOUNTS
(IN THOUSANDS)
----------------------------------------------
OFF-CAMPUS ON-CAMPUS
OWNED PARTICIPATING
PROPERTIES PROPERTIES TOTAL
------------ ---------------- ------------

2004 ............... $ 1,190 $ 1,597 $ 2,787
2005 ............... 1,303 1,699 3,002
2006 ............... 1,404 1,814 3,218
2007 ............... 1,513 1,929 3,442
2008 ............... 1,609 2,059 3,668
Thereafter ......... 106,135 77,278 (1) 183,413
--------- ----------- ---------
Total ............. $ 113,154 $ 86,376 $ 199,530
--------- ----------- ---------

- ----------

(1) Includes maturity of the $17.3 million Cullen Oaks construction loan, which
we intend to refinance at or prior to maturity, and the Coyote Village
construction loan, which was repaid in April 2004 by Weatherford College
upon our transfer of the ground lease to them.

The weighted average annual interest rate on our total long-term indebtedness
is approximately 7.2%, representing a weighted average annual interest rate of
7.4% on our off-campus property indebtedness and 6.5% on the indebtedness
encumbering our on-campus participating properties. Following this Offering,
all of our outstanding indebtedness will be fixed rate except for the Cullen
Oaks construction

loan, which has an outstanding balance of $17.3 million and bears interest at
the lender's prime rate or LIBOR plus 1.9%, at our election. We have in place
an interest rate swap agreement which effectively fixes the interest rate on
the outstanding balance of the Cullen Oaks indebtedness at 5.5% through
maturity in 2008. After completion of this Offering and the formation
transactions, and the contemplated $5.7 million borrowings under our credit
facility to finance the purchase of Titan's minority interest in the American
Campus - Titan Properties, and based upon the Offering price of our shares, our
ratio of debt to total market capitalization will be approximately %
( % if the underwriters' over-allotment option is exercised in full), but
only % ( % if the underwriters' over-allotment option is exercised in
full) if we exclude from this calculation the $78.2 million of indebtedness on
our on-campus participating properties. For further information concerning our
long-term indebtedness, see "Business and Properties -- Indebtedness."

OFF-BALANCE SHEET ARRANGEMENTS
We do not have any off-balance sheet arrangements.

FUNDS FROM OPERATIONS

As defined by NAREIT, 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.
The following table presents a reconciliation of our funds from operations to
our net loss for the years ended December 31, 2003, 2002 and 2001 and to our
net income for the three months ended March 31, 2003 and 2004:

IN THOUSANDS
-------------------------------------------------------------------
THREE MONTHS
ENDED MARCH 31, YEARS ENDED DECEMBER 31,
--------------------- -------------------------------------------
2004 2003 2003 2002 2001
--------- --------- ----------- ------------- -------------

Net Income (Loss) .................................. $1,529 $1,347 $ (944) $ (2,139) $ (2,939)
Plus: Minority Interest In Income (Losses) ......... (21) 12 (16) (30) (110)
------ ------ ------- --------- ---------
Loss Before Minority Interest ...................... 1,508 1,359 (960) (2,169) (3,049)
Plus: Depreciation ................................. 2,277 2,251 8,937 8,233 6,807
------ ------ ------- --------- ---------
Funds From Operations .............................. $3,785 $3,610 $ 7,977 $ 6,064 $ 3,758
====== ====== ======= ========= =========

While our on-campus participating properties contributed $17 million to our
2003 revenues, under our participating ground leases, we and the participating
university systems each receive 50% of the properties' net cash available for
distribution after payment of operating expenses, debt service (which

includes significant amounts towards repayment of principal) and capital
expenditures. A substantial portion of these properties' cash flow is dedicated
to capital reserves required under the applicable property indebtedness and to
the amortization of such indebtedness. These amounts do not increase our
economic interest in these properties since our interest, including our right
to share in the net cash available for distribution from the properties,
terminates upon the amortization of their indebtedness. Our economic interest
in these properties is therefore limited to our interest in the net cash flow
and management fees from these properties. In the years ended December 31,
2003, December 31, 2002, December 31, 2001, our share of this amount was
approximately $0.6 million, $0.7 million and $0.6 million, respectively. We
also manage these properties and received management fees of approximately $0.8
million in each of those years. We are not contractually required to fund the
liquidity needs (if any) of these properties and do not have access to their
cash flow (except as indicated above) for any purpose other than these
properties' operations. Accordingly, when considering our funds from
operations, we believe that is appropriate to make the following adjustments to
reflect our share of these properties' net cash available for distribution and
the management fees that we receive rather than including in our calculation of
FFO these properties' full contribution to our gross revenues and expenses.

IN THOUSANDS
--------------------------------------------------------------------
THREE MONTHS
ENDED MARCH 31, YEARS ENDED DECEMBER 31,
------------------------- ----------------------------------------
2004 2003 2003 2002 2001
----------- ----------- ---------- ------------ ------------

Net Income (Loss) ..................................... $ 1,529 $ 1,347 $ (944) $(2,139) $(2,939)
Plus: Minority Interest In Income (Losses) ............ (21) 12 (16) (30) (110)
-------- -------- -------- ------- -------
Loss Before Minority Interest ......................... 1,508 1,359 (960) (2,169) (3,049)
Plus: Depreciation .................................... 2,277 2,251 8,937 8,233 6,807
-------- -------- -------- ------- -------
Funds From Operations ................................. 3,785 3,610 7,977 6,064 3,758
Elimination of operations of on-campus participating
properties:
Plus: Net (Income) Loss from on-campus
participating properties ........................... (1,285) (1,570) (187) (197 ) 192
Less: Depreciation from on-campus participating
properties ......................................... (854) (798) (3,270) (3,158) (2,683 )
-------- -------- -------- ------- ----------
Funds From Operations Excluding Participating
Properties ........................................... 1,646 1,242 4,520 2,709 1,267
Adjustments to reflect economic impact of on-campus
participating properties:
Our Share of Net Cash Flow (*) ....................... 175 15 584 664 632
Management Fees ...................................... 172 171 809 796 806
-------- -------- -------- ------- -------
Cash From Participating Properties .................... 347 186 1,393 1,460 1,438
-------- -------- -------- ------- -------
Funds from Operations - Adjusted for Impact of
Cash from On-Campus Participating Properties ......... $ 1,993 $ 1,428 $ 5,913 $ 4,169 $ 2,705
======== ======== ======== ======= =======

- ----------------
(*) 50% of the properties' net cash available for distribution after payment of
operating expenses, debt service (including repayment of principal) and
capital expenditures. Schedule reflects actual cash received in years
2003, 2002 and 2001, and the amounts accrued for the 50% lessor
distribution in the three months ended March 31, 2004 and 2003.

INFLATION

Our leases do not typically provide for rent escalations. However, they
typically do not have terms that extend beyond 12 months. Accordingly, although
on a short term basis we would be required to bear the impact of rising costs
resulting from inflation, we have the opportunity to raise rental rates at
least annually to offset such rising costs. However, a weak economic
environment or declining student enrollment at our principal universities may
limit our ability to raise rental rates.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our future income, cash flows and fair values relevant to financial instruments
are dependent upon prevailing market interest rates. Market risk refers to the
risk of loss from adverse changes in market prices and interest rates. The fair
value of our fixed rate debt is impacted by changes in interest rates, as

an example, a 1% increase in interest rates would cause a $12.1 million decline
in the fair value of our fixed rate debt. Conversely, a 1% decrease in interest
rates would cause a $14.2 million increase in the fair value of our fixed rate
debt. Due to the structure of our floating rate debt and interest rate
protection instruments the impact of a 1% increase or decrease in interest
rates on our cash flows would not be significant. Following this Offering, all
of our outstanding indebtedness will be fixed rate except for the Cullen Oaks
construction loan, which has an outstanding balance of $17.2 million and bears
interest at the lender's prime rate or LIBOR plus 1.9%, at our election. We
have in place an interest rate swap agreement which effectively fixes the
interest rate on the outstanding balance of the Cullen Oaks indebtedness at
5.5% through maturity in 2008. We anticipate incurring additional variable rate
indebtedness in the future, including draws under our $ million revolving
credit facility. We may in the future use derivative financial instruments to
manage, or hedge, interest rate risks related to such variable rate borrowings.
We do not, and do not expect to, use derivatives for trading or speculative
purposes, and we expect to enter into contracts only with major financial
institutions.

NEW ACCOUNTING STANDARDS AND ACCOUNTING CHANGES

In November 2002, the FASB issued Interpretation No. 45, "Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Guarantees of
Indebtedness of Others," an interpretation of FASB Statements No. 5, 57 and 107
and rescission of FASB Interpretation No. 34. This interpretation outlines
disclosure requirements in a guarantor's financial statements relating to any
obligations under guarantees for which it may have potential risk or liability,
as well as clarifies a guarantor's requirement to recognize a liability for the
fair value, at the inception of the guarantee, of an obligation under that
guarantee. The initial recognition and measurement provisions of this
interpretation are effective for guarantees issued or modified after December
31, 2002 and the disclosure requirements are effective for financial statements
of interim or annual periods ending after December 15, 2002. As of December 31,
2003, the effect of adoption of FIN 45 on our financial statements was
immaterial.

In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated
with Exit or Disposal Activities". The standard requires the recognition of
costs associated with exit or disposal activities when they are incurred rather
than at the date of a commitment to an exit or disposal plan. This statement is
effective for exit or disposal activities initiated after December 31, 2002.
This statement did not have a significant impact on our financial statements.

In January 2003, the FASB issued FASB Interpretation No. 46, "Consolidation of
Variable Interest Entities," an interpretation of Accounting Research Bulletin
No. 51, "Consolidated Financial Statements" (FIN 46). This interpretation
requires an existing unconsolidated variable interest entity to be consolidated
by its primary beneficiary if the entity does not effectively disperse risk
among all parties involved or if other parties do not have significant capital
to finance activities without subordinated financial support from the primary
beneficiary. The primary beneficiary is the party that absorbs a majority of
the entity's expected losses, receives a majority of its expected residual
returns, or both as a result of holding variable interests, which are the
ownership, contractual, or other interests in an entity. FASB Interpretation
No. 46 was revised in December 2003 (FIN 46(R)) and effectively replaces FIN
46. While retaining a majority of the provisions and concepts of FIN 46, FIN
46(R) provides additional scope exceptions and clarifies the description of
variable interests. Public companies are required to apply FIN 46(R) no later
than the end of the first reporting period that ends after March 15, 2004.
However, prior to the required application of FIN 46(R), public companies are
required to apply either FIN 46 or FIN 46(R) to any interests in special
purpose entities (SPEs) as of the first interim or annual period ending after
December 15, 2003 and the decision to apply FIN 46 or FIN 46(R) may be made on
an SPE by SPE basis. This interpretation had no impact on our financial
statements.

In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133 on
Derivative Instruments and Hedging." SFAS No. 149 amends and clarifies
financial accounting and reporting for derivative instruments, including
certain derivative instruments embedded in other contracts and for hedging
activities under SFAS No. 133. The provisions of SFAS No. 149 are effective for
contracts entered in after June 30, 2003. Our adoption of SFAS No. 149 did not
have a material effect on our results of operations or our financial
statements.

INDUSTRY OUTLOOK

Following are excerpts from a market study that we commissioned from the Rosen
Consulting Group, LLC, a copy of which is included as an exhibit to the
registration statement of which this prospectus is a part. Founded in 1990,
Rosen Consulting Group is a California-based real estate and regional economics
research and consulting firm. The firm provides expert viewpoints and forecasts
on the economy, the capital markets, and the real estate markets for banks,
insurance companies and real estate investors. The firm also publishes the
quarterly Rosen Report, which provides comprehensive proprietary forecasts and
interpretive analysis of key national and regional economic, demographic and
real estate market conditions. Certain statistical information included in this
report has been licensed by us from Peterson's, a part of the Thomson
Corporation, based in Lawrenceville, New Jersey. Peterson's publishes and
distributes information for consumers about colleges and universities, career
schools, graduate programs, distance learning, executive training, private
secondary schools, summer opportunities, study abroad, financial aid, test
preparation, and career exploration. See "Where You Can Find More Information."

PRIVATIZED STUDENT HOUSING OUTLOOK: HIGHLIGHTS

WE BELIEVE THERE WILL BE A SURGE IN COLLEGE ENROLLMENT IN THE UNITED STATES,
FUELING DEMAND FOR STUDENT HOUSING. MARKETS IN WHICH THE COMPANY IS CURRENTLY
OPERATING WILL EXPERIENCE AMONG THE LARGEST INCREASES IN ENROLLMENT, LARGELY AS
A RESULT OF FAVORABLE DEMOGRAPHIC TRENDS.

The major catalyst for enrollment increases and subsequently student housing
demand in the coming decade, will be the growth in the college aged population
represented by the "Echo Boom" and the increase in the percentage of graduating
high school students attending college.

The "Echo Boom" generation are the children of the Baby Boomers who represent a
demographic group as large as the Baby Boom generation that was born between
1946 and 1964. While the Baby Boom generation is nearing retirement, much of
the Echo Boom generation, which was born between 1977 and 1997, is entering or
has yet to enter adulthood. In 2003, four million Americans turned 18; by 2010,
that number will peak at 4.4 million and remain above four million annually
through 2020.

[GRAPHIC OMITTED]

Additionally, the percentage of high school graduates attending college has
been increasing. According to the 2002 report of the Census Bureau, the share
of high school graduates choosing to attend college increased from 45% in 1997
to 65% in 2002. As such, the pool of future college students has been expanding
and is poised to increase to record numbers in the coming decade.

During 2003, an estimated 16.4 million students were enrolled in colleges and
universities, representing an increase of 14.6% from ten years earlier and
adding 2.1 million more students to the college rolls. The Department of
Education projects that nationally, enrollments will climb to 18.2 million
students by 2013 for an increase of 1.8 million from 2003.

[GRAPHIC OMITTED]

The impact of demographic changes on college enrollment levels will not be felt
equally across all states. During the past decade, the fastest growth of
post-secondary enrollment has primarily been concentrated in the Mountain
States and the Sunbelt (Southeast and Southwest). The Sunbelt, the Pacific and
the Northeast are projected to be the fastest growing regions in college
enrollment between 2000 and 2010, fueled by above average growth projections in
the young adult population in these regions.

[GRAPHIC OMITTED]

Among individual states, California, Texas, New York and Florida are projected
to have the four largest populations of 18 to 24 year olds during the next
decade, according to the U.S. Census Bureau. The fact that these states are
major immigration gateways will also bolster future demographic and
accompanying college enrollment growth. These four states are forecasted to
experience the greatest absolute upsurge in college enrollment. Rounding out
the top ten states with the highest absolute enrollment growth projections are
Massachusetts, North Carolina, Virginia, Arizona, Illinois, and Georgia. Most
of the student housing properties currently owned by the Company are located in
these "top ten" states. Pennsylvania and Colorado, the only states that are not
in the top ten in which the Company currently owns student housing properties,
are still expected to have a high rate of natural increase in the 18 to 24 age
group and are ranked in the top twenty in projected college enrollment.

[GRAPHIC OMITTED]

The following tables provide information with respect to the states projected
to experience the most significant changes in population growth and growth in
higher education enrollment between 2000-2010. The states in which American
Campus Communities currently owns student housing properties are indicated in
bold face type:

POPULATION GROWTH PROJECTIONS
(AGE 18-24)

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 AVG. 70,067 14.8%

Source: US Census Bureau

ENROLLMENT GROWTH PROJECTIONS

CHANGE % CHANGE
RANK STATE (2001-2010) (2001-2010)
- ------ ---------------------- ------------- ------------

1 CALIFORNIA 783,020 34.0%
2 New York 174,633 16.6%
3 TEXAS 161,494 15.3%
4 FLORIDA 131,348 18.2%
5 Massachusetts 93,166 21.6%
6 North Carolina 62,817 15.3%
7 VIRGINIA 61,833 16.0%
8 ARIZONA 57,206 16.2%
9 Illinois 50,144 6.7%
10 GEORGIA 48,951 13.9%
11 Maryland 47,497 17.1%
12 New Jersey 46,459 13.8%
13 PENNSYLVANIA 39,318 6.4%
14 Washington 34,192 10.5%
15 Connecticut 27,816 17.1%
16 District of Columbia 27,301 35.9%
17 South Carolina 22,713 12.2%
18 COLORADO 22,707 8.4%
19 Tennessee 21,319 8.0%
20 Michigan 17,749 3.1%
NATIONAL AVG. 40,334 13.3%

Note: Bolding indicates campuses whose students are served by properties
currently owned or managed by American Campus Communities.

Source: U.S. Census Bureau

The states in which American Campus Communities currently owns properties are
projected to experience an average 14.7% growth in the population aged 18-24
(an average of 217,634 persons) and 13.4% growth in enrollment (an average of
112,809 persons) between 2001 and 2010.

Several emerging trends will also influence enrollment and demand for student
housing in the longer term. Among other things, an increasing number of college
students will, in the future, be full-time students. Students attending college
full-time are more likely to relocate locally, further increasing the demand
for student housing. On the other hand, potential changes in immigration laws
related to national security may adversely impact the growth in foreign student
enrollment, indirectly impacting student housing.

ON THE SUPPLY SIDE, UNIVERSITIES ARE FACING BUDGET SHORTFALLS THAT WE BELIEVE
ARE EXPECTED TO AFFECT THEIR ABILITY TO BUILD NEW HOUSING TO ACCOMMODATE THE
PROJECTED SURGE IN ENROLLMENT.

According to data provided by Peterson's, when analyzing the on-campus housing
capacity of each state's largest public 4-year institutions, only 12 of the 50
had the capacity to accommodate more than 30% of their total enrollment in 2003
(see the following chart). The average on-campus capacity for these 50
institutions was only 23%. Therefore, nearly 80% of the students attending
these institutions had to rely upon alternatives to university-provided
housing. With enrollment set to rise, the number of students who must rely upon
off-campus housing alternatives will increase unless the subject universities
develop additional housing capacity.

UNIVERSITY ON-CAMPUS HOUSING CAPACITY

AMERICAN CAMPUS TOTAL TOTAL
COMMUNITIES' PRIMARY ENROLLMENT ENROLLMENT FALL
UNIVERSITIES SERVED: STATE FALL 03 02
- ------------------------------ -------------- ------------ -----------------

Cal State University,
Fresno ...................... California 21,209 20,007
Cal State University, San
Bernardino .................. California 16,341 15,985
Texas A&M International
University .................. Texas 3,753 3,373
The University of Central
Florida ..................... Florida 38,598 35,927
The University of Houston Texas 34,443 33,007
Arizona State University
Main Campus ................. Arizona 47,359 45,693
Temple University ............ Pennsylvania 32,351 29,872
The University of Georgia
- Athens .................... Georgia 32,941 32,317
The University of
Colorado at Boulder ......... Colorado 30,983 26,609
Texas A&M University ......... Texas 45,083 44,618
Virginia Polytechnic
Institute and State
University .................. Virginia 27,662 26,490
Prairie View A&M
University .................. Texas 7,255 6,747

AMERICAN CAMPUS UNDERGRAD UNDERGRAD BEDS:
COMMUNITIES' PRIMARY ENROLLMENT ENROLLMENT ON-CAMPUS % TOTAL
UNIVERSITIES SERVED: FALL 03 FALL 02 BEDS ENROLLMENT
- ------------------------------ ------------ ------------ ------------------ -----------

Cal State University,
Fresno ...................... 17,309 16,086 1,035 4.9%
Cal State University, San
Bernardino .................. 11,256 11,019 1,012 6.2%
Texas A&M International
University .................. 2,933 2,609 250 (1) 6.7%
The University of Central
Florida ..................... 32,044 30,036 3,750 9.7%
The University of Houston 26,283 25,230 4,124*(1) 12.0%
Arizona State University
Main Campus ................. 36,802 35,191 5,600 11.8%
Temple University ............ 21,429 19,606 4,429 13.7%
The University of Georgia
- Athens .................... 24,983 24,395 5,817 17.7%
The University of
Colorado at Boulder ......... 25,158 23,998 7,100 22.9%
Texas A&M University ......... 36,775 36,603 10,413 23.1%
Virginia Polytechnic
Institute and State
University .................. 21,468 21,869 8,900 32.2%
Prairie View A&M
University .................. 5,754 5,387 3,390* (1) 46.7%

Source: Peterson's (Rosen is the source of the data contained in the On-Campus
Beds column with a "*")

- ----------------
(1) Includes on-campus properties owned in partnership with American Campus
Communities.

UNIVERSITY ON-CAMPUS HOUSING CAPACITY

TOTAL UNDERGRAD ON- BEDS: %
LARGEST FOUR-YEAR UNIVERSITY IN EACH ENROLLMENT ENROLLMENT CAMPUS TOTAL
OF THE 50 STATES: STATE FALL 03 FALL 03 BEDS ENROLLMENT
- ----------------------------------------------------- --------------- ------------ ------------ ----------- -----------

Boise State University .............................. Idaho 17,637 15,826 850 4.8%
University of Alaska Anchorage ...................... Alaska 15,843 15,091 954* 6.0%
University of Nevada, Las Vegas ..................... Nevada 24,679 19,761 1,500 6.1%
Portland State University ........................... Oregon 21,841 15,808 1,560 7.1%
University of New Mexico ............................ New Mexico 24,593 17,166 2,362* 9.6%
ARIZONA STATE UNIVERSITY ............................ ARIZONA 47,359 36,802 5,600* 11.8%
The University of Texas at Austin ................... Texas 52,261 39,661 6,613 12.7%
University of Washington ............................ Washington 39,246 28,362 5,000 12.7%
University of Minnesota, Twin Cities Campus ......... Minnesota 48,677 32,457 6,271* 12.9%
University of Southern Maine ........................ Maine 11,382 9,017 1,569 13.8%
Auburn University ................................... Alabama 23,276 19,603 3,339* 14.3%
University of Maryland, College Park ................ Maryland 57,169 57,169 8,714* 15.2%
West Virginia University ............................ West Virginia 23,492 16,692 3,600 15.3%
University of Florida ............................... Florida 47,373 34,031 7,551 15.9%
University of Hawaii at Manoa ....................... Hawaii 18,696 12,820 2,986 16.0%
UNIVERSITY OF GEORGIA ............................... GEORGIA 32,941 24,983 5,817 17.7%
University of Oklahoma .............................. Oklahoma 23,799 19,570 4,282 18.0%
The Ohio State University ........................... Ohio 49,676 36,855 9,175* 18.5%
The University of Iowa .............................. Iowa 29,697 20,487 5,600 18.9%
University of California, Los Angeles ............... California 37,599 24,899 7,159 19.0%
University of Kansas ................................ Kansas 28,196 20,605 5,452* 19.3%
University of Kentucky .............................. Kentucky 25,741 17,878 5,109* 19.8%
Brigham Young University ............................ Utah 32,408 29,379 6,488* 20.0%
University of Arkansas .............................. Arkansas 15,995 12,889 3,245 20.3%
University of Wyoming ............................... Wyoming 12,745 9,250 2,795 21.9%

TOTAL UNDERGRAD ON- BEDS: %
LARGEST FOUR-YEAR UNIVERSITY IN EACH ENROLLMENT ENROLLMENT CAMPUS TOTAL
OF THE 50 STATES: STATE FALL 03 FALL 03 BEDS ENROLLMENT
- ------------------------------------------------------------- ---------------- ------------ ------------ ----------- -----------

North Carolina State University ............................. North Carolina 29,940 22,780 6,700 22.4%
UNIVERSITY OF COLORADO AT BOULDER ........................... Colorado 30,983 25,158 7,100 22.9%
Louisiana State University and Agricultural and
Mechanical College ......................................... Louisiana 32,228 26,660 7,599 23.6%
Mississippi State University ................................ Mississippi 16,610 13,373 4,000 24.1%
University of Nebraska-Lincoln .............................. Nebraska 22,988 18,118 5,568 24.2%
University of Rhode Island .................................. Rhode Island 15,929 15,929 3,900* 24.5%
University of Wisconsin-Madison ............................. Wisconsin 41,515 29,708 10,565* 25.4%
University of North Dakota .................................. North Dakota 12,423 10,277 3,192 25.7%
The University of Tennessee ................................. Tennessee 27,971 19,956 7,337 26.2%
University of Illinois at Urbana-Champaign .................. Illinois 39,999 28,947 10,855 27.1%
University of South Carolina ................................ South Carolina 25,140 16,567 6,825 27.1%
The Pennsylvania State University University Park
Campus ..................................................... Pennsylvania 41,445 34,829 11,757 28.4%
New York University ......................................... New York 38,096 19,490 10,961 28.8%
VIRGINIA POLYTECHNIC INSTITUTE AND STATE UNIVERSITY ......... VIRGINIA 27,662 21,468 8,900 32.2%
Indiana University Bloomington .............................. Indiana 38,903 30,752 12,869* 33.1%
South Dakota State University ............................... South Dakota 9,952 8,445 3,400 34.2%
University of Delaware ...................................... Delaware 20,676 17,486 7,072 34.2%
The University of Montana-Missoula .......................... Montana 13,026 11,152 4,500 34.5%
Boston University ........................................... Massachusetts 28,982 17,860 10,775 37.2%
Michigan State University ................................... Michigan 44,937 35,197 17,000 37.8%
Rutgers, The State University of New Jersey, New
Brunswick .................................................. New Jersey 35,886 28,070 13,851* 38.6%
University of New Hampshire ................................. New Hampshire 14,248 11,496 5,500 38.6%
University of Vermont ....................................... Vermont 10,314 8,792 3,977 38.6%
University of Missouri-Columbia ............................. Missouri 26,124 19,698 10,160 38.9%
University of Connecticut ................................... Connecticut 21,427 14,716 11,321* 52.8%

Note: Bolding indicates campuses whose students are served by properties
currently owned or managed by American Campus Communities.

Source: Peterson's (Rosen is the source of the data contained in the On-Campus
Beds column with a "*")

- ----------------
(1) Includes on-campus properties owned in partnership with American Campus
Communities.

However, budget deficits for many states are the worst they have been at any
time in the last 50 years, limiting states' ability to increase funding for
education. This is the first time in U.S. history that states have had to face
enrollment increases at a time of economic decline. State appropriations for
higher education have decreased for a second consecutive year. Except for
Florida, each of the states in which the Company currently owns student housing
properties has experienced a decline in state appropriations for higher
education during the past two years. The ability of each state to boost
postsecondary education spending, while simultaneously handling the strain on
health care budgets from a rapidly aging population and restoring funding cuts
to primary and secondary education, remains to be seen. Traditionally, both
health care and primary education have taken precedence over higher education
for political reasons and there is unlikely to be enough money to fund all
programs completely.

As a result, public university finances are worsening and threatening their
capacity to fund significant capital projects such as student housing. A recent
survey by the Common Fund for Nonprofit Organizations found that approximately
1,260 colleges and universities in the United States plan to make
across-the-board cuts in all academic programs. The same number plans to trim
building and maintenance expenditures, which includes new construction
projects. Maintenance spending has absorbed the majority of facilities-related
budget cuts, though many new construction projects are also being postponed.

The impact of these spending cuts on new student housing construction has been
muted so far. According to estimates by the U.S. Census Bureau, university
spending on student dormitories actually increased nearly 20% in 2003. However,
as this figure measures the value of construction

put-in-place, it includes the value of projects that were initiated several
years ago under a more favorable funding environment as well as spending on
renovating and replacing existing facilities that are aging (see below).
Moreover, student housing expenditures will have to grow significantly in
future years to meet the forecasted surge in postsecondary enrollment over the
next ten years. A 2003 survey of 118 four-year institutions by College &
Planning Management found that an estimated 29,000 new beds will be built over
the next five years. Projecting nationally from that sample size, it is
estimated that approximately 291,000 new beds will be constructed through 2008.
In contrast, college enrollment is expected to increase by 1,031,000 new
students over the same period, creating a shortfall of more than 700,000 beds.
As a result, growth in state allocations for higher education will need to
outpace the increases of the previous decade just to maintain the current
public services already in place. It is also questionable whether public
universities will be able to allocate increasing percentages of a shrinking
state education budget to student housing rather than to other educational
facilities and operations.

PUTTING FURTHER PRESSURE ON UNIVERSITIES' ABILITY TO PROVIDE LIVING
ACCOMMODATIONS, THE EXISTING TRADITIONAL DORMITORY-STYLE FACILITIES ARE
BECOMING OBSOLETE AND ARE IN NEED OF RENOVATION OR REPLACEMENT.

As Baby Boomers entered college in the 1960s, universities quickly built
student housing complexes to accommodate the large influx of incoming students.
This stock of student housing is aging and is increasingly in need of major
renovations or replacement. Based on a survey conducted by Rosen, the average
age of student housing facilities at 20 of the largest institutions in country
is over 36 years old, with a low of over 10 years old (University of Central
Florida and Florida International University) and high of over 54 years old
(University of Michigan) (see chart below). Therefore in addition to the need
for additional housing to accommodate an expanding student population,
universities must also deal with the problems of maintaining, refurbishing and
marketing their aging existing inventory. Many schools have undertaken
large-scale renovations and others are under pressure to follow suit to stay
competitive. In addition to significant cosmetic upgrades, outdated heating and
plumbing systems as well as roofs and windows are being replaced in many
on-campus housing facilities. In some cases institutions are finding that the
costs of renovations are often prohibitive and are opting to take existing
facilities out of service.

This previous building expansion in response to the Baby Boom has also left
many colleges and universities with high-density living accommodations that are
outmoded for today's Echo Boom students. What used to be considered rare
luxuries, such as kitchens, private bedrooms and bathrooms, Internet
connectivity and cable television systems, are now more common and increasingly
becoming a factor in a student's housing and university selection. A survey of
20 of the largest universities in the country revealed that private bedrooms
accounted for only 23% of total on-campus capacity. Furthermore, only 33% of
students living in on-campus facilities had a bathroom shared with four people
or less, and only 17% had a kitchen in their accommodation (see chart below).
Student housing that includes such amenities is also more expensive to build.
According to a survey by the American School and University's magazine, the
cost per square foot to construct a new residence hall has nearly doubled over
the past ten years, from $82 in 1993 to $150 in 2002.

% ON-CAMPUS
AVERAGE % ON-CAMPUS BEDS WITH
TOTAL YEAR BUILT: AVERAGE BEDS WITH A A SEMI- % ON-CAMPUS
ENROLLMENT ON-CAMPUS BUILDING PRIVATE PRIVATE BEDS WITH A
UNIVERSITY FALL 2003 HOUSING AGE BEDROOM BATHROOM* KITCHEN
- --------------------------------------------- ------------ ------------- ---------- ------------- ------------ ------------

University of Texas ......................... 52,261 1966 37.6 16% 29% 22%
Ohio State University ....................... 49,676 1961 42.9 17% 32% 9%
University of Minnesota ..................... 48,677 1961 42.6 30% 20% 15%
University of Florida ....................... 47,373 1962 41.6 24% 37% 23%
Arizona State ............................... 47,359 1965 38.6 4% 18% 12%
University of Wisconsin ..................... 41,515 1953 51.5 45% 40% 40%
University of Washington .................... 39,246 1962 41.6 17% 10% 10%
University of Michigan ...................... 38,972 1949 54.7 36% 10% 0%
University of South Florida ................. 38,854 1986 17.8 39% 42% 37%
University of Central Florida ............... 38,598 1994 10.3 42% 100% 40%
Purdue University ........................... 38,546 1960 44.4 19% 30% 23%
University of California, Los Angeles ....... 37,599 1977 27.2 0% 48% 10%
University of Arizona ....................... 36,847 1966 38.4 2% 19% 0%
Florida State University .................... 36,210 1988 16.4 5% 14% 5%
California State University, Long Beach ..... 34,566 1975 28.8 2% 0% 0%
University of Houston ....................... 34,443 1969 34.5 34% 60% 20%
San Diego State University .................. 34,304 1978 26.2 15% 28% 10%
Florida International University ............ 33,451 1994 10.3 81% 81% 81%
University of California, Berkeley .......... 33,145 1961 42.9 6% 25% 5%
University of Georgia ....................... 32,941 1969 34.9 16% 25% 16%
AVERAGE** 1967 36.5 23% 33% 17%

- ----------------
Source: Rosen

* includes bathrooms located in suites with up to four students per bathroom

** average is weighted by number of beds

UNIVERSITIES ARE TURNING TO PRIVATE SECTOR DEVELOPERS TO BRIDGE THE GAP BETWEEN
DEMAND FOR ON AND OFF-CAMPUS STUDENT HOUSING AND THEIR ABILITY TO PROVIDE IT
FROM THEIR OWN CAPITAL RESOURCES.

To bridge the gap between demand for student housing and the increasing
difficulty in providing it, public universities have increasingly looked to the
private sector to either develop off-campus housing or to form partnerships to
build and renovate on campus housing. This has allowed the public universities
to reduce their capital outlays and administrative costs dedicated to housing
as well as preserve limited debt capacity for other uses. Private developers
are seeing opportunities to fulfill unmet demand in this niche market and are
building fully private off-campus apartment complexes catering specifically to
students. A small number of mid-size developers specializing in student housing
have been successfully building and managing student apartments off-campus for
more than a decade, while larger traditional multi-family developers have
recently begun to show interest in the market.

According to a survey conducted in 2003, between 1995 and 2004, $4.5 billion
worth of private student housing projects were scheduled to be delivered to the
market, for a total of 281 projects. Approximately 70% of these projects were
on-campus dormitories, with the remaining 30% being off-campus developments. In
total, the survey includes 141,500 beds that have been developed by the private
sector.

Several state systems are participating in this trend towards student housing
privatization, including Texas, Arizona, Florida, Nebraska, North Carolina,
Oklahoma, and Tennessee. As college enrollment increases and students demand
more and more out of their residences, the trend toward private sector
development of student housing is expected to continue and spread to more
cities with large student populations.

THERE IS A HIGHLY FRAGMENTED OWNERSHIP OF STUDENT HOUSING PROPERTIES IN WHICH
THE TOTAL SIZE OF THE PRIVATE SECTOR PALES IN COMPARISON TO THE SIZE OF THE
NATIONAL DEMAND IN THE MARKET. NONE OF THE TOP PRIVATE STUDENT HOUSING
OWNER-OPERATORS MANAGES MORE THAN 25,000 BEDS.

The student housing market is highly fragmented and so far consolidation in the
industry has been limited. According to data provided by Peterson's, there are
more than 16 million students enrolled at post secondary institutions as of
2003. By comparison, each of the top 8 firms in the student housing

market manages only 10,000 to 25,000 beds in both on-campus and off-campus
properties. The total of all beds owned and/or managed by these firms
represents less than 2% of the total demand for student housing. There are less
than 10 firms, including American Campus Communities, that own a multi-regional
network of properties and are able to offer an integrated range of specialized
student housing services, including design, construction and financing.

None of the specialized student housing firms dominate a particular region.
Instead, they each seek to maintain a presence in multiple markets with large
student populations. Most are therefore active in the same markets,
particularly Texas, California, Florida, Georgia, North Carolina, Arizona and
Pennsylvania, due primarily to the presence of large state university systems
that allow developers to take advantage of economies of scale. In contrast, the
Pacific Northwest and Northeast are two regions in which small, local
owner-operators have significant market share.

Although a number of major multi-family developers are known to be considering
entering the student housing market, none has yet done so in a meaningful way,
perhaps due to the specialized nature of the segment which sets it apart from
traditional multi-family housing operations.

THE STUDENT HOUSING BUSINESS

The student housing business is a specialized real estate segment with certain
unique operational, marketing and leasing characteristics. It services three
distinct customer groups: students, parents and the educational institution
that the students attend.

Students. The expectations and demands of college students regarding the
amenities and other attributes of student housing have increased over time.
Traditional multiple occupancy dormitory rooms with group baths are often
viewed today by many students as unacceptable. Instead, many students seek
accommodations with private bedrooms and private or semi-private bathrooms,
independent cooking facilities and technological capabilities. In addition, our
properties' amenities offer students opportunities for recreational and social
interaction with peers. Traditionally, many on-campus facilities have not met
these consumer needs.

Parents. While parents are typically receptive to accommodating their child's
desire for modern housing, privacy and appropriate amenities, their primary
concern is to ensure that their child is housed in an academically-oriented
environment that is conducive to achieving academic success. Management
supervision and a safe environment are of primary value to parents. On-campus
student housing has therefore been the preferred choice of many parents,
particularly for incoming freshmen. Our specialized student housing management
and classic Resident Assistant program provide parents with a comfort level
that they typically do not have with privately owned off-campus student
communities.

Universities and Colleges. Most universities are able to house only a small
percentage of their overall enrollment, and are, therefore, highly dependant
upon the off-campus market to provide housing for their students. High quality,
well run off-campus student housing can be a critical component to an
institution's ability to attract and retain students. Accordingly, we view the
university or college as a partner rather than as a competitor. Developing and
maintaining a good relationship with an educational institution can result in a
privately-owned off-campus facility becoming, in effect, an informal extension
of the institution's housing program, with the institution providing highly
valued references and recommendations to students and parents.

Our success has in large part resulted from our proven ability to balance our
products and services to meet these varying needs and concerns of students,
parents and educational institutions. We provide high quality student
accommodations that feature private or semi-private bedrooms and baths,
extensive recreational and social amenities and the opportunity for the active
lifestyle most students are seeking. At the same time, we seek to establish an
academic environment that gives parents peace of mind. In addition, we believe
educational institutions view us as a premier student housing manager who
successfully implements an effective residence life and student development
program at each of its communities in a manner consistent with each
institution's own standards and student development objectives. Indeed, a
growing number of top educational institutions are calling upon us to provide
development, management and leasing services to their own on-campus facilities.

TYPES OF STUDENT HOUSING

There are two major types of student housing properties: on-campus and
off-campus. The most significant differences between them are governance,
ownership and location. On-campus student housing is provided under the
guidance and regulations of an educational institution, is typically owned by
the institution and is located near or adjacent to the classroom buildings and
other campus facilities. Off-campus housing is located in proximity to the
school campus, generally within walking or bicycling distance and is typically
owned by private owner-operators. Off-campus housing facilities tend to offer
more relaxed rules and regulations and therefore are more appealing to
upper-classmen. For example, off-campus facilities do not have stringent
guidelines governing student behavior such as quiet hours or gender visitation
limitations.

On Campus Student Housing. Traditionally, on-campus housing was owned and
operated by colleges and universities. As described earlier in "Industry
Outlook -- Privatized Student Housing Outlook: Highlights," there has been a
growing trend to "privatize" on-campus housing. We believe this trend will
create significant business opportunities for us. We believe that we are
recognized as a premier

developer and manager of student housing, and have therefore been able to forge
strong and, in some cases, unique relationships with leading educational
institutions. As part of our development services, we have been able to assist
colleges and universities through a variety of creative structures in accessing
alternative capital to fund their housing development needs. We believe we have
gained a reputation with colleges and universities for completing our projects
on-time and within budget. Since our founding in 1993, we have completed 100%
of our on-campus development projects prior to the start of the targeted school
year. We are also generally retained to manage the on-campus facilities we
develop. We only manage on-campus facilities where where we believe our
management services will provide us with opportunities for an expanding
relationship with the educational institution.

Our relationships with colleges and universities are fostered through close and
continuous working relationships with the appropriate institutional
authorities. Each year we have management committee meetings with college and
university officials to create budgets, analyze improvement needs and set
rental rates. Managing on-campus housing also requires a knowledge and
understanding of college and university rules and regulations. Each of our
staff members at each facility enforces these rules and regulations to ensure
that a comfortable and safe atmosphere is maintained.

Off-Campus Student Housing. We believe that it is of great benefit for an
off-campus student housing facility to be in close proximity to the campus and
to have sufficient access to the educational institution, such that student
residents and parents are able to view it as an attractive alternative to an
on-campus facility. Because many educational institutions give on-campus
housing priority to incoming freshmen, the student-tenant mix at off-campus
facilities tends to be comprised mostly of upper-classmen. Accordingly, at our
off-campus facilities, we seek to offer an environment that is more conducive
to older students, including rules and regulations that tend to be more relaxed
than those at on-campus facilities, but are consistent with maintaining an
educational and safe environment for our student-tenants.

We believe that the support of colleges and universities can be beneficial to
the success of our off-campus properties. We actively seek to have these
institutions recommend our off-campus facilities to their students or to
provide us with mailing lists so that we may directly market to students and
parents. In some cases, the institutions actually promote our off-campus
facilities in their recruiting and admissions literature. In cases where the
educational institutions do not offer recommendations for off-campus housing or
mailing lists, most nonetheless provide lists of suitable properties to their
students, and we continually work to ensure that our properties are on these
lists in each of the markets that we serve. Of our 12 off-campus properties,
nine are listed either in university publications provided to prospective
students and their parents or on the university website.

BUSINESS AND PROPERTIES

OVERVIEW

o are in close proximity to public universities;

o contain modern housing units featuring private bedroom accommodations,
private or semi-private bathrooms, in-unit washers and dryers, and
full kitchens with modern appliances;

o contain resort-style amenities featuring swimming pools, sand
volleyball, basketball, and/or tennis courts, and clubhouses which
typically include fitness centers, tanning beds, computer labs,
recreation/game rooms, and study rooms; and

o are supported by a classic Resident Assistant system and other
student-oriented programming and services that create a collegiate
environment.

o a surge in college enrollment in the United States, fueling a demand
for student housing;

o budget shortfalls at universities have reduced the availability of
capital resources for new student housing to accommodate the projected
surge in enrollment;

o the existing traditional dormitory-style facilities are becoming
obsolete and are in the need of renovation or replacement;

o the growing number of partnerships between universities and the
private sector developers to provide on and off-campus student
housing; and

o a highly fragmented ownership of student housing properties in which
the total size of the private sectors pales in comparison to the size
of the national demand in the market with no private student housing
owner-operator managing more than 25,000 beds.

OUR BUSINESS

We own and operate 12 off-campus student housing properties within close
proximity to nine primary colleges and universities in eight states, including
three properties under construction. Additionally, we participate with two
university systems in the ownership of four on-campus properties under long
term participating ground/facility leases; we refer to these properties as our
"on-campus participating properties." We are required to pay to the
participating universities 50% of the net cash flow from these on-campus
participating properties. We manage all 16 of our owned properties.

and the University of Colorado System. We have developed student housing
properties for these clients and often have been retained to manage and lease
these properties following their opening. Since 1996, we have developed and
secured financing for 23 third party student housing properties. The aggregate
development cost of these properties exceeds $525 million.

We also provide third party management and leasing services for 16 student
housing properties that represent approximately 10,500 beds in approximately
3,900 units. We developed 13 of these properties, including four of which are
currently under construction and in initial lease-up. Our third party
management and leasing services are typically provided pursuant to multi-year
management contracts that have an initial term that ranges from two to five
years. Together with our owned properties discussed above, we currently manage
32 student housing properties, representing approximately 22,300 beds.

Following is an overview of our Predecessor Entities' historic business:

NUMBER OF NUMBER
PROJECTS OF BEDS
----------- --------

PROPERTIES OWNED ................ 16 11,773
OFF-CAMPUS ...................... 12 7,606
Acquired ........................ 8 5,662
Developed ....................... 1 309
Under Construction .............. 3 1,635
ON-CAMPUS PARTICIPATING ......... 4 4,167
Developed ....................... 4 4,167

NUMBER OF NUMBER
PROJECTS OF BEDS
----------- --------

PROPERTIES DEVELOPED ......... 31 18,483
OWNED ........................ 8 6,111
Completed .................... 5 4,476
Under Construction ........... 3 1,635
THIRD PARTY .................. 23 12,372
Completed .................... 17 8,304
Under Construction ........... 6 4,068

NUMBER OF NUMBER
PROJECTS OF BEDS
----------- --------

PROPERTIES MANAGED ......... 32 22,281
OFF-CAMPUS ................. 16 11,152
Owned ...................... 12 7,606
Third Party ................ 4 3,546
ON-CAMPUS .................. 16 11,129
Participating .............. 4 4,167
Third Party ................ 12 6,962

We will elect to be taxed as a REIT for federal income tax purposes commencing
with our tax year ending December 31, 2004. In order to qualify as a REIT, our
third party services will generally be provided through our Services Company,
which is a wholly-owned subsidiary of our Operating Partnership. Our Services
Company will be a "taxable REIT subsidiary" under the Internal Revenue Code of
1986, as amended, and, therefore, the income earned by our Services Company
will be subject to federal income tax at regular corporate rates and state and
local income tax where applicable. See "Federal Income Tax Considerations --
Taxation of our Company."

Upon completion of the Offering, we will own 98.7% of the Units in our
Operating Partnership and we will serve as its sole general partner. Certain of
our officers will own Units in the Operating Partnership representing a 1.3%
profit interest.

Our Board of Directors will initially consist of eight directors, at least five
of whom are expected to be classified under applicable New York Stock Exchange
listing standards as "independent" directors.

HISTORY

We were formed to continue the student housing business of our Predecessor
Entities that had been engaged in the student housing business since 1993.
During our Predecessor Entities' first four years of operation, their core
business focused on providing development and management services to private
owners and public institutions of higher education. From 1993 to 1997 our
Predecessor Entities operated primarily as a third party provider of student
housing management and development services.

In May 1997, an indirect subsidiary of Reckson acquired a majority interest in
certain of our Predecessor Entities, which was subsequently contributed to RSVP.
In June 1998, FrontLine, RSVP's indirect parent, was spun off to the
shareholders of Reckson. Following the spin-off, Reckson became a principal
lender to FrontLine which used this financing, among other things, to fund
RSVP's investment activities.

From 1996 through 2002, our Predecessor Entities accumulated 14 properties
through acquisitions and development, principally through RAP, an entity
jointly owned by Reckson and RSVP. This included the acquisition of nine
student housing properties, during the 30 month period from May of 1999 to
November of 2001, eight of which are part of our current portfolio. Our
business was principally performed through American Campus Communities, L.L.C.,
a Delaware limited liability company, a subsidiary of RSVP, and through RAP
Student Housing Properties, L.L.C., a Delaware limited liability company and a
subsidiary of RAP. RAP and RSVP provided the equity capital necessary for us to
re-focus our Predecessor Entities' core business primarily on the ownership,
acquisition, development and management of owned student housing assets. Our
Predecessor Entities continued to provide third party development, management
and leasing services to facilitate their new primary objective of asset
ownership.

In mid-2001, FrontLine began to experience financial difficulties and
subsequently filed for protection under chapter 11 of the Bankruptcy Code. Since
that time the capital investment in our Predecessor Entities by RAP and RSVP has
been significantly reduced and, as a result, the acquisition program of our
Predecessor Entities was curtailed. Among our goals in this Offering is to
reinvigorate our program of growth by accessing new sources of investment
capital.

OUR PROPERTIES

We seek to own high quality, well designed and well located student housing
properties, through acquisitions or development in under-serviced markets that
have stable or increasing student populations and/or in which our reputation
and close relationship with the local universities can help us overcome high
barriers to entry or provide a competitive marketing advantage. We also target
properties that provide the opportunity for substantial economic growth as a
result of product superiority, location advantage, or our superior operational
capabilities.

The following table presents certain summary information about our properties.
Our properties are generally modern facilities, with 11 of our 16 properties
having been built less than six years ago and 14 of our properties having been
built less than 10 years ago. Amenities at most of our properties include a
swimming pool, basketball courts and a large community center featuring a
fitness center, computer center, recreation room with billiards and other
games, tanning beds and study areas. Some properties also have a jacuzzi/hot
tub, volleyball courts, tennis courts and washer/dryer in units. Callaway House
also has a food service facility. Three of our off-campus properties are
currently under construction and are scheduled to open in August 2004.

We own fee title to all of these properties except for:

o Callaway House (property #6), in which we own an 80% partnership
interest and are entitled to significant preferred distributions;

o University Village at TU (property #12), which is subject to a 75-year
ground lease from Temple University; and

o Four properties (properties #13, 14, 15 and 16) that are on-campus
participating properties held under participating ground/facility
leases with two university systems. See "Business and Properties --
Our Properties -- On-Campus Participating Properties."

DATE PRIMARY
YEAR ACQUIRED/ UNIVERSITY TERM OF
NAME BUILT DEVELOPED SERVED LEASE
- --------------------------------------- ------- ----------- -------------------- ----------

OFF-CAMPUS
PROPERTIES
1. Commons on Apache 1987 May-99 Arizona State 12 month
University Main
Campus
2. The Village at 1990/ Dec-00 Virginia 12 month
Blacksburg 98 Polytechnic
Institute and State
University
3. The Village on 1998 Dec-99 Arizona State 10 or 12
University University Main month
Campus
4. River Club Apartments 1996 Aug-99 The University of 12 month
Georgia - Athens
5. River Walk 1998 Aug-99 The University of 12 month
Townhomes Georgia - Athens
6. The Callaway 1999 Mar-01 Texas A&M 9 month
House (5) University
7. The Village at Alafaya 1999 Jul-00 The University of 12 month
Club Central Florida
8. The Village at Science 2000 Nov-01 The University of 12 month
Drive Central Florida
9. University Village at 2002 Aug-02 The University of 12 month
Boulder Creek (7) Colorado at
Boulder
10. University Village at 2004 Aug-04(8) California State 12 month
Fresno (8) University, Fresno
11. University Village at San 2004 Aug-04(8) California State 9 month
Bernardino (8) (10) University, San
Bernardino
12. University Village at TU (8)(12) 2004 Aug-04(8) Temple University 12 month
Subtotal of Off-Campus
Properties:
ON-CAMPUS PARTICIPATING
PROPERTIES (14)
13. University Village - 1996/ Aug-96- Prairie View A&M 9 month
PVAMU (15) 97/98 Aug-98 University
14. University Village - 1997 Aug-97 Texas A&M 9 month
TAMIU (15) International
University
15. University College - 2000/ Aug-00, Prairie View A&M 9 month
PVAMU (15) 03 Aug-03 University
16. Cullen Oaks (15) 2001 Aug-01 The University of 9 month
Houston
Subtotal of On-Campus
Participating Properties:
TOTALS:

TWELVE MONTHS
ENDED AVG.
MARCH 31, 2004 MONTHLY
REVENUE REVENUE/ OCCUPANCY # OF # OF # OF
NAME (IN THOUSANDS) BED(1) RATES (1) BLDGS UNITS BEDS
- --------------------------------------- ------------------ --------------- --------------- ------- ------- --------

OFF-CAMPUS
PROPERTIES
1. Commons on Apache $ 1,488 $ 344 95.9%(2) 6 111 444
2. The Village at 3,957 352 75.7 (3) 26 288 1,056
Blacksburg
3. The Village on 4,173 476 75.7 (4) 20 288 918
University
4. River Club Apartments 3,470 355 97.9 18 266 794
5. River Walk 1,410 347 94.7 20 100 340
Townhomes
6. The Callaway 4,682(6) N/A(6) 73.4 (6) 1 173 538
House (5)
7. The Village at Alafaya 4,955 482 98.9 20 228 840
Club
8. The Village at Science 4,434 484 98.1 17 192 732
Drive
9. University Village at 2,642 647 97.7 4 82 309
Boulder Creek (7)
10. University Village at N/A N/A N/A (9) 9 105 406
Fresno (8)
11. University Village at San N/A N/A N/A (11) 6 132 480
Bernardino (8) (10)
12. University Village at TU (8)(12) N/A N/A N/A (13) 3 220 749
----------- ------- ------- --- --- -----

Subtotal of Off-Campus $ 31,211 $ 427(17) 88.2% 150 2,185 7,606
Properties:
ON-CAMPUS PARTICIPATING
PROPERTIES (14)
13. University Village - $ 7,345 $ 392 95.6% 30 612 1,920
PVAMU (15)
14. University Village - 1,068 399 96.0 4 84 252
TAMIU (15)
15. University College - 5,569 392 94.9 14 756 1,470
PVAMU (15)
16. Cullen Oaks (15) 2,923 509 97.9 3 231 525
----------- --- ----- -----
Subtotal of On-Campus
Participating Properties: $ 16,905 $ 407 95.7% 51 1,683 4,167
----------- ---------- ------- --- ----- -----
$ 48,116(16) $ 418(17) 91.3% 201 3,868 11,773
============ ========== ======= === ===== ======

- ----------------

(1) Represents average monthly revenue per occupied bed calculated based upon
our net student rent (twelve months ended March 31, 2004 revenues less
non-rent income) divided by the average occupied beds (total number of beds
multiplied by the occupancy rate), then divided by average lease term.
Occupancy rates are calculated as of March 31, 2004 based on the number of
total occupied beds (including beds occupied by staff) divided by beds.

(2) Commons on Apache will be 100% leased for the 2004-05 academic year by
Arizona State University for a minimum one year rental of approximately
$1,660,000.

(3) As of June 4, 2004, we have received applications with refundable deposits
for the 2004-5 academic year for 98.6% and executed leases for 98.1% of
the 1,056 beds.

(4) As of June 4, 2004, we have received applications with refundable deposits
for the 2004-5 academic year for 75.6% and executed leases for 58.4% of
the 918 beds.

(5) Although we hold an 80% interest in the property, because of our preferred
distribution rights, we currently receive substantially all of the
property's net cash flow. See "Business and Properties -- Our Properties
-- The Callaway House Partnership" for a description of the terms of our
interest in the partnership that owns this property.

(6) As rent at this property includes food services, revenue is not comparable
to the other properties in this chart. For a description of asking monthly
rent per bed type at this property, see "Business and Properties -- Our
Properties -- The Callaway House, College Station, Texas." As of June 4,
2004, we have received applications with refundable deposits for the
2004-5 academic year for 538 beds and executed leases for 525 of the 538
beds. Based on demand, the property may be increased to double occupancy
beds for a total capacity of 566 beds.

(8) These properties are under construction and scheduled to open in August
2004.

(9) As of June 4, 2004, we have received applications with refundable deposits
for the 2004-5 academic year for 57.8% and executed leases for 48.0% of
the 406 beds.

(11) As of June 4, 2004, we have received applications with refundable deposits
for the 2004-5 academic year for 87.4% and executed leases for 78.4% of
the 480 beds.

(12) Subject to a 75 year ground lease from Temple University. See "Business
and Properties -- Our Properties -- American Campus - Titan Properties --
University Village at TU."

(13) Of our 749 beds, Temple University has agreed to master lease up to 400
beds that they intend to make available to their students as part of their
annual "Housing Lottery." Students who are eligible to lease these Lottery
Beds will execute a lease directly with us. To the extent that all 400
Lottery Beds are not leased by eligible students prior to the commencement
of the 2004-2005 lease period, Temple University will lease and pay rent
on the remaining unleased beds. As of June 4, 2004, we have executed
leases for 347 of the remaining 349 beds for the 2004-5 academic year. See
"Business and Properties -- Our Properties -- University Village at TU."

(15) Subject to a participating ground lease with its primary university
system. See "Business and Properties -- Our Properties -- On-Campus
Participating Properties."

(16) Total revenue for the 12 months ended March 31, 2004 excludes revenue of
$1,185,076 from Coyote Village, which was transferred to Weatherford
College in 2004 and revenue of $2,173,361 from The Village at Riverside,
which following the formation transactions will be owned by an entity
affiliated with RAP and RSVP. These revenues are included in our
historical revenues for the 12 months ended March 31, 2004.

(17) Does not include revenues from The Callaway House because of its food
service component.

The following describes certain of our material properties:

THE VILLAGE AT BLACKSBURG, BLACKSBURG, VA. The Village at Blacksburg is located
in Blacksburg, VA approximately one mile north from the main campus of Virginia
Polytechnic Institute and State University, which had a Fall 2003 student
enrollment of approximately 27,700.

The University's on-campus student housing properties can accommodate
approximately 8,900 students, and these facilities were 99% occupied in Fall
2003. These on-campus facilities are residence hall style buildings with
freshmen accounting for 60% of on-campus occupancy. The University has a
residence requirement for freshmen without a permanent address in Montgomery
County. The University had planned to erect new housing in 2005 which would
include an additional 250 beds in a residence hall facility, but has postponed
this plan due to budgetary constraints. The University is building 150 beds for
graduate students in a residence hall scheduled to open in Fall 2004.

The off-campus market consists mostly of conventional multi-family housing that
is targeted to students. We believe there are 14 competing student housing
properties that consist of 9,750 beds (including the Village at Blacksburg). We
believe the average occupancy among this group is approximately 86%. We are
aware of two prospective developments in the market that would total
approximately 300 units.

The property was built in two phases: Phase I was built in 1990 by a private
developer and Phase II was built in 1998 by a competing owner-operator of
student housing. Our Predecessor Entities acquired the property in December
2000. The property is located on a 13.6-acre site and consists of 26 two and
three-story, garden-style residential buildings (plus two clubhouses)
consisting of wood-frame construction with a brick and siding exterior. There
is a total of approximately 337,000 rentable square feet ("rsf') with 288
apartment units and 1,056 beds, offered in a Two Bedroom/One Bathroom, Two
Bedroom/One Bathroom Deluxe, or a Four Bedroom/Two Bathroom unit configuration.
Units feature semi-private baths, full kitchen with all appliances (including a
microwave and a dishwasher), full-size washer/dryer and high-speed network,
cable and telephone hook-ups in each bedroom. All units are fully furnished.
Community amenities include computer center with connection to the Internet,
fitness center, game room, tanning bed, two swimming pools, jacuzzi, sand
volleyball court, tennis court and basketball court. The property has 1,106
parking spaces (1.0 spaces per bed) and is located on the University's shuttle
bus route.

Rental rates include water/sewer, trash and basic cable television, with
Internet access as an optional service. The unit mix is as follows:

PHASE I

MONTHLY ASKING
RENT/BED FOR
UNIT TYPE NO. UNITS BEDS/UNIT BEDS UNIT SF TOTAL RSF 2003-4
- --------------------------------- ----------- ----------- ------ --------- ----------- ---------------

Four Bedroom/Two Bath ........... 132 4 528 1,215 160,380 $ 360-370
Two Bedroom/One Bath ............ 36 2 72 745 26,820 $ 390-410
Two Bedroom/One Bath Deluxe ..... 12 2 24 776 9,312 $ 415-435
--- --- -------
PHASE I TOTAL .................. 180 624 196,512
=== === =======

PHASE II

MONTHLY ASKING
RENT/BED FOR
UNIT TYPE NO. UNITS BEDS/UNIT BEDS UNIT SF TOTAL RSF 2003-4
- ------------------------------- ----------- ----------- -------- --------- ----------- ---------------

Four Bedroom/Two Bath ......... 108 4 432 1,300 140,400 $ 375-385
--- --- -------
PHASE II TOTAL ............... 108 432 140,400
=== === =======
PROPERTY TOTAL ............... 288 1,056 336,912
=== ===== =======

The property is rented primarily on full-year leases running from mid-August to
mid-August. Rent is collected in 12 equal consecutive installments paid July
through June. The occupancy rate was 75.7% as of March 31, 2004 compared to
95.4% as of March 31, 2003, 99.6% as of March 31, 2002, and 100.5% as

100

of March 31, 2001 (the property was acquired in December 2000). As of June 4,
2004, we have received applications with refundable deposits for the upcoming
2004-2005 academic year for 98.6% of the 1,056 beds and executed leases for
98.1% of the 1,056 beds.

The total revenue of the property for the 12 months ended March 31, 2004 was
approximately $4.0 million compared to $4.4 million for the 12 months ended
March 31, 2003. We believe that the decrease in both revenue and occupancy from
March 31, 2003 to March 31, 2004 was due to a softening overall multi-family
market in Blacksburg coupled with aggressive rate increases for 2003 that were
not well received in the market. We have revised the rental rates to conform
with current market conditions for the 2004-2005 academic year. The property is
now offering a limited amount of unfurnished units and removing included
services (local telephone, Internet) from base rental rates in order to market
a lower cost alternative to students. Approximately 81% of the units are
estimated to be leased as fully furnished in Fall 2004. With the property being
fully leased for the upcoming 2004-2005 academic year, contracted revenue is
projected to increase by more than $699,000 over the 2003-2004 academic year.

Following the Offering, this property will be encumbered by non-recourse
mortgage indebtedness in the original principal amount of approximately
$22,160,000. This indebtedness bears interest at a fixed annual rate of 7.5%
and requires monthly debt service payments sufficient to amortize the debt over
a 30-year period. The indebtedness matures in January 2011, at which time it is
scheduled to have an outstanding principal balance of approximately
$19,600,000.

We have budgeted approximately $399,500 for capital expenditures at this
property in 2004. This amount is in excess of our standard per bed capital
expense due to the scheduled first time replacement of floor covering,
appliances, furniture and roofs of Phase I as well normal recurring items for
both phases. Real estate taxes at this property totaled approximately $241,000
for the months ended March 31, 2004. For federal tax purposes, this property
has a basis of $22.1 million and is depreciated using the straight-line method
and rate over a depreciable life of 27.5 years.

THE VILLAGE ON UNIVERSITY, TEMPE, ARIZONA. The Village on University is located
in Tempe, Arizona approximately one mile east from the main campus of Arizona
State University, which had a Fall 2003 student enrollment of approximately
47,400.

The University's on-campus facilities can accommodate approximately 5,600
students, and these facilities are currently 100% occupied with a significant
wait list. The majority of these on-campus facilities are residence hall style
buildings with freshmen accounting for 74% of on-campus occupancy; the
University has stated a goal of increasing freshman occupancy to 85% for Fall
2004. The University does not currently have an on-campus housing requirement
and does not guarantee housing for its students. The University has plans to
develop additional housing projects in the next two years: a 2000-bed freshman
housing facility is scheduled to open in 2005 on the south campus and 264-bed
fraternity housing facility, also on the south campus, is currently under
construction and scheduled to open this August.

The off-campus market consists mostly of conventional multi-family properties
that either have been converted to a student housing format or, because of
softness in the Phoenix and Tempe multi-family market, are directly targeting
students. We believe the directly competing student housing properties consist
of 15 complexes with over 7,100 beds (including both of our owned properties,
Commons on Apache and The Village on University). We believe the average
occupancy for this group of properties is approximately 90%.

Originally built in 1998 by a private developer, The Village on University was
acquired by our Predecessor Entities in December 1999. The property occupies a
19.2-acre site and consists of 19 three-story, garden-style residential
buildings and a community center/leasing office consisting of wood-frame
construction with stucco exterior. The property totals approximately 299,000
rsf with 288 apartment units and 918 beds, offered in a One Bedroom/One
Bathroom, Two Bedroom/Two Bathroom, Two Bedroom/Two Bathroom Deluxe, Three
Bedroom/Two Bathroom, Four Bedroom/Two Bathroom, or a Four Bedroom/Four
Bathroom unit configurations. Units feature private or semi-private baths, full
kitchen appliances (including a microwave and dishwasher), full-size
washer/dryer and high-speed network, cable and telephone hook-ups in each
bedroom. Community

101

amenities include business center with computers connected to the Internet,
fitness center, swimming pool, jacuzzi, tanning bed, carports, sports court,
game room and sand volleyball court. The property has 956 parking spaces (1.0
spaces per bed) and is located on the University's shuttle bus route.

Rental rates include water/sewer, trash, basic cable television and local
telephone. The unit mix is as follows:

MONTHLY
ASKING RENT/
UNIT TYPE NO. UNITS BEDS/UNIT BEDS UNIT SF TOTAL RSF BED FOR 2003-4
- --------------------------------------- ----------- ----------- ------ --------- ----------- -------------------

Four Bedroom/Four Bath ................ 48 4 192 1,320 63,360 $ 470-490
Four Bedroom/Two Bath ................. 96 4 384 1,065 102,240 $ 445-455
Three Bedroom/Two Bath ................ 72 3 216 1,165 83,880 $ 465-475(1)
$ 500-510(2)
Two Bedroom/Two Bath .................. 36 2 72 759 27,324 $ 570
Two Bedroom/Two Bath (Deluxe) ......... 18 2 36 774 13,932 $ 585
One Bedroom/One Bath .................. 18 1 18 477 8,586 $ 780-785
-- --- -------
TOTAL ................................. 288 918 299,322
=== === =======

- ----------------
(1) Reflects a two bedroom configuration that offers a shared bath.

(2) Reflects a one bedroom configuration that offers a private bath.

The property is rented primarily on full-year leases running August to August.
Rent is collected in 12 equal consecutive installments paid August through
July. The occupancy rate as of March 31, 2004 was 75.7% compared to 84.9% as of
March 31, 2003, 94.2% as of March 31, 2002, 80.9% as of March 31, 2001, and
99.6% as of March 31, 2000. As of June 4, 2004, we have received applications
with refundable deposits for the 2004-5 academic year for 75.6% of the 918 beds
and executed leases for 58.4% of the 918 beds.

The total revenue of the property for the 12 months ended March 31, 2004 was
approximately $4.2 million as compared to approximately $4.8 million for the 12
months ended March 31, 2003. The decrease in revenue and occupancy was the
result of competitive pressures from newly constructed conventional
multi-family complexes near the property coupled with a softness in the overall
Phoenix/Tempe multi-family market. We have instituted changes to this
property's operations, including property- and regional-level managerial
changes and re-pricing for a certain number of the units. Moreover, we have
leased all of the units at Commons on Apache, our other property in this
market, to Arizona State University for a minimum one-year period for a minimum
annual rental of approximately $1,660,000 ($14,955 per unit), increasing by 3%
a year for each subsequent year. We believe that the University intends to
include this facility as part of its on-campus housing lottery. We anticipate
being able to absorb a significant number of students being relocated from
Commons on Apache to The Village on University property, thereby further
enhancing its occupancy rate.

Following the Offering, this property will be unencumbered by indebtedness. We
have budgeted capital expenditures of approximately $250,800 in 2004 for this
property, mostly for recurring capital expense items such as carpet and
furniture replacement. Real estate taxes at this property totaled approximately
$207,000 for the 12 months ended March 31, 2004. For federal tax purposes, this
property has a basis of $31.2 million and is depreciated using the
straight-line method and rate over a depreciable life of 27.5 years.

RIVER CLUB APARTMENTS, ATHENS, GEORGIA. River Club is located in Athens,
Georgia approximately four miles west of the main campus of the University of
Georgia, Athens, which had a Fall 2003 student enrollment of approximately
32,900. The property also services students from Gainesville College, a local
two-year college with two campuses that is part of the University System of
Georgia and had a Fall 2003 enrollment of approximately 5,400 students.

The University of Georgia is currently able to accommodate approximately 5,800
students, or approximately 18% of total enrollment. For Fall 2003, on-campus
housing was currently 100% occupied with a wait list. The University currently
has an additional 1,200-bed residence with dining facility under

102

construction for a Fall 2004 opening. All current on-campus beds are in
residence hall style buildings with double or triple occupancy bedrooms;
however the new on-campus development will be all private bedrooms in two- or
four-bedroom suites. The University will begin instituting a freshman housing
requirement on-campus for Fall 2004.

The off-campus market consists of mostly student housing properties as well as
conventional multi-family facilities that directly targets students located
within five miles of the University. All of these facilities offer by-the-bed
leases and fully furnished units. We believe that there are eight student
complexes in the off-campus market that comprise 4,700 beds (including both of
our owned properties, River Club Apartments and River Walk Townhomes) and are
approximately 91% leased. There are approximately 400 additional off-campus
beds under construction in three complexes scheduled to open in Fall 2004.

Originally built in 1996 by a private developer, our Predecessor Entities
acquired the property in August 1999 together with the smaller River Walk
Townhomes. The property occupies a 92.5-acre site and consists of 17
three-story, garden-style residential buildings and a community center/leasing
office of wood-frame construction with Hardiplank(Reg. TM) exterior. There is a
total of approximately 315,000 rsf with 266 apartment units and 794 beds,
offered in a Two Bedroom/Two Bathroom, Three Bedroom/Three Bathroom, or a Four
Bedroom/Four Bathroom unit configuration. Units feature full kitchen appliances
(including microwave), full-size washer/dryer, and high-speed network, cable
and telephone hook-ups in each bedroom. Approximately 75% of the units are
estimated to be leased as fully furnished in Fall 2004. Community amenities
include business center with computers connected to the Internet, fitness
center, swimming pool, billiards room, sand volleyball court, tennis court and
basketball court. Parking at the property is provided for 794 spaces (1.0
spaces per bed). A shuttle bus to the University campus also serves the
property throughout the day.

Rental rates include water/sewer, trash and basic cable television. The unit
mix is as follows:

MONTHLY
ASKING RENT/BED
UNIT TYPE NO. UNITS BEDS/UNIT BEDS UNIT SF TOTAL RSF FOR 2003-4
- ---------------------------------- ----------- ----------- ------ --------- ----------- ----------------

Four Bedroom/Four Bath ........... 104 4 416 1,398 145,392 $ 345-355
Three Bedroom/Three Bath ......... 54 3 162 1,167 63,018 $ 370-380
Two Bedroom/Two Bath ............. 108 2 216 987 106,596 $ 410-420
--- --- -------
TOTAL ............................ 266 794 315,006
=== === =======

The property is rented primarily on full-year leases running from August to
August. Rent is collected in 12 equal consecutive installments paid August
through July. The occupancy rate was 97.9% as of March 31, 2004 compared to
96.0% as of March 31, 2003, 89.0% as of March 31, 2002, 91.4% as of March 31,
2001, and 90.3% as of March 31, 2000. As of June 4, 2004, we have received
applications with refundable deposits for the 2004-5 academic year for 72.0% of
the 794 beds and executed leases for 69.5% of the 794 beds. The total revenue
of the property for the 12 months ended March 31, 2004 was approximately $3.5
million as compared to $3.2 million for the 12 months ended March 31, 2003.

Following the Offering, this property will be encumbered by non-recourse
mortgage indebtedness in the original principal amount of approximately
$19,200,000. This indebtedness bears interest at a fixed annual rate of 8.18%
and requires monthly debt service payments sufficient to amortize the debt over
a 30-year period. The indebtedness matures in August 2010, at which time it is
scheduled to have an outstanding principal balance of approximately
$17,260,000.

We have budgeted approximately $140,000 for capital expenditures at this
property in 2004, mostly for recurring capital items such as carpet and
furniture replacement. Real estate taxes at this property totaled approximately
$288,000 for the twelve months ended March 31, 2004. For federal tax purposes,
this property has a basis of $19.5 million and is depreciated using the
straight-line method and rate over a depreciable life of 27.5 years.

THE CALLAWAY HOUSE, COLLEGE STATION, TEXAS. The Callaway House is located in
College Station, Texas adjacent to the main campus of Texas A&M University,
which had a Fall 2003 student enrollment of approximately 45,100. The property
also services Blinn College, a regional two-year college with three campuses
that had Fall 2003 enrollment of approximately 13,000. The University can
accommodate

103

approximately 10,400 students in its on-campus housing facilities, including
2,600 beds for members of its Corps of Cadets. On-campus housing is currently
95% occupied. Over two thirds of the on-campus facilities are residence hall
type buildings with shared or community-style bathrooms. The University does
not currently have a housing requirement and does not guarantee housing for its
students. Caine Hall, a 210 bed residence hall, will be closed for renovations
during the 2004/2005 academic year. We are not aware of any immediate plans by
the University to develop any additional on-campus housing.

The off-campus market consists of both garden apartment style student housing
and residence hall type buildings with food service that caters to students
(such as The Callaway House). We believe that the direct competitive properties
in the market consist of four complexes and approximately 2,900 beds (including
The Callaway House). Average occupancy at these facilities is approximately
49%. An existing garden apartment style student housing project is constructing
a second phase of 336 beds that is scheduled to open in Fall 2004, and we are
aware that a potential condominium development may begin construction for a
Fall 2004 opening. We have been advised that the prior owner of the Callaway
House is seeking to construct a student housing property on an adjacent parcel.
There is a restrictive covenant that runs to us in such parcel that restricts
the parcel's development as a full service student accommodation comparable to
the Callaway House. The prior owner has advised us that he intends to seek
declaratory relief from the courts to interpret the restrictive covenant in a
manner that would allow him to develop his planned project. We intend to defend
our rights under this restrictive covenant and the competitive position of our
property.

Originally built in 1999 in a co-development with our Predecessor Entities and
a private developer, the property was acquired by our Predecessor Entities in
March 2001 through an acquisition of 80% of a limited partnership. We are the
sole general partner and are entitled to receive a preferred 18% return
compounded monthly on our unreturned invested capital in the partnership and
80% of all distributions thereafter. As of December 31, 2003, our unreturned
invested capital and accrued but unpaid preferred distributions totaled $5.6
million. We believe that our partnership interest and management fees will
entitle us to receive substantially all of this property's cash flow for the
foreseeable future.

The property occupies a 3.5 acre site and consists of a single five-story
mid-rise residential building constructed of concrete curtain walls with steel
support. The property totals approximately 145,000 rsf with 173 units. The
property was designed to accommodate 438 beds; however, during peak periods,
several unit types can be equipped to accommodate bunk beds and thereby
increase the total number of beds to a maximum of 566. The property is
currently configured to accommodate 538 beds. Unit configurations include
Efficiency, One Bed/One Bath, Two Bed/One Bath (single or double occupancy),
Three Bed/Two Bath and Four Bed/Two Bath units in a residence hall-style
layout. All units feature private or semi-private baths, full-size
refrigerator, microwave and housekeeping. All units are fully furnished.
Community amenities include 24-hour customer service desk, fitness center,
laundry facilities, game room, mini-theatre, swimming pool with sun deck and
secluded study rooms. The property also features an on-site dining hall that is
open seven days a week while the University is in session. The property also
includes a 5.5-story, 474-space, parking garage located next to the property
and an additional 120 spaces in an adjacent surface parking lot.

Rental rates include water/sewer, trash and cable television, and have 61
different payment plans, depending upon floor plan, lease term and food plan.
The unit mix is as follows:

MONTHLY ASKING
RENT/BED FOR
UNIT TYPE NO. UNITS BEDS/UNIT BEDS UNIT SF TOTAL RSF 2003-4*
- ----------------------------------- ----------- ----------- ------ --------- ----------- ---------------

Four Bedroom/Two Bath ............. 56 4 224 1,205 67,480 $ 939
Three Bedroom/Two Bath ............ 4 3 12 940 3,760 $ 1,028-1,215
Two Bedroom/One Bath (Double) ..... 50 4 200 724 36,200 $ 745
Two Bedroom/One Bath (Single) ..... 39 2 78 724 28,236 $ 1,110
Efficiency ........................ 4 1 4 313 1,252 $ 1,267
One Bedroom/One Bath .............. 20 1 20 407 8,140 $ 1,462
-- --- ------
TOTAL ............................. 173 538 145,068
=== === =======

- ----------------
* Includes 10 meals per week

104

The property is rented primarily on a nine-month lease paid in ten installments
paid June through March. The occupancy rate was 73.4% as of March 31, 2004
compared to 93.3% as of March 31, 2003, 92.0% as of March 31, 2002, and 97.8%
as of March 31, 2001 (The property was acquired in March 2001). As of June 4,
2004, we have received applications with refundable deposits for the 2004-5
academic year for 570 of the 538 design beds and executed leases for 525 of the
538 design beds. The total revenue of the property for the 12 months ended
March 31, 2004 was approximately $4.7 million compared to approximately $5.5
million for the 12 months ended March 31, 2003. The decrease in revenue and
decline in occupancy reflects a softening in the residence hall market due to
the entry of competitive properties. In order to address the increased
competition, we have reduced rental rates at this property.

Following the Offering, this property will be encumbered by non-recourse
mortgage indebtedness in the original principal amount of approximately
$20,475,000. This indebtedness is held by an institutional lender, bears
interest at a fixed annual rate of 7.10% and requires monthly debt service
payments sufficient to amortize the debt over a 30-year period. The
indebtedness matures in April 2011, at which time it is scheduled to have an
outstanding principal balance of approximately $17,930,000.

The property has experienced some movement in its foundation that has led to
cosmetic imperfections on interior walls. A July 2003 property condition report
did not find evidence of any apparent major structural damage or mechanical
distress at the complex and concluded that it would not be necessary to spend
$1.5 million to fully halt future shifting at the foundation. However, we have
budgeted $60,000 annually for ongoing wall repairs. In addition to wall repair,
we have budgeted approximately $121,500 in capital expenditures for 2004,
mostly for recurring expenses such as carpet and furniture replacement.

Real estate taxes at this property totaled approximately $450,000 for the 12
months ended March 31, 2004. For federal tax purposes, this property has a
basis of $19.2 million and is depreciated using the straight-line method and
rate over a depreciable life of 27.5 years.

THE VILLAGE AT ALAFAYA CLUB, ORLANDO, FLORIDA. The Village at Alafaya Club is
located in Orlando, Florida approximately one mile southwest of the main campus
of The University of Central Florida, which had a Fall 2003 student enrollment
of approximately 38,600. The property also services students from Valencia
Community College, a local two-year college with six campuses in Orange and
Osceola County and a Fall 2003 enrollment of approximately 53,000 students,
with approximately 16,000 of those being full-time.

The University of Central Florida can accommodate in its on-campus facilities
approximately 3,750 students, and these are currently over 100% occupied with a
waiting list. Approximately 2,370 beds are in a residence hall style building
containing approximately 1,380 beds in an apartment-style configuration.
Approximately 62% of the on-campus housing is comprised of double occupancy
bedrooms, and approximately 80% of the on-campus housing is occupied by
freshmen students. The University does not currently have an on-campus housing
requirement and limits available renewals to 20% of existing residents to
maximize freshman occupancy on-campus. The University has explored building an
additional 800 double occupancy beds on-campus, but no construction has begun
at this time. The University also has off-campus affiliated housing bringing
the total on-campus or university affiliated beds to 7,947 beds.

The off-campus market consists of established student housing properties
located within two miles of the University that offer furnished units,
comparable amenities and by-the-bed leases. We believe that the direct
competitive properties in the market are comprised of 12 competitive student
housing complexes consisting of approximately 10,200 beds (including both of
our owned properties, The Village at Alafaya Club and The Village at Science
Drive) and approximately 95% are leased for the current period. We are aware of
one potential project of 700 beds located over 1.5 miles south of the
University that has been in the planning stage for over two years; however,
construction has yet to begin.

Originally built in 1999 by a private developer, our Predecessor Entities
acquired the property in July 2000. The property occupies a 20.0-acre site and
consists of 19 three-story, garden-style residential buildings and a community
center/leasing office of wood-frame construction with stucco exterior. The
property totals approximately 327,000 rsf with 228 units and 840 beds, offered
in either a Three

105

Bedroom/Three Bathroom or Four Bedroom/Four Bathroom unit configuration. Units
feature walk-in closets, private baths, full kitchen appliances (including a
microwave and dishwasher), full-size washer/dryer and high-speed network, cable
and telephone hook-ups in each bedroom. All units are fully furnished.
Community amenities include business center with computers connected to the
Internet, fitness center, swimming pool, valet trash pick-up, sand volleyball
court and basketball court. The property has 851 parking spaces (1.0 spaces per
bed). A shuttle bus to the University campus also serves the property every 15
minutes.

Rental rates include water/sewer, trash, basic cable television, local
telephone and $30 per person electric allowance. The unit mix is as follows:

MONTHLY ASKING
RENT/BED FOR
UNIT TYPE NO. UNITS BEDS/UNIT BEDS UNIT SF TOTAL RSF 2003-4
- ---------------------------------- ----------- ----------- ------ --------- ----------- ---------------

Four Bedroom/Four Bath ........... 156 4 624 1,520 237,120 $ 465-479
Three Bedroom/Three Bath ......... 72 3 216 1,250 90,000 $ 485-499
--- --- -------
TOTAL ............................ 228 840 327,120
=== === =======

The property is rented primarily on full-year leases running from August to
August. Rent is collected in 12 equal consecutive installments paid August
through July. The occupancy rate was 98.9% as of March 31, 2004 compared to
92.6% as of March 31, 2003, 95.6% as of March 31, 2002, and 93.3% as of March
31, 2001 (the property was acquired in July 2000). As of June 4, 2004, we have
received applications with refundable deposits for the 2004-5 academic year for
73.1% of the 840 beds and executed leases for 70.2% of the 840 beds. The total
revenue of the property for the 12 months ended March 31, 2004 was
approximately $5.0 million compared to approximately $4.5 million for the 12
months ended March 31, 2003.

Following the Offering, this property will be encumbered by non-recourse
mortgage indebtedness in the original principal amount of approximately
$21,200,000. This indebtedness bears interest at a fixed annual rate of 8.16%
and requires monthly debt service payments sufficient to amortize the debt over
a 30-year period. The indebtedness matures in August 2010, at which time it is
scheduled to have an outstanding principal balance of approximately
$19,050,000.

We have budgeted approximately $183,800 in capital expenditures for 2004,
mostly for recurring expenses such as carpet and furniture replacement. Real
estate taxes at this property totaled approximately $373,000 for the 12 months
ended March 31, 2004. For federal tax purposes, this property has a basis of
$21.7 million and is depreciated using the straight-line method and rate over a
depreciable life of 27.5 years.

THE VILLAGE AT SCIENCE DRIVE, ORLANDO, FLORIDA. The Village at Science Drive is
located in Orlando, Florida approximately one mile southeast of the main campus
of The University of Central Florida and, like The Village at Alafaya Club,
also services students from Valencia Community College.

The off-campus market consists of established student housing properties
located within two miles of the University that offer furnished units,
comparable amenities and by-the-bed leases. We believe that the direct
competitive properties in the market consist of 12 complexes and approximately
10,200 beds (including both of our owned properties, The Village at Alafaya
Club and The Village at Science Drive) and approximately 95% are leased for the
current period. We are aware of one potential project of 700 beds located over
1.5 miles south of the University that has been in the planning stage for over
two years; however, construction has yet to begin.

Originally built in 2000 by a private developer, the property was acquired by
our Predecessor Entities in November 2001. The property occupies a 14.8-acre
site and consists of 16 three-story, garden-style residential buildings and a
community center/leasing office of wood-frame construction with Hardiplank(Reg.
TM) and stucco exterior. The property totals approximately 288,000 rsf with 192
apartment units and 732 beds, offered in either a Three Bedroom/Three Bathroom
or Four Bedroom/Four Bathroom unit configuration. Units feature walk-in
closets, private baths, full kitchen appliances (including a microwave and
dishwasher), full-size washer/dryer and high-speed network, telephone and cable
hook-ups in each

106

bedroom. All units are fully furnished. Community amenities include business
center with computers connected to the Internet, fitness center, swimming pool,
gated entry, sand volleyball court and basketball court. The property has 732
parking spaces (1.0 spaces per bed). The property is located on the
University's shuttle bus route.

Rental rates include water/sewer, trash, basic cable television, Internet
access and electric. The unit mix is as follows:

MONTHLY
ASKING
RENT/BED FOR
UNIT TYPE NO. UNITS BEDS/UNIT BEDS UNIT SF TOTAL RSF 2003-4
- ---------------------------------- ----------- ----------- ------ --------- ----------- -------------

Four Bedroom/Four Bath ........... 156 4 624 1,557 242,892 $ 480-495
Three Bedroom/Three Bath ......... 36 3 108 1,261 45,396 $ 500-515
--- --- -------
TOTAL ............................ 192 732 288,288
=== === =======

The property is rented primarily on full-year leases running from August to
August. Rent is collected in 12 equal consecutive installments paid August
through July. The occupancy rate was 98.1% as of March 31, 2004 compared to
91.0% as of March 31, 2003 and 95.2% as of March 31, 2002 (the property was
acquired in November 2001). As of June 4, 2004, we have received applications
with refundable deposits for the 2004-5 academic year for 99.4% of the 732 beds
and executed leases for 98.8% of the 732 beds. The total revenue of the
property for the 12 months ended March 31, 2004 was approximately $4.4 million
compared to approximately $3.8 million for the 12 months ended March 31, 2003.

Following the Offering, this property will be unencumbered by mortgage
indebtedness. We have budgeted approximately $100,900 in capital expenditures
for 2004. Real estate taxes at this property totaled approximately $334,000.
For federal tax purposes, this property has a basis of $18.8 million and is
depreciated using the straight-line method and rate over a depreciable life of
27.5 years.

UNIVERSITY VILLAGE, FRESNO, CALIFORNIA. University Village is located in
Fresno, California adjacent to the campus of California State University,
Fresno. The University had a Fall 2003 student enrollment of approximately
21,200.

The University can accommodate approximately 1,000 students in its on-campus
facilities, and these facilities are currently 100% occupied. All of the
on-campus housing is residence halls. The University does not currently have a
housing requirement and does not guarantee housing for any of its students. We
actively participate in University sponsored events and marketing
opportunities. We are currently partnering with the University for its
orientation program as the preferred off-campus housing choice to the
approximately 7,500 freshmen and transfer students and parents that attend the
orientation sessions throughout the summer. The University has not communicated
any further plans to build additional on-campus housing facilities.

The off-campus market consists mostly of older, conventional multi-family units
that either have been converted to a student housing format or are directly
targeted to students. We believe there are six competing complexes that contain
over 1,200 units (containing an unknown number of beds), including University
Village. We believe the average occupancy in the market is 97%. We are not
aware of any plans to develop any additional multi-family housing in the
vicinity of the University.

The property is being built on a four-acre site and will consist of nine
connected three-story, garden-style residential buildings and community center
consisting of wood-frame construction with stucco exterior. The property will
total approximately 121,000 rsf with 105 apartment units and 406 beds, offered
in Two Bedroom/Two Bathroom and Four Bedroom/Four Bathroom unit configurations.
Units are expected to range in size from 737 rsf to 1,184 rsf and all will
feature private bedrooms and baths, washer and dryer, full kitchen appliances
(including a microwave and dishwasher) and high-speed network, cable and
telephone hook-ups in each bedroom. All units are expected to be fully
furnished. Community amenities will include business center with computers
connected to the Internet, fitness center, tanning bed, swimming pool, sand
volleyball court and basketball court. The property will be rented primarily on
a 12-month basis.

107

In August 2002 our Predecessor Entities commenced construction on the property
with a construction budget of approximately $16.1 million. In May 2003 the
project was destroyed by a fire set by vandals who were subsequently
apprehended. Reconstruction recommenced in August 2003 and the project is
scheduled to open in August 2004. The project was insured to a limit of $10
million (with certain sublimits) with an additional excess policy of $2
million. Through May 2004, we have received advance payments from the insurer
in the amount of $7.75 million, including $4 million received following
December 31, 2003. We have submitted a formal claim to the insurer for
approximately $10 million. There can be no assurance as to the amount and
timing of any final settlement. Our December 31, 2003 financial statements
reflected a $3.7 million receivable due to us with respect to this claim, which
was received in the first four months of 2004.

Rental rates are expected to include water/sewer, gas, trash, cable and
Internet access. Parking is available at an additional monthly charge per
person of $20 for uncovered and $30 for covered parking. The unit mix is as
follows:

MONTHLY
ASKING
UNIT TYPE NO. UNITS BEDS/UNIT BEDS UNIT SF TOTAL RSF RENT/BED*
- -------------------------------- ----------- ----------- ------ --------- ----------- ----------

Four Bedroom/Four Bath ......... 98 4 392 1,184 116,032 $ 499
Two Bedroom/Two Bath ........... 7 2 14 737 5,159 $ 575
-- --- -------
TOTAL .......................... 105 406 121,191
=== === =======

- ----------------

* Asking prices for 2004-5 academic year.

As of June 4, 2004, applications with deposits for the 2004-5 academic year
were received for approximately 86.8% of the 406 beds in the property and
executed leases for 48.0% of the 406 beds. Through March 31, 2004, we had
incurred approximately $13.5 million in developing this property, and our
budget for the project is approximately $16.2 million, although there can be no
assurance that the actual cost will not exceed our budgeted amount.

Following this Offering, the property will be unencumbered by mortgage
indebtedness. We have budgeted approximately $3,000 in capital expenditures for
2004. Real estate taxes at this property totaled approximately $25,000 for the
12 months ending March 31, 2004.

See "Risk Factors -- Risks Related to Our Properties and Our Business -- Three
of our properties are under construction and we may encounter delays in
completion or experience cost overruns."

UNIVERSITY VILLAGE AT SAN BERNARDINO, SAN BERNARDINO, CALIFORNIA. University
Village at San Bernardino is located in San Bernardino, California adjacent to
the campus of California State University, San Bernardino. The University had a
Fall 2003 student enrollment of approximately 16,300.

The University can accommodate approximately 1,000 students in its on-campus
facilities, and these facilities are currently 90% occupied due to some
attrition from the commencement of the academic year. Approximately 55% of the
on-campus housing are residence halls, with the remainder being apartment style
buildings with kitchenettes. The University does not currently have a housing
requirement and does not guarantee housing for any of its students. We have an
affiliation agreement with the University requiring the University to actively
promote the property as part of its housing offering and provide marketing
assistance.

The off-campus market consists mostly of older, conventional multi-family units
that either have been converted to a student housing format or are directly
targeted to students. We believe that the off-campus competitive student
housing market consists of seven complexes that contain over 1,500 units (an
unknown number of beds), including University Village, of which approximately
97% are leased for the current period.

The property is being built on a nine-acre site and will consist of 5
three-story, garden-style residential buildings and community center consisting
of wood-frame construction with stucco exterior. The property will total
approximately 134,000 rsf with 132 apartment units and 480 bedrooms, offered in
a Two Bedroom/One Bathroom, Four Bedroom/Two Bathroom, or a Four Bedroom/Four
Bathroom unit

108

configuration. Units are expected to range in size from 672 rsf to 1,190 rsf
and all will feature private or semi-private baths, full kitchen appliances
(including a microwave and dishwasher) and high-speed network, cable and
telephone hook-ups in each bedroom. All units are expected to be fully
furnished. Community amenities will include laundry center, business center
with computers connected to the Internet, fitness center, swimming pool, sand
volleyball court and basketball court. The property will be rented primarily on
a 9-month lease and corresponding 3 month summer session lease.

Rental rates are expected to include water/sewer, gas, trash, electric, cable
and Internet access. The unit mix is as follows:

MONTHLY
ASKING
UNIT TYPE NO. UNITS BEDS/UNIT BEDS UNIT SF TOTAL RSF RENT/BED*
- -------------------------------- ----------- ----------- ------ --------- ----------- ----------

Four Bedroom/Four Bath ......... 24 4 96 1,190 28,560 $ 680
Four Bedroom/Two Bath .......... 84 4 336 1,064 89,352 $ 650
Two Bedroom/One Bath ........... 24 2 48 672 16,128 $ 725
-- --- ------
TOTAL .......................... 132 480 134,040
=== === =======

- ----------------

* Asking prices for 2004-5 academic year.

The California State University has an option to purchase this property for
$28.3 million, which option expires 150 days after notice of completion of
construction has been given to the University. We expect to give this notice
during the month of August 2004. We believe the University will seek approval
to exercise this option.

As of June 4, 2004, applications with deposits for the 2004-5 academic year
were received for approximately 87.4% of the 480 beds in the property and
executed leases for 78.4% of the 480 beds. Through March 31, 2004, we had
incurred approximately $15.4 million in developing this property, and our
budget for the project is approximately $23.6 million, although there can be an
assurance that the actual cost will not exceed budgeted amount.

See "Risk Factors -- Risks Related to Our Properties and Our Business -- Three
of our properties are under construction and we may encounter delays in
completion or experience cost overruns."

UNIVERSITY VILLAGE AT TU, PHILADELPHIA, PENNSYLVANIA. University Village at TU
is located in Philadelphia, Pennsylvania less than one-quarter mile east of the
Temple University campus. The University had a Fall 2003 student enrollment of
approximately 32,400.

The University's current on-campus housing can accommodate approximately 4,400
students, and these facilities are 100% occupied with a significant wait list.
The University also leases approximately 1,200 "sponsored beds" in various
off-campus apartment complexes. The majority of on-campus housing is either
residence hall style or residence suites. The University does not currently
have a residence requirement.

There currently are over 800 beds of dedicated student housing in the area,
which includes the Kardon Building, a converted loft building located one block
east of the campus, and Oxford House, a new student housing development one
block west of the campus that is scheduled to open by Fall 2004. In addition to
dedicated and sponsored student housing, there is a significant amount of
conventional multi-family housing throughout the city (estimated to be over
140,000 units). There is also a significant concentration of multi-family
housing in Center City, the Philadelphia downtown area, that is located
approximately three miles south of the University's main campus.

The property is being built on a 2.3-acre site and will consist of three
buildings that will be three, four and six stories. Construction will be of
steel and concrete with a brick, stucco and metal exterior. The property will
total approximately 182,000 rsf with 220 apartment units and 749 beds, offered
in a

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Two Bedroom/One Bathroom, Three Bedroom/Three Bathroom, Four Bedroom/Two
Bathroom (double occupancy), or a Four Bedroom/Four Bathroom unit
configuration. Units are expected to range in size from approximately 448 rsf
to approximately 1,125 rsf, and all will feature private or semi-private baths,
full kitchen appliances (including microwave), nine-foot ceilings and
high-speed network, cable and telephone hook-ups in each bedroom. All units are
expected to be fully furnished. Community amenities will include laundry
center, business center with computers connected to the Internet, fitness
center, social lounge with big-screen televisions and a game room.

Residents will be required to sign-up for a communications package that
includes cable television and Internet access. The property will be rented
primarily on full-year leases running mid-August to mid-August. Rent will be
collected in 12 equal installments from July through June. The unit mix will be
as follows:

MONTHLY
ASKING
UNIT TYPE NO. UNITS BEDS/UNIT BEDS UNIT SF TOTAL RSF RENT/BED*
- -------------------------------------------- ----------- ----------- ------ --------- ----------- ------------

Four Bedroom/Four Bath ..................... 105 4 420 1,125 118,125 $ 655-665
Two Bedroom/Two Bath (Double Occ.) ......... 49 4 196 682 33,418 $ 500
Three Bedroom/Three Bath ................... 1 3 3 905 905 $ 670-680
Two Bedroom/One Bath ....................... 65 2 130 448 29,120 $ 625
--- --- -------
TOTAL ...................................... 220 749 181,568
=== === =======

- ----------------

* Asking prices for 2004-5 academic year

Of our 749 beds, Temple University has agreed to master lease up to 400 beds
that they intend to make available to their students as part of their annual
"Housing Lottery." Students who are eligible to lease these Lottery Beds will
execute a lease directly with us. To the extent that all 400 Lottery Beds are
not leased by eligible students prior for the commencement of the 2004-2005
lease period, Temple University will lease and pay rent on the remaining
unleased beds.

As of June 4, 2004, we have executed leases for 347 of the 349 remaining beds.
Through March 31, 2004, we had incurred approximately $19.1 million in
developing this property, and our budget for the project is approximately $41.5
million, although there can be no assurance that the actual cost will not
exceed the budgeted amount.

We hold a leasehold interest in the property pursuant to a 75-year ground lease
(with four six-year options, which may be unilaterally denied by the
University) with Temple University that requires us to pay annual minimum rent
of $0.1 million, plus (i) an annual "Preferred Return" (defined as the amount
by which Net Revenues exceed $150,000, not to exceed $50,000), and (ii) 1% of
the amount by which Net Revenues exceed the sum of the Preferred Return plus
$150,000. In addition, we must pay the University (a) 1% of the amount, if any,
of the refinancing net proceeds and (b) 1% of the amount, if any, of the Sale
Net Proceeds from any sale of our leasehold interest, excluding sales to an
affiliate or the University. After substantial completion of the property, we
may not transfer the lease without the University's consent, which consent may
not be unreasonably withheld. Any proposed transfer of our rights to the
property must first be offered to the University. The University has the option
at any time, commencing on the 40th anniversary of the rent commencement date
(such option vesting date estimated to be no later than September 1, 2044), to
purchase our interest in the lease. The purchase price for our leasehold
interest is the fair market value of the lease as determined by an appraisal
process set forth in the lease. The closing of such transaction will occur
within 60 days following the determination of the purchase price. The
University also has a right of first offer with respect to any third party
receiving or purchasing our leasehold interest.

Following this Offering, the property (and our leasehold interest) will be
unencumbered by mortgage indebtedness. We have budgeted approximately $3,000 in
capital expenditures for 2004. Real estate taxes at this property totaled
approximately $2,107 for the 12 months ended March 31, 2004.

See "Risk Factors -- Risks Related to Our Properties and Our Business -- Three
of our properties are under construction and we may encounter delays in
completion or experience cost overruns."

110

ON-CAMPUS PARTICIPATING PROPERTIES

We currently participate in the ownership of four on-campus properties with two
university systems. Under the terms of these arrangements, an affiliate of our
Company leases the land under the property (or the facility itself) from the
local educational institution and funds the development and construction costs
generally with long-term financing that is secured by our leasehold interest.
The debt service and maturity of the financing is structured to closely
coincide with the terms of the ground lease. Legal title to the land and
improvements is owned by the local educational institution. We manage the
facility and, after payment of our management fees, the property's net cash
flow is shared with the educational institution. The institution typically
retains the option to purchase our interest in and assume the management of the
facility; the purchase price is calculated at the discounted present value of
the present cash value of our leasehold interest.

While the terms of each specific ground lease agreement tend to vary in certain
respects, the following terms are generally common to all:

o TERM: 30-40 years, subject to early termination upon repayment of the
mortgage financing, which generally has a 25-year amortization.

o GROUND LEASE RENT: Typically a nominal amount (e.g., $100 per annum
over the lease term) plus 50% of net cash flow.

o FINANCING: The mortgage financings for University Village -- PVAMU,
University College -- PVAMU and University Village -- TAMIU are
non-recourse and limited to our leasehold interest in the facility.
Loans are structured either as conventional leasehold or taxable bond
financing. We are permitted to grant additional mortgage liens on our
leasehold interest without the educational institution's consent
provided that the funds are used for the facility's operation and
maintenance, to pay funds owed to the institution or to repay existing
mortgage debt. The loan for Cullen Oaks is a construction loan with
customary recourse provisions. See "-- Indebtedness" below.

o CONTINGENT MASTER LEASE OBLIGATION: If, at the beginning of a
semester, the student rentals are projected to be insufficient to
cover project expenditures (other than management fees) as estimated
in the property's annual budget (the so-called "Financial Break-Even
Point"), the educational institution (or university system) is
obligated to lease beds for an amount sufficient to cause the project
to achieve the Financial Break-Even Point. Until such supporting lease
payments by the institution are repaid, our management fee is deferred
and the institution is entitled to receive 100% of the property's net
cash flow. Once these supporting lease payments have been repaid, net
cash flow is used first to pay our deferred management fees. This
"contingent master lease obligation" expires once the project debt
receives an investment grade bond rating, which to date has been
achieved at University Village -- PVAMU and University College --
PVAMU.

o POLICY COMMITTEE: We and the educational institution each appoint
representatives to a Policy Committee which approves policies and
operating procedures regarding residents, budgeting and successors to
our manager entity at the project.

o PROPERTY MANAGER: Generally, the initial manager has been one of our
subsidiaries. The management agreements typically have an initial
5-year term, and thereafter are automatically renewed on a
month-to-month basis with mutual termination rights upon 30 days'
notice. Our duties as manager are similar to those as a manager of our
owned properties. The management agreements terminate upon termination
of our ground lease.

o TRANSFERABILITY: The educational institution's consent, which may not
be unreasonably withheld, is required prior to our assignment of any
interest in our ground lease; provided, however, that consent is not
required for any assignment to one of our affiliates. Other than with
respect to student rentals, the institution's consent is required
prior to our subletting of the site.

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o DEFAULT/REMEDIES: We have 60 days to cure any monetary default and 180
days to cure any non-monetary default, following our receipt of
written notice of such default.

o PURCHASE OPTION & RIGHT OF FIRST REFUSAL:

o The educational institution typically has an option to purchase our
leasehold interest for the lesser of:

o (i) the fair market value, or

o (ii) the present cash value of our leasehold interest discounted
to present value at a 9.5% per annum discount rate, plus the
cost of repayment or defeasance of all debt secured by our
leasehold interest.

o The institution typically has a right of first refusal to purchase our
leasehold interest in the event we propose to sell it to any third
party.

o UNIVERSITY PROMOTIONS: The educational institution has an obligation
to promote the project, include information relative to the project in
brochures and mailings and to permit us to advertise the project.

o STUDENT OCCUPANCY RENTS: Without the educational institution's
consent, we may not 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.

o INDEBTEDNESS: Our on-campus participating properties are secured by
approximately $78.2 million of indebtedness, including the
construction loan on Cullen Oaks.

Although our on-campus participating properties account for 43.5% of our units
and 35.4% of our beds, because of the structure of their ownership and
financing they only provided approximately $471,000 in distributable cash flow.
See "Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Unique Structure of On-Campus Participating Properties."

UNIVERSITY VILLAGE (PVAMU), PRAIRIE VIEW, TEXAS. University Village was
developed by our Predecessor Entities in three phases between 1996 and 1998 in
conjunction with the Texas A&M System on behalf of Prairie View A&M University
on sites totaling 31.2-acres on the campus of the University. The property is
located in the heart of the campus adjacent to the University's core academic
buildings. The Prairie View A&M University campus is located in Prairie View,
Texas and had a Fall 2003 enrollment of approximately 7,300. University Village
and University College represent all of Prairie View A & M University's
on-campus housing. There is no substantial or comparable off-campus product in
the market that caters to students of the University.

The property occupies a 31-acre site on the University campus and consists of
30 three-story, garden-style residential buildings of wood-frame construction
with brick and Hardiplank(Reg. TM) exterior. The property totals approximately
505,000 rsf with 612 apartment units and 1,920 beds, offered in a Two
Bedroom/Two Bathroom or a Four Bedroom/Two Bathroom unit configuration. Units
feature private and semi-private baths, microwave, refrigerator and high-speed
network hook-ups in each bedroom. All units are fully furnished. Community
amenities include three community centers featuring computer lab, fitness
centers, a self-serve hair salon, television/social lounges, sub-divisible
multipurpose room, sand volleyball court, basketball sport court and
picnic/barbecue gathering areas. The property has 1,924 parking spaces (1.0
space per bed).

Rental rates include water/sewer, trash and a $25 monthly electric allowance.
The unit mix is as follows:

PHASES I & II

MONTHLY ASKING
RENT/BED FOR
UNIT TYPE NO. UNITS BEDS/UNIT BEDS UNIT SF TOTAL RSF 2003-4
- ------------------------------- ----------- ----------- ------- --------- ----------- ---------------

Four Bedroom/Two Bath ......... 294 4 1,176 900 264,600 $ 402
Two Bedroom/Two Bath .......... 72 2 144 630 45,360 $ 453
--- ----- -------
TOTAL PHASES I & II ........... 366 1,320 309,960
=== ===== =======

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PHASE III

MONTHLY ASKING
RENT/BED FOR
UNIT TYPE NO. UNITS BEDS/UNIT BEDS UNIT SF TOTAL RSF 2003-4
- ------------------------------- ----------- ----------- -------- --------- ----------- ---------------

Four Bedroom/Two Bath ......... 54 4 216 1,030 55,620 $ 464
Two Bedroom/Two Bath .......... 192 2 384 727 139,584 $ 523
--- --- -------
TOTAL PHASE III ............... 246 600 195,204
--- --- -------
PROPERTY TOTAL ................ 612 1,920 505,164
=== ===== =======

The property is rented primarily on an academic year basis, with rent paid in
eight consecutive monthly installments. The occupancy rate was 95.6% as of
March 31, 2004 compared to 97.2% as of March 31, 2003, 93.9% as of March 31,
2002, 91.3% as of March 31, 2001, and 94.9% as of March 31, 2000. As of June 4,
2004, we have received applications with refundable deposits for the 2004-5
academic year for 82.6% of the 1,470 beds and executed leases for 48.6% of the
1,470 beds. The property had total revenue for the 12 months ending March 31,
2004 of approximately $7.3 million compared to $7.3 million for the year ended
March 31, 2003. Per our ground lease agreement, we receive 50% of net
distributable cash in addition to management fee income. Our total revenue from
this property was approximately $383,000 for the 12 months ended March 31, 2004
compared to $347,000 for the 12 months ended March 31, 2003. Our ground lease
expires on August 31, 2038; however, the facility lease agreement states that
in no event will the lease extend beyond the full and final repayment of all
indebtedness incurred. Pursuant to the facility lease agreement, the scheduled
final maturity of the debt will not be later than September 1, 2023 (current
debt expires September 1, 2023).

Following the Offering, this property will be encumbered by non-recourse
mortgage indebtedness in the original principal amount of approximately
$34,060,000 securing a taxable bond financing that also was used to finance
University Village -- TAMIU. Following are the next five scheduled debt service
payments under this financing, which payments will fully amortize this loan by
its scheduled maturity in 2023:

YEAR INTEREST PRINCIPAL TOTAL
- ----------------------------------- -------------- --------------- --------------

2004 ....................... $ 2,412,249 $ 733,000 $ 3,145,249
2005 ....................... $ 2,360,866 $ 781,000 $ 3,141,866
2006 ....................... $ 2,303,227 $ 841,000 $ 3,144,227
2007 ....................... $ 2,241,162 $ 902,000 $ 3,143,162
2008 ....................... $ 2,174,594 $ 967,000 $ 3,141,594
Aggregate through Maturity . $ 19,782,723 $ 27,360,000 $ 47,142,723

We have budgeted approximately $296,500 in capital expenditures for 2004,
mostly for recurring expenses such as carpet and furniture replacement. Due to
its financing structure, this property is exempt from real estate taxes and did
not pay any taxes for the 12 months ending March 31, 2004. For federal tax
purposes, this property has a basis of $31.5M and is depreciated using the
straight-line method and rate over a depreciable life of 27.5 years.

UNIVERSITY COLLEGE (PVAMU), PRAIRIE VIEW, TEXAS. University College was
developed by our Predecessor Entities in two phases between 2000 and 2003 in
conjunction with the Texas A&M system and on behalf of Prairie View A&M
University. The property is dedicated housing for freshman students at the
University. The property is located in the heart of the campus adjacent to the
University's core academic buildings.

The property occupies a 10.5-acre site on the campus of the University and
consists of 14 three-story, garden-style residential buildings of wood-frame
construction with brick and Hardiplank(Reg. TM) exterior with interior
corridors. The property totals approximately 202,000 rsf with 756 apartment
units and 1,470 beds offered in a Two Bedroom/One Bathroom unit configuration
with One Bedroom/One Bathroom and Efficiency Staff Units. Units feature private
bedrooms, semi-private baths, micro-fridge and high-speed network hook-ups in
each bedroom. All units are fully furnished. Community amenities include a
computer center, fitness center, movie theater, academic counseling center and
housekeeping service. Parking at the property is provided for 150 spaces (0.1
spaces per bed) as freshman are required to park on the north and west side
lots of campus.

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Rental rates include water/sewer, trash, cable television, local telephone and
electric. The unit mix is as follows:

MONTHLY ASKING
RENT/BED FOR
UNIT TYPE NO. UNITS BEDS/UNIT BEDS UNIT SF TOTAL RSF 2003-4
- -------------------------------- ----------- ----------- ------- --------- ----------- ---------------

Two Bed/One Bath Suite (Double) 714 2 1,428 253 180,642 $ 442
One Bed/One Bath Suite (Single) 18 1 18 567 10,206 Staff Bed
Efficiency ..................... 24 1 24 471 11,304 Staff Bed
--- ----- -------
TOTAL .......................... 756 1,470 202,152
=== ===== =======

The property is rented primarily over the academic year with eight consecutive
monthly payments. The occupancy rate was 94.9% as of March 31, 2004 compared to
98.7% as of March 31, 2003, 99.3% as of March 31, 2002, 97.4% as of March 31,
2001 (the first phase of the property was developed in August 2000). As of June
4, 2004, we have received applications with refundable deposits for the 2004-5
academic year for 57.0% of the 1,920 beds and executed leases for 18.3% of the
1,920 beds. The property had total revenue for the 12 months ended March 31,
2004 of approximately $5.6 million compared to $4.9 million for the 12 months
ended March 31, 2003. Per the ground lease agreement, we receive 50% of net
distributable cash along with management fee income. The total revenue
(including management fees) received by us from this property for the 12 months
ended March 31, 2004 was approximately $573,000 compared to $536,000 for the 12
months ended March 31, 2003. Our ground lease expires on August 31, 2039;
however, the facility lease agreement states that in no event will the lease
extend beyond the full and final repayment of all indebtedness incurred.
Pursuant to the facility lease agreement, the scheduled final maturity of the
debt will be no later than August 31, 2028 (current debt expires in August 2025
and August 2028).

Following the Offering, this property will be encumbered by two non-recourse
mortgage loans in the aggregate original principal amount of approximately
$25,320,000 securing two series of taxable bond financings. Following are the
next five scheduled debt service payments under this financing, which payments
will amortize these loans through their scheduled maturities in 2028.

YEAR INTEREST PRINCIPAL TOTAL
- ----------------------------------- -------------- --------------- --------------

2004 ....................... $ 1,726,024 $ 510,000 $ 2,236,024
2005 ....................... $ 1,699,278 $ 540,000 $ 2,239,278
2006 ....................... $ 1,666,449 $ 570,000 $ 2,236,449
2007 ....................... $ 1,631,655 $ 605,000 $ 2,236,655
2008 ....................... $ 1,594,703 $ 540,000 $ 2,134,703
Aggregate through Maturity . $ 17,297,678 $ 21,730,000 $ 39,027,678

We have budgeted approximately $189,500 in capital expenditures for 2004,
mostly for recurring expenses such as carpet and furniture replacement. Due to
its financing structure, this property is exempt from real estate taxes and did
not pay any taxes for the 12 months ended March 31, 2004. For federal tax
purposes, this property has a basis of $22.8M and is depreciated using the
straight-line method and rate over a depreciable life of 27.5 years.

AMERICAN CAMPUS - TITAN DEVELOPMENT RELATIONSHIP

Since April 2000 one of our Predecessor Entities was a party to a joint venture
with Titan Investments, a third party developer, for the development of
off-campus student housing properties. One such property, University Village at
Boulder Creek, has been open and operating since fall 2002. Three other
properties, University Village at San Bernardino, University Village at Fresno
and University Village at TU, are currently in construction and are scheduled
to open in Fall 2004. In conjunction with this Offering and as part of the
formation transactions, we will acquire Titan's minority interest in these
properties for an aggregate purchase price of approximately $5.7 million.

After this Offering, we will continue to pursue selected developments with
Titan. Titan will be required to offer us a right of first refusal on all of
Titan's student housing investment opportunities.

114

In the event that we elect to undertake the development opportunity, we will
fund all of Titan's predevelopment costs, escrow amounts and land acquisition
costs. If we elect not to undertake the development opportunity, Titan will
have the right to pursue such opportunity at its discretion, subject to certain
non-compete provisions. We will, at all times, have the right to pursue student
housing activities and the acquisition, development and ownership of student
housing properties outside of the framework of our development arrangement with
Titan.

Upon the closing of any future project that we elect to undertake, Titan will
earn a development fee and will own a 30% carried interest in the project after
we have received a cumulative preferred return on total project costs
(including costs funded with indebtedness). The preferred return will initially
be 7.5% and will be adjusted for each project to reflect our then-current cost
of equity and debt capital. We will provide construction management services
for each such property and will receive a construction management fee equal to
2.5% of total development costs.

Following completion of the project's first full calendar year of operations,
Titan will have the right to have its property interest valued and put to us
for cash or Units, at our election. If Titan elects to put its interest in a
property to us, we will have the right at that time to purchase Titan's
interest in any other projects that, based upon their valuation at that time,
fail to exceed our preferred return. Upon completion of a project's fifth full
year of operations, we will have the right to call Titan's property interest at
its market value at that time, for cash or Units, at our election.

THIRD PARTY SERVICES

During the last decade, colleges and universities have turned to the private
sector for assistance in developing and managing their on-campus student
housing. We believe that we are considered one of the leaders in the
privatization of student housing. Our clients have included some of 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 and the University of Colorado System.

Our reputation and track record have enabled us to selectively pursue those
third party services that enhance our Company's reputation and franchise value
as well as those that may enhance our primary goal of developing and acquiring
assets. Our development services provide us with ancillary benefits with
respect to product development, development and construction management
infrastructure and purchasing power. Our management and leasing services
provide us with inroads into additional markets as well as providing an
expanded geographical and human resource infrastructure for the management of
our owned assets.

DEVELOPMENT SERVICES

We typically provide our third party development services to colleges and
universities seeking to modernize their on-campus student housing properties.
They look to us to bring our student housing experience and expertise to ensure
they develop marketable, functional, and financially sustainable facilities.
Educational institutions usually seek to build housing that will enhance their
recruitment and retention of students while facilitating their academic
objectives. Most of these development service contracts are awarded via a
competitive request for proposal or RFP process that qualifies developers based
on their overall capability to provide specialized student housing design,
development, construction management and financial structuring services.

We believe that we are recognized today as one of the nation's premier student
housing development companies, having developed 31 student housing properties,
including six that are currently under construction, for 20 client
institutions. The aggregate development costs for these projects exceeds $525
million.

Our development services typically include our pre-development services,
construction management and financial structuring services. Our pre-development
services typically include feasibility studies for third party owners and
design services. Feasibility studies include (i) initial feasibility analysis,
(ii)

115

approval and review of conceptual design and (iii) assistance with creation of
master planning scenario. Some of the documents produced in this process
include the site plan, conceptual design, preliminary budget and cash flow
statements and preliminary marketing assessment. Our design services include
(i) coordination with the architect, (ii) review of construction plans and
(iii) assistance with project due diligence and project budget.

Construction management is supervision of the construction, equipping and
furnishing process on behalf of the project owner, including site visits,
hiring of a general contractor and engineers, and coordination of project
completion in accordance with plans and specifications and with adequate
insurance. In certain cases (Weatherford College and two phases of housing at
Lamar University), we performed these services by entering into a ground lease
with the university and constructing the facility which was then acquired by
the university.

Our development services activities benefit our primary goal of owning and
operating student housing properties in a number of ways. By providing these
services to others, we are able to expand and refine our unit plan and
community design, the operational efficiency of our material specifications and
our ability to determine market acceptance of unit and community amenities. Our
development and construction management personnel enable us to establish
relationships with general contractors, architects and project professionals
throughout the nation. Through these services, we gain experience and expertise
in residential and commercial construction methodologies and in development and
construction projects under various labor conditions, including right-to-work
labor markets, markets subject to prevailing wage requirements and fully
unionized environments.

In third party developments, we typically provide guarantees of the obligations
of the developer, including development budgets and timely project completion.
We seek to mitigate our risk under these completion guarantees by, among other
things, obtaining similar guarantees from the project contractors. We have
never had any of our guarantees called by any university.

PROPERTY UNIVERSITY LOCATION DESCRIPTION OF SERVICES
- ---------------------------------- ------------------------ ---------------- ---------------------------------------

Under Construction
1. IPFW Student Housing Indiana University- Fort Wayne, IN Design and development services for
Purdue University 568 bed apartment building community
Fort Wayne scheduled to open in August 2004. We
are also managing this community and
are currently setting up the initial
operations and lease-up.

2. Cardinal Village (Phase III) Lamar University Beaumont, TX Design, development and construction
management services for a 499 bed
apartment building community
scheduled to open in August 2004. We
are also managing this community and
are currently setting up the initial
operations and lease-up.

4. San Marcos Hall Phase II Texas State University San Marcos, TX Design, development and construction
management for a 471 bed residence
hall scheduled to open in August 2004.

116

PROPERTY UNIVERSITY
- ------------------------------------ -----------------------------

5. Vista Del Campo Apartments The University of
Phase I California, Irvine

6. Bear Creek at Williams Village The University of
Phase I(b) Colorado at Boulder

Pre-Development

7. Fenn Tower Cleveland State University

8. Purdue University-Calumet Purdue University-Calumet

9. Purdue University Purdue University

10. Saint Leo University Saint Leo University
Phase II

11. Washington State University Washington State University

12. West Virginia University West Virginia University

13. Vista Del Campo Apartments The University of
Phase II California, Irvine

PROPERTY LOCATION DESCRIPTION OF SERVICES
- ------------------------------------ -------------------- --------------------------------------------

5. Vista Del Campo Apartments Irvine, CA Design, development and construction
Phase I management services for a 1,488 bed
garden apartment community scheduled
to open in September 2004. We are also
managing this community and are
currently setting up the initial operations
and lease-up.

6. Bear Creek at Williams Village Boulder, CO Design, development and construction
Phase I(b) management for a 499 bed mid-rise
apartment community scheduled to open
in August 2004. We are also managing
this community and are currently setting
up the initial operations and lease-up.

Pre-Development

7. Fenn Tower Cleveland, OH We have been awarded the design,
redevelopment and refurbishment of an
existing high rise. Upon completion, it
will contain approximately 400 beds. We
have also received a management and
development award letter for all
on-campus housing facilities with a term
of 10 years.

8. Purdue University-Calumet Hammond, IN Feasibility and design oversight services.
We also will assume management for this
property.

9. Purdue University West Lafayette, IN Feasibility and design oversight services.

10. Saint Leo University Tampa, FL We have been awarded the design,
Phase II development and construction
management services of a 232 bed
apartment community scheduled to open
in August 2005.

11. Washington State University Pullman, WA Feasibility and design oversight services
for future projects, yet undetermined.

12. West Virginia University Morgantown, Feasibility and design oversight services
WV for future projects yet undetermined

13. Vista Del Campo Apartments Irvine, CA We have been awarded the design,
Phase II development and construction
management services of a 1,500 bed
Garden Apartment community scheduled
to open in Fall of 2006. We will assume
management of this property.

THE PUBLIC UNIVERSITY DEVELOPER SELECTION PROCESS

It is typical for public institutions to utilize a competitive public process
when selecting a student housing development partner. This process typically
qualifies the prospective developers based on ability to arrange financing and
to provide pre-development, development and construction management
capabilities as opposed to a lowest bid system. This process typically involves
two stages:

DEVELOPER SELECTION STAGE

When a public institution decides it needs additional student housing, public
institutions typically seek their governing board's approval prior to issuing a
request for proposals, which we refer to as an RFP. After receiving the RFP,
each developer prepares a response package with its proposals for the project.
Response packages are typically reviewed by a selection committee that includes

117

representatives from the administration, the business and finance office,
residence life and student development, the facilities department and often the
student body. The committee then makes a recommendation of a "preferred
developer" to the institution's governing board, which may ratify the
selection. Typically, the selected developer is notified by an award letter
from the institution.

PRE-DEVELOPMENT AND FINANCING STAGE

After receiving the award letter, the developer is typically required to incur
the costs for the pre-development activities prior to the successful
structuring and obtaining the financing commitments. These pre-development
activities include site evaluation, preparation of construction documents and
legal and financial structuring. These transactions costs are typically
reimbursed upon closing of the transaction. Generally, the transaction closing
is dependant on the final approval of the governing board and successful
closing of the project financing.

If an institution's governing board awards us the transaction, but does not
ultimately issue a final approval, we may not be able to recoup our
pre-development costs from the institution and the resulting losses could be
material. To date, we have never failed to receive final approval of an
institution's governing board following our receipt of an award from the
institution.

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MANAGEMENT SERVICES

Educational institutions seek to use the on-campus lifestyle experience to
create a sense of community and academic orientation that will facilitate a
student's personal development and achievement of academic objectives. Because
they view their student housing as an integral part of this educational
mission, colleges and universities typically do not outsource the management of
their student housing properties as they do book stores, dining services and
other facilities management and maintenance.

We currently provide third party management and leasing services for 16 student
housing properties owned by educational institutions, charitable foundations
and others, representing approximately 10,508 beds in approximately 3,903
units. Thirteen of these student housing properties were developed by us.
Together with our owned properties, we currently manage 32 student housing
properties, representing approximately 22,281 beds in approximately 7,771
units, making us one of the largest private managers of student housing
properties in the United States in terms of beds managed. Our management and
leasing services are typically provided pursuant to multi-year management
contracts that have an initial term between two and five years.

PROPERTY UNIVERSITY
- ----------------------------------------------------------- ----------------------------------------

1. Texan Hall (2) ........................................ Angelo State University
2. IPFW Student Housing (3) .............................. Indiana University - Purdue University
Fort Wayne
3. Cardinal Village (Phase I) ............................ Lamar University
4. Cardinal Village (Phase II) ........................... Lamar University
5. Cardinal Village (Phase III) (3) ...................... Lamar University
6. University Village - Savannah State ................... Savannah State University
7. Vista Del Campo Apartments Phase I (3) ................ The University of California, Irvine
8. Bear Creek at Williams Village Phase I(a) (2) ......... The University of Colorado at Boulder
9. Bear Creek at Williams Village Phase I(b) (3) ......... The University of Colorado at Boulder
10. Bayou Oaks Greek Housing (2) .......................... The University of Houston
11. Campus Estates (4) .................................... The University of Texas - Austin
12. Dobie Center (6) ...................................... The University of Texas - Austin
13. The Village at Riverside (7) .......................... The University of Texas - Austin
14. University Village at Sheppard Pratt .................. Towson University
15. Coyote Village (2) (8) ................................ Weatherford College
16. RAMS Commons .......................................... Winston Salem State University
TOTALS: ................................................

CONTRACT
END # OF # OF
PROPERTY DATE(1) UNITS BEDS
- ----------------------------------------------------------- ------------- ------- --------

1. Texan Hall (2) ........................................ Aug 2006 262 512
2. IPFW Student Housing (3) .............................. Jul 2005 220 568
3. Cardinal Village (Phase I) ............................ Aug 2008 261 521
4. Cardinal Village (Phase II) ........................... Aug 2008 261 521
5. Cardinal Village (Phase III) (3) ...................... Aug 2008 251 499
6. University Village - Savannah State ................... Aug 2007 192 660
7. Vista Del Campo Apartments Phase I (3) ................ Aug 2009 488 1,488
8. Bear Creek at Williams Village Phase I(a) (2) ......... Jul 2008 170 495
9. Bear Creek at Williams Village Phase I(b) (3) ......... Jul 2008 172 499
10. Bayou Oaks Greek Housing (2) .......................... Jul 2008 176 471
11. Campus Estates (4) .................................... Nov 2004(5) 498 1,548
12. Dobie Center (6) ...................................... May 2008 383 975
13. The Village at Riverside (7) .......................... Dec 2005 156 408
14. University Village at Sheppard Pratt .................. Aug 2004(5) 187 615
15. Coyote Village (2) (8) ................................ Jul 2004(5) 76 280
16. RAMS Commons .......................................... Aug 2007 150 448
--- -----
TOTALS: ................................................ 3,903 10,508

- ----------------

(1) Management agreements generally convert to 30-day notice upon expiration of
the initial term.
(2) Property began operation in August 2003.
(3) Property was under construction as of March 31, 2004, and is scheduled to
open in Fall 2004.
(4) Property management was awarded to us by the foreclosing lender in November
2003.
(5) We are currently in discussions with the owner for renewal.
(6) An indirect subsidiary of RSVP owns a 23% interest in this property. RSVP
has granted us a four-year option to acquire this interest. See "Certain
Relationships and Related Transactions -- Description of Contribution
Agreement."
(7) After the Formation Transactions, an affiliate of RAP and RSVP will own
this property. They have granted us a four-year option to acquire the
property. See "Certain Relationships and Related Transactions --
Description of Contribution Agreement."
(8) Property has been acquired from us by The Weatherford College in April
2004.

119

OPERATIONS

OBJECTIVES

Our management philosophy is based upon meeting the following objectives:

o Satisfying the specialized needs of residents by providing the highest
levels of customer service;

o Developing and maintaining an academically oriented environment via a
premier residence life/student development program;

o Maintaining each project's physical plant in top condition;

o Maximizing revenue through the development and implementation of a
strategic annual marketing plan and leasing administration program;
and

o Maximizing cash flow through the prudent control of expenses.

ON-SITE OPERATIONS

Each of our properties is staffed to implement all aspects of the property's
operations, including marketing, leasing administration, business
administration, financial reporting, on-going maintenance, capital projects and
and residence life and student development. In addition, we provide full
corporate support in each of these functional areas.

GENERAL MANAGERS AND ASSISTANT GENERAL MANAGERS. The General Manager is
responsible for all facets of a property's operation, including the development
and implementation of the annual budget, collection of rents, administration of
accounts payable, implementation of the annual marketing plan, administration
of LAMS and all lease administration functions and coordination of facilities
maintenance, asset preservation and capital improvement projects. The General
Manager also supervises the residence life program through the Assistant
General Manager and conducts all hiring, termination, and staff development of
on-site personnel. The Assistant General Manager, typically an on-site
position, assists the General Manager with the operations of the property. The
Assistant General Manager is also responsible for supervising the residence
life program and the on-site staff.

RESIDENT ASSISTANTS (COMMUNITY ASSISTANTS). Each property typically has 50-75
students per Resident Assistant. Our Resident Assistants are typically students
selected for their interpersonal skills, leadership capabilities and
willingness to meet the challenges and expectations of the position. It is a
position that fits well with many students' academic goals while affording them
opportunities for personal growth and leadership development. Each Resident
Assistant performs his or her position in exchange for room and, in some cases,
board. Resident Assistants are trained to provide support and assistance to
students on a variety of issues. The Resident Assistant acts as a community
facilitator by developing an atmosphere that promotes a sense of belonging,
support, and affiliation. In addition, the Resident Assistant participates
actively in developing and implementing the property's programs and events.
These activities include social, recreational and educational activities and
are coordinated with the staff to reach community goals. At all times, a
Resident Assistant is expected to be a role model and maintain the highest
standards of personal conduct. Through observation, availability and
interaction with the community, the Resident Assistant helps to identify
potential problems and make appropriate referrals so students may overcome
obstacles to their academic achievement. Our Resident Assistants collect and
submit pertinent data to us for our tracking, marking and evaluation processes.
Through their efforts to provide timely, accurate and thorough information in
the appropriate format, Resident Assistants contribute to the smooth and
effective operations of the property. We believe that this position is critical
to the success of our properties; maintaining a high level of performance is
therefore essential. At some of our larger properties, our Resident Assistants
are managed by one senior Resident Assistant, whom we refer to as a Resident
Director.

120

LEASING AND MARKETING

Unlike multi-family housing, where entire apartment units are leased and
vacated on a monthly basis, student housing properties are typically leased by
the bed and leases are based on the academic year. Most leases typically
commence and end on a single date, usually in August. Students typically move
in and move out within a three day moving period. Our leasing effort is
therefore focused almost entirely in the period between February through
August.

Each year we implement an aggressive marketing and leasing plan to re-lease
each property. We divide each school's student population into various
sub-groups, including, for example, current living arrangements, class, and
gender. Each property typically has six to ten target groups and we develop a
customized marketing message to position our property to meet that specific
target market's needs. We then identify specific marketing media to deliver our
marketing message. These media include print advertising in newspapers,
magazines and trade publications; direct mailers; radio advertising;
promotional events and supporting public relation campaigns. Of our 12 owned
properties, eight of them are listed in university publications or on
university websites.

We typically compete in the rental of off-campus student housing on the basis
of:

o the quality of our facilities, including their proximity to the
university campus as well as our properties' physical location, the
size and layout of units, and the types of resident amenities offered;

o rental terms, including price, which varies based on the student
market in which the property is located, and per-bed rental
(individual lease liability), which allows individual student-tenants
to avoid responsibility for the rental of an entire apartment unit;

o community environment, including community facilities and amenities
and programming, which is overseen by our staff of Resident
Assistants; and

o our relationships with universities, which results in our facilities
being recommended or at least listed by the primary universities near
our facilities.

COOPERATION IN LEASING WITH EDUCATIONAL INSTITUTIONS

We believe that both direct and indirect support of our communities by colleges
and universities is beneficial to the successful leasing of our off-campus
properties. We therefore actively seek to have these institutions to either
formally recommend our off-campus facilities to their students or to provide us
with access to their students to implement our direct marketing efforts. In
some cases, the institutions actually promote our off-campus facilities in
their recruiting and admissions literature. In other cases where the
educational institutions do not offer direct recommendations for off-campus
housing, most nonetheless provide mailing lists to us to access student or the
universities directly distribute to students a listing of suitable properties
to their students, and we continually work to ensure that our properties are on
these lists in each of the markets that we serve.

LAMS - LEASE ADMINISTRATION AND MARKETING SYSTEM

We believe we have developed the industry's only specialized, fully integrated
leasing administration and marketing software program, LAMS. Through LAMS, each
of our properties' ongoing marketing and leasing efforts can be supervised at
the corporate office on a real time basis. Among other things, LAMS provides:

o 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 all follow-up marketing pieces,
labels and electronic communications.

o 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

121

piece of traffic. This enables us to track the effectiveness of each
marketing program being utilized. 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.

o 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.

o 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. In addition, as we are leasing for the next academic year, LAMS
maintains the upcoming academic year's rent roll, assisting with
future quarters' cash planning.

STUDENT LEASES

Our off-campus and on-campus property leases typically contain the following
provisions:

o The lease term for off-campus properties generally is twelve months
and our lease term for on-campus properties generally is nine months.
We do some limited leasing on a per-semester basis.

o Rent is generally payable monthly. At The Callaway House and our
on-campus participating properties, students typically pay a
semester's rent in advance. At some of our on-campus participating
properties the universities transfer financial aid on behalf of
students receiving financial assistance at our on-campus properties.

o Rent typically includes charges for all amenities provided at the
property (for example, basic cable, fitness center, pool) and usually
parking, which, where available, is optional and may have a separate
charge. Some properties, depending on local market practices, will
also charge a separate monthly technology or administrative fee. At
The Callaway House, a choice of meal plans is included in the rent.

o Parents or legal guardians are required to guarantee, among other
things, the amounts payable under the leases, unless the student
provides evidence of satisfactory personal income.

o Each student tenant pays a security deposit, which averages
approximately $200 depending on local market practices. This deposit
is applied against any damage caused by the student to the unit
(including furnishings and household items within the unit). Students
(and guarantors) also assume personal responsibility for any damage
caused to a unit or the property's common areas.

o Apartments in most off-campus properties contain their own
washer/dryer. On-campus properties typically contain communal laundry
rooms with machines operated by a regional third party vendor.

o Subletting units is prohibited without our prior written consent.

o Defaults by the tenant under a lease include failure to pay rent when
due, breach of any other covenant contained in the lease or
abandonment of the unit.

o In on-campus properties only, students may request an early
termination of their leases, which we must reasonably grant, if they
withdraw from the university, are denied admission or are placed on
academic suspension or dismissal by the university.

122

PROGRAMMING

At all of our properties, we provide an array of educational, recreational and
social programs to build a sense of community and foster an active student
lifestyle. Examples of programs include:

o extensive community participation in university intramural sports;

o on site basketball, volleyball, ping pong and billiard tournaments;

o social events including pool parties and movie nights;

o term paper writing workshops;

o community participation in major university events such as homecoming;

o CPR training;

o study skills and test preparation;

o resume writing and job interview rehearsals; and

o nutrition and health programs.

Programming greatly facilitates an environment conducive to achieving academic
objectives. We believe this environment creates market value for which parents
are willing to pay a premium price.

COMPETITION AND COMPETITIVE ADVANTAGES

COMPETITION FROM UNIVERSITIES AND COLLEGES

We are subject to competition for student-tenants from on-campus housing
operated by educational institutions, charitable foundations and others.
On-campus student housing has certain inherent advantages over off-campus
student housing in terms of physical proximity to the university campus,
captive student body, perception of a more secure environment and the fuller
integration of on-campus facilities into the academic community. Colleges and
universities can generally borrow funds at lower interest rates than us (and
other private sector operators), thereby decreasing their costs of operating
new on-campus student housing. Residence halls owned and operated by the
primary colleges and universities in the markets of our owned properties
typically charge lower rental rates but offer fewer amenities than those
charged by our properties.

On the other hand, most universities are able to house only a small percentage
of their overall enrollment, and are therefore highly dependant upon the
off-campus market to provide housing for their students. High quality, well run
off-campus student housing can be a critical component to an institution's
ability to attract and retain students. Accordingly, a university or college,
rather than being a competitor, may actually become a potential customer of
off-campus student housing. Developing and maintaining a good relationship with
an educational institution can result in a privately-owned off-campus facility
becoming, in effect, an extension of the institution's housing program, with
the institution providing highly valued references and recommendations to
students and parents.

123

The following tables sets forth certain historical enrollment information
regarding the primary universities served for our properties. The information
is excerpted from a market study prepared by Rosen. For more information, see
"Industry Outlook":

TOTAL
ENROLLMENT
--------------------------
FALL FALL
PROPERTY UNIVERSITY SERVED: 2003 2002 CHANGE
- ----------------------- ----------------------- -------- -------- --------

Owned Off-Campus
Properties
Commons on Arizona State Arizona 47,359 45,693 1,666
Apache ............... University Main
Campus
The Village on Arizona State Arizona 47,359 45,693 1,666
University ........... University Main
Campus
University Village Cal State University, California 21,209 20,007 1,202
at Fresno ............ Fresno
University Village at Cal State University, California 16,341 15,985 356
San Bernardino ....... San Bernardino
University Village Temple University Pennsyl- 32,351 29,872 2,479
at TU ................ vania
The Callaway House..... Texas A&M Texas 45,083 44,618 465
University
University Village at The University of Colorado 30,983 29,609 1,374
Boulder Creek ........ Colorado at Boulder
River Club The University of Georgia 32,941 32,317 624
Apartments ........... Georgia - Athens
River Walk The University of Georgia 32,941 32,317 624
Townhomes ............ Georgia - Athens
The Village at The University of Florida 38,598 35,927 2,671
Alafaya .............. Central Florida
The Village at The University of Florida 38,598 35,927 2,671
Science Drive ........ Central Florida
The Village at Virginia Polytechnic Virginia 27,662 26,490 1,172
Blacksburg ........... Institute and State
University
On-Campus
Participating
Properties(2)
Cullen Oaks ........... The University of Texas 34,443 33,007 1,436
Houston
University Village, Prairie View A&M Texas 7,255 6,747 508
PVAMU ................ University
University College, Prairie View A&M Texas 7,255 6,747 508
PVAMU ................ University
University Village, Texas A&M Texas 3,753 3,373 380
TAMIU ................ International
University

UNDERGRADUATE
ENROLLMENT
--------------------------
ON- % OF FALL
FALL FALL CAMPUS 2003 TOTAL
PROPERTY 2003 2002 CHANGE CAPACITY ENROLLMENT
- ----------------------- -------- -------- -------- ---------------- -----------------

Owned Off-Campus
Properties
Commons on 36,802 35,191 1,611 5,600 (1) 11.8%
Apache ...............
The Village on 36,802 35,191 1,611 5,600 (1) 11.8%
University ...........
University Village 17,309 16,086 1,223 1,035 4.9%
at Fresno ............
University Village at 11,256 11,019 237 1,012 6.2%
San Bernardino .......
University Village 21,429 19,606 1,823 4,429 13.7%
at TU ................
The Callaway House..... 36,775 36,603 172 10,413 23.1%
University Village at 25,158 23,998 1,160 7,100 22.9%
Boulder Creek ........
River Club 24,983 24,395 588 5,817 17.7%
Apartments ...........
River Walk 24,983 24,395 588 5,817 17.7%
Townhomes ............
The Village at 32,044 30,036 2,008 7,947 (1) 20.6%
Alafaya ..............
The Village at 32,044 30,036 2,008 7,947 (1) 20.6%
Science Drive ........
The Village at 21,468 21,869 (401) 8,900 32.2%
Blacksburg ...........
On-Campus
Participating
Properties(2)
Cullen Oaks ........... 26,283 25,230 1,053 2,937 (1) 8.5%
University Village, 5,754 5,387 367 0 (1) 0.0% (3)
PVAMU ................
University College, 5,754 5,387 367 0 (1) 0.0% (3)
PVAMU ................
University Village, 2,933 2,609 324 0 0.0% (3)
TAMIU ................

- ----------------

(1) Data collected by Rosen. All other data licensed from Peterson's.

(2) On-campus beds shown at these properties do not include the Company's
participating properties.

(3) These universities do not have any on-campus housing other than our
on-campus participating properties.

COMPETITION FROM PRIVATE OWNERS

We also compete with other regional and national owner-operators of off-campus
student housing in a number of markets as well as with smaller local or
regional owner-operators. Currently, the industry is fragmented with no
participant holding a significant market share. There are a number of student
housing complexes that are located near to or in the same general vicinity of
many of our owned

124

properties and that compete directly with us. We believe that a number of other
large national companies with substantial financial resources may be potential
entrants in the student housing business. The entry of one or more of these
companies could increase competition for students and for the acquisition or
development of other student housing properties.

COMPETITIVE STRENGTHS

We believe that we have the following competitive advantages:

o We have expertise in the unique and specialized aspects of the student
housing industry and focus on student housing as our core business.

o We have assembled one of the industry's most experienced teams of
student housing professionals. Our senior management has been involved
in the development and/or management of more than 90 student
communities collectively throughout their individual careers. Our
seven most senior officers have more than 74 years of cumulative
student housing experience.

o Our portfolio consists of high quality student housing assets which
contain modern unit plans and extensive student oriented amenities.
Substantially all of our properties have been built in the last five
years, and include private bedrooms, private or semi-private
bathrooms, 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. Each of
our properties is managed and cared for by our trained on-site staff
of managers, maintenance and business personnel and Resident
Assistants.

o We are a self-managed, self administered and fully integrated
organization. We have a fully integrated organization that 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.

o Our track record. We have a proven track record as a developer,
acquirer, and manager of high quality student housing properties,
having completed the development of more than 30 projects, acquiring
nine projects and currently managing more than 30 student communities.

o We have an extensive network of relationships with university systems
and individual educational institutions, which provide us with
acquisition and development opportunities. Our clients have included
some of 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 and the University
of Colorado System.

o We are industry innovators. We have developed and implemented
specialized student housing operating systems and are industry
innovators, having created proprietary lease administration and
marketing software for the student housing industry that enables us to
quickly respond to market changes.

o Our unique focus. Subsequent to this Offering, we will be the only
publicly traded REIT solely focused on student housing in the United
States. We believe this will further enhance our reputation and
prominence in the student housing industry and will provide us with
access to capital markets. It will also enable us to use our shares or
Units as currency with which to acquire properties.

125

INDEBTEDNESS

OFF-CAMPUS PROPERTIES

The following table contains certain summary information concerning the
mortgage indebtedness that will encumber seven of our off-campus properties
after this Offering. It does not include the indebtedness encumbering our
on-campus participating properties:

INTEREST MATURITY BALANCE AS OF
ASSET LENDER ORIG. DATE RATE DATE 03/31/04
- ------------------------------- ------------------ ------------ ---------- ---------------- --------------

The Callaway House ............ Bank of America 03/30/2001 7.10% April 2011 $ 19,887,813
Commons on Apache ............. GE Capital Corp. 05/14/1999 7.66% June 2009 $ 7,727,058
River Club Apartments ......... GE Capital Corp. 07/28/2000 8.18% August 2010 $ 18,660,143
River Walk Townhomes .......... GE Capital Corp. 08/31/1999 8.00% September 2009 $ 7,743,348
The Village at Alafaya PW Real Estate 07/11/2000 8.16% August 2030 $ 20,614,087
Club ......................... Investments
The Village at Blacksburg ..... GE Capital Corp. 12/15/2000 7.50% January 2011 $ 21,517,596
University Village at
Boulder Creek ................ GE Capital Corp. 12/01/2002 5.71% December 2012 $ 16,703,453
------------
TOTAL ......................... $112,853,498
============

The weighted average interest rate of such indebtedness is 7.44%. Each of these
mortgages is a non-recourse obligation subject to customary exceptions. Each of
these mortgages have 30 year amortization. None of these mortgages are
cross-defaulted or cross-collateralized to any other indebtedness. The loans
generally may not be prepaid prior to maturity; in certain cases, prepayment is
allowed, subject to prepayment penalties.

ON-CAMPUS PARTICIPATING PROPERTIES

We have bonds outstanding secured by three of our on-campus participating
properties -- University Village -- PVAMU, University College -- PVAMU and
University Village -- TAMIU. Under the terms of these financings, one of our
special purpose subsidiaries publicly issued three series of taxable bonds and
loaned the proceeds to three special purpose subsidiaries that each hold a
separate leasehold interest. Although a default in payment by these special
purpose subsidiaries could result in a default under one or more series of
bonds, the indebtedness of any of these special purpose subsidiaries is not
cross-defaulted or cross-collateralized with indebtedness of the REIT, the
Operating Partnership or other special purpose subsidiaries. Repayment of
principal and interest on these bonds is insured by MBIA, Inc.

The following table sets forth certain information concerning these mortgage
financings:

ORIGINAL BALANCE AS OF
ASSET BOND TRUSTEE ORIG. DATE TERM 03/31/04
- -------------------------- ---------------- ---------------- ---------- --------------

University Village -
PVAMU (1) ............... JPMorgan Chase September 1999 24 years $31,584,000
University College - PVAMU
(Phase I) (2) ........... JPMorgan Chase May 2001 22 years $20,270,000
University College - PVAMU
(Phase II) (2) .......... JPMorgan Chase July 2003 25 years $ 4,325,000
University Village -
TAMIU (1) ............... JPMorgan Chase September 1999 24 years $ 4,831,000

- ----------------

(1) Part of combined bond issuance. Separate loan agreements are not
cross-collateralized or cross-defaulted.

(2) Multiple financings of single facility.

126

These loans encumbering our leasehold interests of University Village -- PVAMU,
University Village -- TAMIU and University College -- PVAMU are non-recourse,
subject to customary exceptions. For further information concerning these
financings, see "-- On-Campus Participating Properties" above.

Cullen Oaks is currently encumbered by a construction loan originated in
September 2000 in the original principal amount of approximately $17,700,000.
The loan bears interest at the prime rate, or LIBOR plus 1.9%, at our election.
We have in place an interest rate swap agreement which effectively caps the
interest on the outstanding balance of $17.3 million at 5.54%. The loan matures
in November 2008. We have fully guaranteed this loan.

The weighted average interest rate of the indebtedness encumbering our
on-campus participating properties is 7.51%.

REVOLVING CREDIT FACILITY

Simultaneously with the closing of our offering, we will enter into a $
million revolving credit facility. We are negotiating the terms of a credit
facility with affiliates of Citigroup Global Markets Inc. and Deutsche Bank
Securities Inc., two of our underwriters, to support the acquisition of
additional student housing properties and working capital needs. The facility
is expected to have a maximum term of 36 months. The facility is expected to
bear interest at a variable rate based upon one-month LIBOR (1.09% as of March
31, 2004). The credit facility will include several covenants on our part,
including minimum GAAP tangible net worth and maximum leverage covenants. Our
revolving credit facility will also contain covenants that restrict our ability
to pay dividends or other amounts to our stockholders (except to the extent
necessary to maintain our status as a REIT) unless certain financial tests are
satisfied. Concurrently with this Offering, we will use approximately $5.7
million of this facility to acquire Titan's interests in the American Campus -
Titan Properties.

INSURANCE

We carry comprehensive liability, fire, extended coverage, terrorism and rental
loss insurance covering all of the properties in our portfolio under various
policies. We believe the policy specifications and insured limits are
appropriate given the relative risk of loss, the cost of the coverage and
industry practice and, in the opinion of our Company's management, the
properties in our portfolio are adequately insured. Our terrorism insurance is
subject to exclusions for loss or damage caused by nuclear substances,
pollutants, contaminants and biological and chemical weapons. We do not carry
insurance for generally uninsured losses such as loss from riots or acts of
God. In addition, we carry earthquake insurance on our properties located in
seismically active areas and terrorism insurance on all of our properties, in
each case in an amount and with deductibles which we believe are commercially
reasonable. See "Risk Factors -- Risks Related to The Real Estate Industry--
Potential losses may not be covered by insurance."

In August 2002 we commenced construction on a student housing project in
Fresno, California with a construction budget of approximately $16.1 million.
In May 2003 the project was destroyed by a fire set by vandals who were
subsequently apprehended. Reconstruction recommenced in August 2003 and the
project is scheduled to open in August 2004. The project was insured to a limit
of $10 million (with certain sublimits) with an additional excess policy of $2
million. Our December 31, 2003 financial statements reflected a $3.7 million
receivable due to us with respect to this claim, which amount was subsequently
received. Through May 2004, we have received advance payments from the insurer
totaling $7.75 million. We have submitted a formal claim to the insurer for
approximately $10 million. There can be no assurance as to the amount and
timing of any final settlement. We have a remaining claim from the insurer for
approximately $2.25 million, which is not reflected on our financial
statements. Any payments received pursuant to this claim are subject to the
escrow provisions of the Contribution Agreement. For more information see
"Certain Relationship and Related Transactions -- Description of Contribution
Agreement."

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REGULATION

GENERAL

Student housing properties are subject to various laws, ordinances and
regulations, including regulations relating to common areas. We believe that
each of the existing properties has the necessary permits and approvals to
operate its business. Apartment community properties are subject to various
laws, ordinances and regulations, including regulations relating to
recreational facilities such as swimming pools, activity centers and other
common areas.

AMERICANS WITH DISABILITIES ACT

Our properties must comply with Title III of the Americans with Disabilities
Act, or ADA, to the extent that such properties are "public accommodations" as
defined by the ADA. The ADA may require removal of structural barriers to
access by persons with disabilities in certain public areas of our properties
where such removal is readily achievable. We believe that the existing
properties are in substantial compliance with the ADA and that we will not be
required to make substantial capital expenditures to address the requirements
of the ADA. However, noncompliance with the ADA could result in imposition of
fines or an award of damages to private litigants. The obligation to make
readily achievable accommodations is an ongoing one, and we will continue to
assess our properties and to make alterations as appropriate in this respect.

FAIR HOUSING ACT

The Federal Fair Housing Act, its state law counterparts and the regulations
promulgated by the U.S. Department of Housing and Urban Development or "HUD"
and various state agencies, prohibit discrimination in housing on the basis of
race or color, national origin, religion, sex, familial status (including
children under the age of 18 living with parents or legal custodians, pregnant
women and people securing custody of children under 18) or handicap
(disability) and, in some states, on financial capability. A failure to comply
with these laws in our operations could result in litigation, fines, penalties
or other adverse claims, or could result in limitations or restrictions on our
ability to operate, any of which could have an adverse effect on our cash flows
from operations. We believe that the existing properties are in substantial
compliance with the Federal Fair Housing Act.

ENVIRONMENTAL MATTERS

Also, some of the properties may contain regulated wetlands that can delay or
impede development or require costs to be incurred to mitigate the impact of
any disturbance. Absent appropriate permits, we can be held responsible for
restoring wetlands and be required to pay fines and penalties.

Some of the properties in our portfolio may contain microbial matter such as
mold, mildew and viruses. The presence of microbial matter could adversely
affect our results of operations. In addition, if any property in our portfolio
is not properly connected to a water or sewer system, or if the integrity of
such systems is breached, microbial matter or other contamination can develop.
If this were to occur, we could incur significant remedial costs and we may
also be subject to material private damage claims and awards, which could be
material. If we become subject to claims in this regard, it could materially
and adversely affect us and our insurability for such matters in the future.

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From time to time, the United States Environmental Protection Agency, or EPA,
designates certain sites affected by hazardous substances as "Superfund" sites
pursuant to CERCLA. Superfund sites can cover large areas, affecting many
different parcels of land. Although CERCLA imposes joint and several liability
for contamination on property owners and operators regardless of fault, the EPA
may chose to pursue PRPs based on their actual contribution to the
contamination. PRPs are liable for the costs of responding to the hazardous
substances. Each of Commons on Apache, the Village at University and University
Village at San Bernardino are located within federal Superfund sites. EPA
designated these areas as Superfund sites because groundwater underneath these
areas is contaminated. We have not been named, and do not expect to be named,
as a PRP with respect to these sites. However, there can be no assurance
regarding potential future developments concerning such sites.

None of the site assessments revealed any past or present environmental
liability that we believe would be material to us. However, the assessments may
have failed to reveal all environmental conditions, liabilities, or compliance
concerns. Material environmental conditions, liabilities, or compliance
concerns may have arisen after the assessments were conducted or may arise in
the future; and future laws, ordinances or regulations may impose material
additional environmental liability.

We cannot assure you that costs of future environmental compliance will not
affect our ability to pay distributions to you or that such costs or other
remedial measures will not be material to us. See "Risk Factors -- Risks
Related to The Real Estate Industry -- Existing conditions at some of our
properties may expose us to liability related to environmental matters."

EMPLOYEES

We currently employ approximately 570 employees consisting of:

o approximately 510 on-site employees, including 210 resident
assistants;

o approximately 20 persons in our management services department;

o approximately 20 persons in our development services department; and

o approximately 20 executive, corporate administration and financial
personnel.

Our employees are not currently represented by a labor union.

OFFICES

Our principal executive offices are located at 805 Las Cimas Parkway, Suite
400, Austin, Texas 78746. We also have a regional office located at 4199 Campus
Drive, Suite 550, Irvine, California 92612 and have management offices in each
of our properties.

LEGAL PROCEEDINGS

Neither we nor our subsidiaries are currently involved in any material
litigation nor, to our management's knowledge, is any material litigation
currently threatened against us or our subsidiaries or properties, other than
routine litigation arising in the ordinary course of business, all of which is
expected to be covered by liability insurance.

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STRATEGY FOR GROWTH

Our primary business objectives are to maximize distributable cash flow and to
enhance the value of our portfolio in order to maximize total returns to our
shareholders. We believe that significant investment opportunities exist in the
private sector ownership, development and management of high quality student
housing properties because of:

o the projected growth in student enrollment at colleges and
universities generally;

o a shortage of high quality student housing and premium student housing
services; and

o fragmented ownership in the student housing market.

We believe we can achieve these objectives by continuing to implement our
business strategies described below.

ACQUISITION AND DEVELOPMENT

We seek to own high quality, well designed and well located student housing
properties. We seek to acquire or develop properties in under-serviced markets
that have stable or increasing student populations. We also target properties
that provide an opportunity for substantial economic growth as a result of
their quality, proximity to campuses, or through our superior operational
capabilities. We believe that our reputation and close relationship with the
local universities gives us an advantage in securing acquisitions and obtaining
municipal approvals and community support for our development projects.

Acquisitions. During the 30 month period from May of 1999 to November of 2001,
we acquired nine properties (eight of which we still own) containing
approximately 1,800 units and 6,000 beds. We believe that our relationship with
university systems and individual educational institutions, our knowledge of
the student housing market, our prominence as the sole publicly-traded REIT
focused exclusively on student housing in the United States, will afford us a
competitive advantage in acquiring additional student housing properties.
Concurrently with this Offering, we will enter into a $ million revolving
credit facility with affiliates of Citigroup Global Markets Inc. and Deutsche
Bank Securities Inc., two of our underwriters, as joint lead arrangers, which
facility will be available following this Offering to, among other things, fund
future property acquisitions.

THIRD PARTY MANAGEMENT AND DEVELOPMENT SERVICES

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PROACTIVE MANAGEMENT

We will continue to maintain the high quality of our student housing
product. We intend to continue to provide a modern, high quality student
housing product that offers an active, responsible student lifestyle in an
academically oriented community atmosphere. Our on-site management and
maintenance staff provides well maintained facilities with comfortable living
areas, state-of-the-art technological capabilities and resort style amenities
that are designed to maximize a student's university experience. We also
utilize a classic Resident Assistant system that implements an array of
educational, recreational and social programs that are designed to promote an
atmosphere conducive to community pride, loyalty, scholarship and education.

We aggressively seek to enhance cash flow from our properties. We intend to
enhance cash flow through maximizing rental revenue from increased rental rates
and/or occupancy, expanding the range of income-generating tenant services,
where applicable, and controlling expenses through the implementation of cost
control management and systems. These include:

o periodically reviewing and re-bidding utility and service contracts;

o periodically analyzing benchmarking data to identify areas of
potential savings;

o analyzing marketing data from our proprietary lease administration and
marketing software for the student housing industry database to
determine the effectiveness of marketing initiatives and reduce
marketing costs;

o customizing our marketing and leasing programs based upon our
knowledge of each individual student housing market and our desired
product positioning; and

o monitoring resident satisfaction to ensure that cost saving measures
do not negatively impact our leasing efforts or our customers'
attitudes or perceptions.

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MANAGEMENT

DIRECTORS, EXECUTIVE OFFICERS AND SENIOR MANAGEMENT

Upon consummation of this Offering, our board of directors will consist of
seven members, at least 4 of whom are expected to be classified under
applicable New York Stock Exchange listing standards as "independent"
directors. Pursuant to our Charter, each of our directors is elected by our
stockholders to serve until the next annual meeting and until their successors
are duly elected and qualify. See "Certain Provisions of Maryland Law and of
Our Charter and Bylaws -- Our Board of Directors." The first annual meeting of
our stockholders after this Offering will be held in May 2005. Subject to
rights granted under any employment agreements, officers serve at the pleasure
of our board of directors.

The following table sets forth certain information concerning the individuals
who are our directors, executive officers and certain of our other senior
officers upon the consummation of this Offering:

NAME AGE POSITION
- -------------------------------- ----- ------------------------------------------------------

William C. Bayless, Jr.* (1) ... 40 President, Chief Executive Officer and Director
Brian B. Nickel* (1) ........... 31 Executive Vice President and Chief Investment Officer
and Director
R.D. Burck (1) ................. 71 Chairman of the Board and Director
Cydney Donnell (1) ............. 44 Independent Director
G. Steven Dawson (1) ........... 46 Independent Director
Winston W. Walker (1) .......... 60 Independent Director
Edward Lowenthal (1) ........... 59 Independent Director
Scott H. Rechler (1) ........... 36 Director
Mark J. Hager* (1) ............. 42 Executive Vice President and Chief Financial Officer
Greg A. Dowell ................. 40 Senior Vice President and Chief of Operations
Ronnie L. Macejewski ........... 38 Senior Vice President - Development and Construction
Brian N. Winger ................ 36 Senior Vice President - Development
Jason R. Wills ................. 32 Senior Vice President - Marketing and Business
Development

- ----------------
* Named Executive Officers

(1) Messrs. Bayless, Nickel and Hager currently serve as the sole directors of
our Company. Mr. Hager will serve as a director of the Company until the
consummation of this Offering at which time he will be replaced by an
independent director. Messrs. Burck, Walker, Lowenthal, Rechler and Ms.
Donnell will become directors upon consummation of this Offering.

(2) Member(s) of Audit Committee

(3) Members of Compensation Committee

(4) Members of Nominating and Corporate Governance Committee

The following is a biographical summary of the experience of our directors,
executive officers and certain other senior officers.

William C. Bayless, Jr. serves as our President and Chief Executive Officer and
is a member of our Board of Directors. Mr. Bayless, a co-founder of our
Company, assumed the position of President & Chief Executive in October of
2003. Prior to that time, he served as the company's Executive Vice President
and Chief Operating Officer, where he directed all aspects of the company's key
business segments including business development, development & construction
management, acquisitions, and management services. Prior to the formation of
American Campus in 1993, Mr. Bayless served as the Director of Operations for
Century Development's student housing division from 1991 to 1993. From 1988 to
1991, Mr. Bayless served as the Director of Marketing responsible for business
development and marketing for the student housing division of Cardinal
Industries. Mr. Bayless began his career in student housing with Allen & O'Hara
where held the positions of Resident Assistant, Resident Manager and Area
Marketing Coordinator from 1984 to 1988. Throughout his career 20-years of

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student housing experience, Mr. Bayless has been involved in the development
and/or management of 56 private student housing facilities containing more than
32,000 beds. He received a Bachelor of Science in Business Administration from
West Virginia University in 1986.

Brian B. Nickel serves as our Executive Vice President and Chief Investment
Officer and is a member of our Board of Directors. In this capacity, Mr. Nickel
has responsibility for all investment activities, oversees our business
development and growth related efforts, and is responsible for capital market
relationships. Mr. Nickel joined us in June 1996 as Director of Business
Development and served in various capacities during his tenure and was
appointed Executive Vice President and Chief Investment Officer in October
2003. While in the position of Vice President - Acquisitions, Mr. Nickel was
responsible for acquiring four of our nine acquired properties. While serving
as Vice President and Senior Vice President of Business Development, Mr.
Nickel's team closed over $453 million in development project financings.
Before joining us, Mr. Nickel held positions in the investment banking firms of
Kidder, Peabody Company and with the corporate finance group of LaSalle
Partners. Mr. Nickel received a BS in Economics from Northwestern University in
1994.

R.D. Burck retired from the position of Chancellor of The University of
Texas ("U.T.") System in 2002. As Chancellor of the U.T. System, he directed
one of the nation's largest higher education organizations, a $30 billion
enterprise with more than $15 billion in investment assets. He currently serves
as the first advisory director appointed by The University of Texas Investment
Management Co., a non-profit corporation created by the U.T. Board of Regents
to manage the investment of all assets over which the board has fiduciary
responsibility. Mr. Burck joined the U.T. System in 1988 to serve as the vice
chancellor of business affairs and then as executive vice chancellor for
business affairs before being appointed by the Board of Regents as interim
Chancellor in June 2000 and Chancellor six months later, in December 2000. Mr.
Burck worked worldwide for Getty Oil Co., headquartered in Los Angeles, from
1955 to 1984. In 1979, he was involved in the creation and early operation of
ESPN, the first cable TV sports network. He was a vice president and a director
of ESPN. Mr. Burck is currently a member of the board of directors for
Adorno/Rogers Technology Inc., infiNET Inc., and is an independent consultant
for Aon Risk Services. He also serves on the advisory boards for Frost Bank and
G51 Capital Management, L.L.C. In addition, Mr. Burck serves on The Headliners
Club Board of Trustees. He also has been a member of the board of the Texas
Department of Information Resources; the board of directors of the Texas Life,
Accident, Health, and Hospital Service Insurance Guaranty Association; the
formal advisory committee of the Texas Higher Education Coordinating Board; and
the advisory council of the U.T. Austin College of Natural Sciences. He is a
former director of the National Conference of Christians and Jews, and a former
member of the board of directors of the American Cancer Society. Mr. Burck
graduated from The University of Texas at Austin in 1956 with a B.B.A. He also
attended the South Texas School of Law in Houston.

Cydney Donnell has agreed to serve as an Independent Director of the Company
upon the consummation of this Offering. Ms. Donnell is currently a Visiting
Lecturer at the Mays Business School of Texas A&M University where she teaches
courses in the Finance Department. Ms. Donnell is a Principal of European
Investors, Inc. ("EII") through July 2004 and E.I.I. Realty Securities, Inc. As
a Managing Director of EII from 1992, she served the firm in many capacities.
Specifically, from 2002 to 2003, Ms. Donnell served as Chair of the Investment
Committee of EII. From 1992 to 2002, Ms. Donnell served as the Head of the Real
Estate Securities Group and Portfolio Manager of EII. From 1986 to 1992, Ms.
Donnell served as a Vice-President and Analyst of EII. Ms. Donnell is a member
of the board of directors of European Investors Holding Company. Ms. Donnell
has served on the Board and Institutional Advisory Committee of NAREIT. She is
an active volunteer currently serving on the Board of Directors of the
Association of Former Students of Texas A&M University and served in various
leadership capacities for the Junior League of the City of New York. Ms.
Donnell received a B.B.A. from Texas A&M University in 1981 and an M.B.A. from
Southern Methodist University in 1982.

Winston W. Walker has agreed to serve as an Independent Director of the Company
upon the consummation of this Offering. Mr. Walker currently serves as
President and Chief Executive Officer of Walker & Associates, which provides
strategic consultation primarily to clients in the healthcare

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and insurance industries. Prior to forming Walker and Associates in 1993, Mr.
Walker served as the Chief Executive Officer of Provident Life and Accident
Insurance Company of America ("Provident"). Mr Walker joined Provident in 1974
and was named Associate Actuary of the company's group pension subsidiary in
1975 and Vice President of Administration in 1978. He was promoted to President
of Provident National in 1980 and President of Provident General Insurance
Company in 1984. He was then elected Corporate Executive Vice President in
1985, Chief Financial Officer in 1986 and Chief Executive Officer in 1988.
Prior to joining Provident, he was a member of the mathematics faculty at Wake
Forest University from 1969-1973. Mr. Walker is currently a member of the board
of directors and the audit committee chair of CBL & Associates Properties,
Inc., a member of the board of directors of Olan Mills, Inc. and a member of
the board of directors of MRI Medical. Mr. Walker received a B.A. in Russian
from Tulane University in 1965 and a Ph.D in mathematics from the University of
Georgia in 1969.

G. Steven Dawson has agreed to serve as an Independent Director of the Company
upon the consummation of this Offering. From 1990 to 2003, he served as the
Chief Financial Officer of Camden Property Trust (NYSE: CPT) and its
predecessors. Camden is a large multifamily REIT based in Houston with apartment
operations, construction, and development activities throughout the southern
United States. Mr. Dawson serves on the boards of US Restaurant Properties, Inc.
(NYSE: USV, based in Dallas) as audit committee chair, AmREIT (AMEX: AMY, based
in Houston) as audit and compensation committee chair, Desert Capital REIT, Inc.
(an unlisted, public mortgage REIT based in Las Vegas), Medical Properties Trust
(a REIT based in Birmingham) as audit committee chair, and a private
Houston-based national cabling & electrical contracting company. He generally
serves on the audit committees as chairman on most of these, and also serves on
compensation committees, nominating/governance committees, special committees,
and in the case of AmREIT, as the lead outside director. In addition, he is on
the boards of various charities and civic organizations and has other private
interests. Mr. Dawson holds a degree in Business from Texas A&M University, and
though he is no longer a CPA, he is a member of the American Institute of
Certified Public Accountants.

Edward Lowenthal is President of Ackerman Management LLC, a private investment
management and advisory company with particular focus on real estate and other
asset-based investments. Mr. Lowenthal was a Founder and served as the
President of Wellsford Real Properties, Inc. (WRP) from 1997 until 2002. WRP,
listed on the American Stock Exchange, manages primarily multifamily and office
properties as well as real estate debt held directly and through joint ventures
with institutional partners. He continues to serve as a Director of WRP. Mr.
Lowenthal was a Founder, Trustee and President of Wellsford Residential
Property Trust, a NYSE listed multi-family real estate investment trust, until
May 1997 when it was merged into Equity Residential Properties Trust. Mr.
Lowenthal has more than 30 years of real estate and merger and acquisition
experience in both public and private entities. Mr. Lowenthal serves as a
Trustee of Omega Healthcare Investors, Inc., and as a Director of Reis, Inc., a
privately held real estate information and analytics provider. He has
previously served as a director or trustee of other public and private
companies including Equity Residential (1997-2003). Mr. Lowenthal serves as a
Trustee of The Manhattan School of Music and serves on its Finance and
Executive Committees and chairs its New Building Committee. He served as a
member of the Board of Governors of the National Association of Real Estate
Investment Trusts (NAREIT) from 1992-2000. He earned a B.A. degree from Case
Western Reserve University in 1966 and a J.D. degree from Georgetown University
Law Center in 1969 where he was an editor of the Georgetown University Law
Journal.

Scott H. Rechler has agreed to serve as a director of the Company upon the
consummation of this Offering. Mr. Rechler has served as Chief Executive
Officer and President of Reckson since December 2003, served as Co-Chief
Executive Officer of Reckson from May 1999 until December 2003, serves as the
Chairman of the Executive Committee of the Board of Directors of Reckson and
has served as a director of Reckson since its formation. He served as President
of Reckson from February 1997 to May 2001 and served as Chief Operating Officer
of Reckson from its formation until May 1999. In addition, from Reckson's
formation until February 1997, Mr. Rechler served as Executive Vice President
of Reckson. Mr. Rechler has been employed at Reckson since 1989.

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Mr. Rechler has overseen in excess of $2.5 billion in acquisitions and
developments since joining Reckson. Mr. Rechler is a member of the Board of
Directors of the Long Island Children's Museum and is a member of the Board of
Governors of the National Association of Real Estate Investment Trusts. Since
1997, Mr. Rechler has served as Chief Executive Officer and Chairman of the
Board of Directors of Frontline, and also served as the non-executive Chairman
of the Board of Directors and as former interim executive officer of HQ Global
Holdings, Inc.; both companies have filed for protection from creditors under
the federal bankruptcy laws. Mr. Rechler is a graduate of Clark University and
received a Master's Degree in Finance with a specialization in real estate from
New York University.

Mark J. Hager serves as our Executive Vice President and Chief Financial
Officer. Mr. Hager joined us in August 1999 as Senior Vice President and Chief
Financial Officer and is responsible for our accounting, tax, corporate
finance, human resources, information technology, treasury and risk management
functions and during his tenure has led the establishment of these functions
during our most significant period of growth. Prior to joining us, Mr. Hager
was a Certified Public Accountant in the assurance practice of Ernst & Young
from November 1997 to August 1999, serving both public and private clients. In
other positions, including Vice President Finance and Chief Financial Officer
for Oklahoma Christian University from 1996 to 1997 and Vice President,
Corporate Controller for Crested Butte Mountain resort from 1994 to 1996, Mr.
Hager has been involved in development and financing in the hotel,
single-family residential, and assisted living sectors utilizing conventional,
tax-exempt, and public/private financing structures. Mr. Hager also held
positions in the audit practices of Grant Thornton and Price Waterhouse. Mr.
Hager holds a bachelors degree in Business Administration - Accounting from
Abilene Christian University. Mr. Hager is a Certified Public Accountant
licensed in Texas and Oklahoma.

Greg A. Dowell serves as our Senior Vice President and Chief of Operations. Mr.
Dowell joined us in October 2001 as Senior Vice President - Management Services
and in that role has directed all aspects of the Company's property management
operations. Prior to joining us, Mr. Dowell was employed by Century Development
from 1991 to 2001 where he began his tenure as accountant and ultimately served
as Senior Vice President over the operations of their 29 property student
housing portfolio. Prior to his employment at Century Development, Mr. Dowell
was an accountant with Belin and Associates, a prominent developer of master
planned communities in the Houston area. Mr. Dowell received a BS in Accounting
from the University of Louisiana, Lafayette in 1989 and is a Certified Public
Accountant licensed in Texas.

Ronnie L. Macejewski serves as our Senior Vice President - Development and
Construction and oversees third party development and construction management
services. Mr. Macejewski joined us in January 1996 as Vice President -
Construction and was promoted to Senior Vice President - Development and
Construction in January 2002. During his tenure with us, Mr. Macejewski has
supervised the successful completion of 22 projects totaling approximately $403
million in development costs. Prior to joining us, Mr. Macejewski held
construction management positions with Century Development from 1990 to 1996.
In his career, Mr. Macejewski has successfully completed 34 projects consisting
of more than 18,000 beds. Mr. Macejewski received a BS in Business
Administration from the University of Oklahoma in 1992.

Brian N. Winger serves as our Senior Vice President - Development and is
primarily responsible for coordinating, financing, and closing our on-campus
development projects. Mr. Winger joined us in March 2000 as Director -
On-Campus Development and has since served in increasing capacities and was
promoted to Senior Vice President - Development in October 2003. During his
tenure with us, Mr. Winger has closed 16 on-campus development projects with
financing totaling approximately $405 million. Prior to joining us, Mr. Winger
was the Chief Operating Officer with Aspen Gold Development Company (a private
real estate developer) from 1999 to 2000. From 1996 to 1999, he was an
endowment development officer and ultimately served as General Counsel for
Oklahoma Christian University. From 1994 to 1996, Mr. Winger was a real estate
analyst with Kabili & Company. Mr. Winger received a Juris Doctor from Oklahoma
City University in 1994 and a BS in history/pre-law from Oklahoma Christian
University in 1990. Mr. Winger is a licensed attorney in Oklahoma and a real
estate broker licensed to practice in Oklahoma and Colorado.

135

Jason R. Wills serves as our Senior Vice President - Marketing and Business
Development and oversees all aspects of property leasing and marketing, as well
as corporate communications and public relations. Mr. Wills joined us in
February 1997 as Manager - Marketing and Leasing and has served in increasing
capacities, achieving his current position of Senior Vice President - Marketing
and Business Development in October of 2003. While serving as Vice President of
On-Campus Business Development in 1999 through 2003, Mr. Wills has generated
on-campus development business awards in excess of $350 million and more than
7,000 beds. Mr. Wills began his career in student housing with Century
Development, where he held the positions of Resident Assistant and Marketing
Coordinator in 1993. Mr. Wills attended the University of Texas, Arlington
where he studied Journalism and Marketing.

BOARD COMMITTEES

Following this Offering, our board of directors will have appointed a
nominating and corporate governance committee, an audit committee and a
compensation committee. Under our bylaws, the composition of each committee
must comply with the listing requirements and other rules and regulations of
the New York Stock Exchange, or NYSE, as amended or modified from time to time.
Each of these committees will have at least three directors and will be
composed exclusively of independent directors. Our bylaws define "independent
director" by reference to the rules, regulations and listing qualifications of
the New York Stock Exchange, which generally deem a director to be independent
if such director has no relationship to us or to the members of our management
that may interfere with the exercise of the director's independence from
management and has not had such a relationship in the recent past.

Audit Committee. Our audit committee will help oversee the qualifications and
independence of our independent auditors as well as the performance of our
internal audit function and our independent auditors. The audit committee will
select, assist and meet with the independent auditor, oversee each annual audit
and quarterly review, oversee our internal audit controls and prepare the
report that federal securities laws require be included in our annual proxy
statement. Following this Offering, will have been designated as
chair and and will have been appointed as members of
our audit committee.

Compensation Committee. Our compensation committee will review and approve the
compensation and benefits of our executive officers, administer and make
recommendations to our board of directors regarding our compensation and stock
incentive plans, produce an annual report on executive compensation for
inclusion in our proxy statement and publish an annual committee report for our
stockholders. Following this Offering, will have been
designated as chair and and will have been appointed
as members of our compensation committee.

Nominating and Corporate Governance Committee. Our nominating and corporate
governance committee will develop and recommend to our board of directors a set
of corporate governance principles, a code of ethics and policies with respect
to conflicts of interest; monitor our compliance with corporate governance
requirements of state and federal law and the rules and regulations of the
NYSE; recommend criteria for prospective members of our board of directors;
conduct candidate searches and interviews as directed by our board of
directors; evaluate our board of directors and management; evaluate from time
to time the appropriate size and composition of our board of directors and
recommend, as appropriate, increases, decreases and changes in the composition
of our board of directors; and recommend to the board of directors the slate of
directors to be elected at each annual meeting of our stockholders. Following
this Offering, will have been designated as chair and
and will have been appointed as members of our
nominating and corporate governance committee.

Our board of directors may from time to time establish certain other committees
to facilitate the management of our Company and may change the responsibilities
of the board's existing committees.

136

COMPENSATION OF DIRECTORS

Upon consummation of this Offering, each of our directors who is not an
employee of our Company or our subsidiaries will receive an annual fee of
$ for services as a director, payable quarterly. Our chairman of the
board will receive an additional annual fee of $ but will not be entitled
to receive any other committee meeting fees. Directors who serve on our audit,
nominating and corporate governance and/or compensation committees will receive
a fee of $ for each committee meeting attended in person or $ for
each committee meeting attended by conference telephone or similar
communications equipment, except that in lieu of such meeting fee for audit
committee meetings, the chair of our audit committee will receive a monthly fee
of $ . Directors who are employees of our Company or our subsidiaries will
not receive compensation for their services as directors.

Our 2004 incentive award plan provides for formula grants of restricted stock
units to non-employee directors on and after the consummation of this Offering.
On the date of the closing of this Offering, each non-employee director will
receive $ of restricted stock units valued at the Offering price.
Thereafter, on the date of each annual meeting of stockholders at which each
non-employee director is reelected to our board of directors, such non-employee
director will receive $ of restricted stock units valued at 100% of the
fair market value of our common stock on the date of grant. Similarly, each
non-employee director who is initially elected to our board of directors after
this Offering will receive $ of restricted stock units on the date of
such initial election and $ of restricted stock units on the date of each
annual meeting of stockholders at which the non-employee director is reelected
to our board of directors, in each case valued at 100% of the fair market value
of our common stock on the date of grant. Shares underlying restricted stock
units granted to directors may be sold only after the third anniversary of the
date of the grant. Mr. Rechler has agreed to waive receipt of any director
compensation until such time as he has been reelected by our public
stockholders.

EXECUTIVE OFFICER COMPENSATION

The following table sets forth the annual base salary and other compensation
paid to our Chief Executive Officer, our other executive officers, and certain
other senior officers. We have entered into employment-related agreements with
our executive officers which will become effective upon the consummation of
this Offering. Under the terms of their respective employment agreements, each
executive officer will be eligible to receive annual performance based bonuses
under our incentive bonus plan as more fully described in "-- Employment
Agreements."

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SUMMARY COMPENSATION TABLE (1)

ANNUAL
COMPENSATION (2)
--------------------------
BASE CASH
YEAR SALARY BONUS
---------- ------------ -----------

William C. Bayless, Jr.* ........................... 2003 (3) $ 210,000 $ 80,000
Chief Executive Officer, 2002 (3) $ 200,000 $ 80,000
President and Director 2001 (3) $ 167,000 $ 101,000
Brian B. Nickel* ................................... 2003 $ 175,000 $ 100,000
Executive Vice President, 2002 $ 153,500 $ 155,490
Chief Investment Officer and Director 2001 $ 140,333 $ 109,000
Mark J. Hager* ..................................... 2003 $ 132,500 $ 50,000
Executive Vice President and Chief Financial Officer 2002 $ 128,116 $ 40,000
2001 $ 123,188 $ 45,000
Ronnie Macejewski .................................. 2003 $ 123,000 $ 90,000
Senior Vice President, 2002 $ 118,976 $ 48,813
Development and Construction 2001 $ 114,400 $ 59,948

- ----------------
* Executive Officers

(1) The table set forth above does not reflect aggregate salary and bonus
earned by our former Chief Executive Officer that totaled $416,000,
$350,000 and $336,000 in 2003, 2002 and 2001, respectively. Our former
Chief Executive Officer is entitled to receive certain severance payments
through 2006 totaling approximately $1 million; these amounts have been
previously accrued for financial reporting purposes in 2003.

(2) In addition to the above scheduled compensation, all of our employees
(including the executive officers and members of senior management)
receive certain standard benefits, including Company contributions toward
medical insurance and term life insurance, dental and vision, and access
to an employee assistance program.

(3) Mr. Bayless became our Chief Executive Officer and President in October
2003. Prior to October 2003, Mr. Bayless was our Chief Operating Officer
and Executive Vice President.

Our executive officers and certain of our senior officers owned a promoted
interest in our Predecessor Entities. As a result of the formation
transactions, this interest was unrealized and was therefore extinguished.

2004 INCENTIVE PLAN

We have adopted the American Campus Communities, Inc. 2004 Incentive Plan,
which provides for the grant to selected employees and directors of our Company
and our affiliates of stock options, PIUs, restricted stock units (or RSUs),
restricted stock, and other stock-based incentive awards. Only employees of our
Company and its affiliates (including, without limitation, employees of our
Services Company) are eligible to receive "incentive stock options" under the
plan. We have reserved a total of shares of our common stock for
issuance pursuant to the plan, subject to certain adjustments for changes in
our capital structure, including by reason of stock dividends, stock splits,
reverse stock splits, recapitalizations, reorganizations, mergers,
consolidations, combinations, exchanges. Of this amount, the following will be
issued upon consummation of this Offering:

o profits interest units of our Operating Partnership, that are
exchangeable for shares of our common stock, will be issued to our
executive officers and certain of our senior officers. See "-- Profits
Interest Units" below for a description of these securities; and

o restricted stock units representing shares of our common stock,
which will be issued to our independent directors as compensation. See
"-- Restricted Stock and Restricted Stock Units" below for a description
of these securities.

Additionally, shares of our common stock will initially be reserved for
issuance to our executive officers and certain senior officers in the event
that our Compensation Committee, in its sole discretion, elects to pay any
outperformance awards due to these officers in stock rather than cash. See "--
Employment Agreements -- Outperformance Awards" below for a description of
these awards;

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Effective as of the consummation of this Offering, our board of directors
intends to delegate general administrative authority of the plan to its
compensation committee.

The exercise price of nonqualified stock options and incentive stock options
granted under the incentive award plan must be at least 85% and 100%,
respectively, of the fair market value of our common stock on the date of
grant. However, incentive stock options granted to optionees who own more than
10% of our outstanding common stock on the date of grant must have an exercise
price that is at least 110% of fair market value of our common stock on the
grant date. Incentive stock options granted under the plan will expire no later
than ten years after the date of grant, or five years after the date of grant
with respect to optionees who own more than 10% of our outstanding common stock
on the grant date.

In the event of certain corporate events, including certain mergers, the sale
of all or substantially all of the assets of the Company, or the reorganization
or liquidation of the Company, the committee may, in its discretion, provide
that all outstanding awards will terminate as of the consummation of such
corporate event, and (x) accelerate the exercisability of, or cause all vesting
restrictions to lapse on, all outstanding awards to a date at least ten days
prior to the date of such corporate event and/or (y) provide that holders of
awards will receive a payment in respect of cancellation of their awards based
on the amount (if any) by which the per share consideration being paid for the
Company's common stock in connection with such corporate event exceeds the
applicable exercise price. In addition, the committee may, in its discretion,
provide that all outstanding awards will vest upon any "change in control" of
the Company (as defined in the plan).

Our board of directors may amend the plan at any time; provided, however, that
without further stockholder approval, the board may not make any amendment to
the plan which would increase the maximum number of shares of common stock
which may be issued pursuant to the plan, except as contemplated by adjustment
provisions for changes in capital structure, or which would otherwise violate
the shareholder approval requirements of the national securities exchange on
which the common stock is listed or Nasdaq, as applicable.

The incentive award plan also provides that no participant in the plan will be
permitted to acquire, or will have any rights to acquire, shares thereunder if
such acquisition would be prohibited by the stock ownership limits contained in
our Charter or by any other provision hereof.

We intend to file with the Securities and Exchange Commission a Registration
Statement on Form S-8 covering the shares of our common stock issuable under
the incentive award plan.

RESTRICTED STOCK AND RESTRICTED STOCK UNITS

Under our 2004 Incentive Plan, our compensation committee may award restricted
shares of our common stock and RSUs, to directors, executive officers and
eligible employees, subject to conditions and restrictions determined by our
compensation committee. RSUs are essentially the same as restricted stock
except that instead of actual shares, RSUs represent a promise to pay out
shares at some future date. RSUs have a tax advantage over restricted stock
because the recipient is not taxed at the time of vesting (as with restricted
stock) but only when the shares are actually received.

PROFITS INTEREST UNITS

Profits Interest Units, or PIUs, are a special class of partnership interests
in the Operating Partnership. Each PIU awarded will be deemed equivalent to an
award of one share of our common stock under our 2004 Incentive Plan, reducing
availability for other equity awards on a one-for-one basis. PIUs, whether
vested or not, will receive the same quarterly per unit distributions as common
units of our Operating Partnership, which equal the per share distributions on
our common stock. This treatment with respect to quarterly distributions is
similar to the expected treatment of our restricted stock awards and RSUs,
which will generally receive full distributions whether the PIUs have been
vested or not. PIUs vest in accordance with each holder's PIU Vesting
Agreement. All PIUs issued on or prior to the effective date will vest on the
effective date.

139

Initially, PIUs will not have full parity with common units with respect to
liquidating distributions. Under the terms of the PIUs, the Operating
Partnership will revalue its assets upon the occurrence of certain "book-up
events", and any increase in valuation from the time of this Offering until
such book-up event will be allocated first to the holders of PIUs to equalize
the capital accounts of such holders with the capital accounts of common unit
holders. These book-up events will occur upon a contribution of cash or
property to the Operating Partnership, including contributions by us of the
proceeds from future issuances of our securities, or upon certain distributions
of cash or property by the Operating Partnership to one or more partners of the
Operating Partnership. Upon equalization of the capital accounts of the holders
of PIUs with the other holders of common units, the PIUs will achieve full
parity with common units of the Operating Partnership for all purposes,
including with respect to liquidating distributions. If such parity is reached,
vested PIUs will thereafter be automatically converted into an equal number of
common units. Although we believe it likely that equalization will occur and
the PIUs will be converted into common units of our Operating Partnership,
there are circumstances under which such equalization would not be achieved and
the PIUs would therefore not achieve parity with respect to liquidating
distributions. Until and unless such parity is reached, the value that may be
realized for a given number of vested PIUs will likely be less than the value
of an equal number of shares of our common stock.

Unlike RSUs, the grant or vesting of PIUs is not expected to be a taxable
transaction to recipients. Therefore, a recipient who wishes to hold incentive
equity awards for the long term may be able to do so more efficiently with PIUs
and ultimately enjoy a greater after-tax return when disposing of them.
Conversely, we will not receive any tax deduction for compensation expense from
the grant of PIUs.

AMERICAN CAMPUS PARTNERS, LLC

Certain current and former members of our executives and senior management have
a carried interest in our Predecessor Entities through their ownership in
American Campus Partners, LLC or "ACP". ACP is entitled to a 28% interest in
our Predecessor Entities after receipt by RAP and RSVP of a cumulative
preferred return on their invested capital.

At the mid-point of the ranges of prices indicated on the front cover of this
prospectus, ACP is expected to receive $ of the $ cash redemption amount to be
paid in the formation transactions to RAP. Such proceeds will be allocated
among the holders of membership interests in ACP approximately as follows:

PERCENTAGE OF
EMPLOYEES DISTRIBUTION DISTRIBUTION
--------- -------------- --------------

Senior Officer 1 .............. %
Senior Officer 2 .............. %
Senior Officer 3 .............. %
Other Senior Officers ......... %
Other Employees ............... %
Former Employees .............. %

All of the named employees in the above table have agreed to use their cash
distribution from ACP, net of applicable taxes, to purchase common stock in
this Offering.

EMPLOYMENT AGREEMENTS

NEW EMPLOYMENT AGREEMENTS

We have entered into new employment agreements, effective as of the
consummation of this Offering, with Messrs. William C. Bayless Jr., Brian B.
Nickel and Mark J. Hager. The employment agreements provide for Mr. Bayless to
serve as a member of our board and our Chief Executive Officer and President,
Mr. Nickel to serve as a member of our board and our Executive Vice President
and Chief Investment Officer, and Mr. Hager to serve as our Executive Vice
President and

140

Chief Financial Officer. These employment agreements require Messrs. Bayless,
Nickel and Hager, as applicable, to devote substantially full-time attention
and business time to our affairs. The term of each agreement will end upon an
executive's termination of employment as discussed below.

The employment agreements provide for:

o an annual base salary of $300,000, $250,000 and $200,000 for Messrs.
Bayless, Nickel and Hager, respectively, subject in each case to
increase in accordance with our normal executive compensation
practices;

o eligibility for annual cash performance bonuses determined by the
Board, in accordance with the terms of a bonus plan to be adopted by
the Board and on the same basis as other executives of the Company
(with appropriate adjustments due to title and salary); and

o participation in other employee benefit plans applicable generally to
our senior executives.

Under the terms of their respective employment agreements, upon the
consummation of this Offering, Mr. Bayless will be granted PIUs
(representing a % interest in our Operating Partnership and worth $
valued at the offering price of our common stock), Mr. Nickel will be granted
PIUs (representing a % interest in our Operating Partnership and Mr.
Hager will be granted PIUs (representing a % interest in our Operating
Partnership). Four other members of our senior management and certain other key
employees will be granted a total of PIUs representing in the aggregate a
% interest in our Operating Partnership. These PIUs are not subject to any
vesting period or requirement.

The employment agreements provide that, if an executive's employment is
terminated by us without "cause" or by the executive for "good reason" (each as
defined in the applicable employment agreement), the executive will be entitled
to the following severance payments and benefits, subject to his execution and
non-revocation of a general release of claims:

o a cash payment equal to 299%, 200% and 100% times the sum of his
then-current annual base salary plus the average annual bonus paid or
payable in respect of the last prior three years for Messrs. Bayless,
Nickel and Hager, respectively, payable over the remaining term of his
non-competition agreement;

o his prorated annual bonus for the year in which the termination
occurs; and

o health benefits for two years following the executive's termination of
employment at the same cost to the executive as in effect immediately
preceding such termination, subject to reduction to the extent that
the executive receives comparable benefits from a subsequent employer.

OUTPERFORMANCE AWARD

Upon the consummation of this Offering, we will grant to our executive officers
and certain of our key employees a special award that will be based upon their
continued service and attaining certain performance measures. This special
award will consist of a bonus pool equal to the value on the date of vesting of
shares of common stock (representing 3% of our shares of common stock
and 1% PIUs that will be outstanding immediately following this Offering). No
dividends or dividend equivalent payments will accrue with respect to the
shares of common stock underlying this bonus pool. Vesting of the award will
occur on the third anniversary of this Offering provided that the following has
occurred:

o the designated recipient has remained in continuous employment with us
or our affiliates until such date, and

o achievement of at least one of the following performance measures:

o Primary Performance Measure. Total return (stock appreciation plus
dividends) of at least 25% per annum (cumulative non-compounded) for
purchasers of our shares in this Offering who have held their shares
through such date.

141

o Alternate Performance Measure. Total return (stock appreciation plus
dividends) of at least 12% per annum (cumulative non-compounded) for
purchasers of our shares in this Offering who have held their shares
through such date, and such return is at or above the 60th percentile
of the total return to stockholders achieved by members of a group of
designated "peer" companies during the same period.

Any individual award that becomes unvested as a result of an early termination
of employment will be reallocated among the remaining recipients. In the event
of a change of control of our Company, or termination of employment by us other
than for "cause" or by a designated recipient for "good reason", the special
award will be fully vested at that time (with the value of the bonus pool to be
determined at that time for any affected award recipient) if the Primary
Performance Measure has been achieved. Otherwise, a portion (but not less than
50%) of the special award (equal to the portion of the initial 3-year vesting
period that has elapsed) will be vested at that time if the Alternate
Performance Measure has been achieved.

Payments of vested awards will be made within 120 days of vesting. Such
payments will be paid in cash; however, the Compensation Committee of the Board
may, in its sole discretion, elect to pay such an award through the issuance of
shares of common stock, Units, PIUs or similar securities (provided that such
issuance will not result in any recognition of taxable income by the
recipient), valued at the date of issuance, provided that such securities are
available at that time under any of the Company's existing stock option plans.

NON-COMPETITION AGREEMENTS

We have entered into non-competition agreements with each of Messrs. Bayless,
Nickel and Hager under which they have covenanted not to (i) conduct, directly
or indirectly, any business involving the development, acquisition, sale or
management of on-campus or off-campus student housing properties, whether such
business is conducted by them individually or as principal, partner, officer,
director, consultant, employee, stockholder or manager of any person,
partnership, corporation, limited liability company or any other entity; or
(ii) own interests in student housing properties that are competitive, directly
or indirectly, with any business carried on by us or our successors,
subsidiaries and affiliates. Mr. Bayless will be bound by his non-competition
covenant for so long as he is our Chief Executive Officer and for a two-year
"tail" period thereafter, unless his employment is terminated by us without
"cause" or by him with "good reason" (in each case, as defined in his
employment agreement) or by him for any reason at any time prior to the one
year anniversary of a change of control of our Company, in which case his
covenant not to compete will lapse upon the one year anniversary of his
termination. Mr. Nickel will be bound by a similar non-competition covenant for
so long as he is our Executive Vice President and Chief Investment Officer and
for a two-year "tail" period thereafter, and Mr. Hager will be bound by a
similar non-competition covenant for so long as he is our Chief Financial
Officer and for a two-year "tail" period thereafter. In addition, the members
of our senior management who are receiving grants of our common stock as well
as any other employees receiving grants of or options for our common stock will
be required to execute a "Restricted Stock Grant Notice" or similar notice
which will include a Non-Competition Agreement that is substantially similar.

INDEMNIFICATION AGREEMENTS

We have entered into indemnification agreements with each of our executive
officers and directors. The indemnification agreements provide that:

If a director or executive officer is a party or is threatened to be made a
party to any proceeding, other than a proceeding by or in the right of our
Company, by reason of such director's or executive officer's status as a
director, officer or employee of our Company, we must indemnify such director
or executive officer for all expenses and liabilities actually and reasonably
incurred by him or her, or on his or her behalf, unless it has been established
that:

o 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;

142

o the director or executive officer actually received an improper
personal benefit in money, property or other services; or

o 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.

If a director or executive officer is a party or is threatened to be made a
party to any proceeding by or in the right of our Company to procure a judgment
in our Company's favor by reason of such director's or executive officer's
status as a director, officer or employee of our Company, we must indemnify
such director or executive officer for all expenses and liabilities actually
and reasonably incurred by him or her, or on his or her behalf, unless it has
been established that:

o the director or executive officer actually received an improper
personal benefit in money, property or other services;

provided, however, that we will have no obligation to indemnify such director
or executive officer for all expenses and liabilities actually and reasonably
incurred by him or her, or on his or her behalf, if it has been adjudged that
such director or executive officer is liable to us with respect to such
proceeding.

Upon application of a director or executive officer of our Company to a court
of appropriate jurisdiction, the court may order indemnification of such
director or executive officer if:

o 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, and the
Maryland Revised Uniform Limited Partnership Act), in which case the
director or executive officer shall be entitled to recover from us the
expenses of securing such indemnification; or

o 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.

Notwithstanding, and without limiting, any other provisions of the agreements,
if a director or executive officer is a party or is threatened to be made a
party to any proceeding by reason of such director's or executive officer's
status as a director, officer or employee of our Company, and such director or
executive officer is successful, on the merits or otherwise, as to one or more
but less than all claims, issues or matters in such proceeding, we must
indemnify such director or executive officer for all expenses actually and
reasonably incurred by him or her, or on his or her behalf, in connection with
each successfully resolved claim, issue or matter, including any claim, issue
or matter in such a proceeding that is terminated by dismissal, with or without
prejudice.

We must pay all indemnifiable expenses in advance of the final disposition of
any proceeding if the director or executive officer furnishes us with a written
affirmation of the director's or executive officer's good faith belief that the
standard of conduct necessary for indemnification by our Company has been met
and a written undertaking to reimburse us if a court of competent jurisdiction
determines that the director or executive officer is not entitled to
indemnification.

143

We must pay all indemnifiable expenses to the director or executive officer
within 20 calendar days following the date the director or executive officer
submits proof of the expenses to us.

Insofar as indemnification for liabilities arising under the Securities Act,
may be permitted to directors, officers or persons controlling the registrant
pursuant to the foregoing provisions, the registrant has been informed that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is therefore unenforceable.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

There are no compensation committee interlocks and none of our employees
participate on the compensation committee.

144

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

FORMATION TRANSACTIONS

The initial public offering price of our common stock was determined in
consultation with the underwriters. Among the factors that were considered were

o our record of operations,

o our management,

o our estimated net income,

o our estimated funds from operations,

o our estimated cash available for distribution,

o our anticipated distribution yield,

o our growth prospects,

o the current market valuations, financial performance and distribution
yields of publicly traded companies considered by us and the
underwriters to be comparable to us, and

o the current state of the commercial real estate industry and the
economy as a whole.

The Offering price does not necessarily bear any relationship to our book value
or the fair market value of our assets. The aggregate historical combined net
tangible book value of the interests and assets that will be owned by us
immediately following consummation of this Offering was approximately
$ as of , 2004. We have not obtained any recent third party
appraisals of these interests or assets. As a result, the consideration to be
paid by us for the redemption of the interests of RAP and RSVP in our
Predecessor Entities may exceed the fair market value of these interests. See
"Structure and Formation of Our Company -- Determination of Offering Price."

DESCRIPTION OF CONTRIBUTION AGREEMENT

In connection with the Formation Transactions, we, our Operating Partnership,
RAP and RSVP have entered into a Contribution Agreement that, among other
things, provides as follows:

Transactions among RAP and RSVP

o RSVP will contribute its interests in ACCL and in the entities owning
University Village at TU to RAP in exchange for membership interests
in RAP. These membership interests will be redeemed by RAP with the
proceeds received by RAP from the redemption of its interests in
RAPSH.

o RAP will contribute its interests in ACCL and the entities owning
University Village at TU to its wholly-owned subsidiary, RAPSH.

Transactions among us, RAPSH, RSVP and RAP

o We will contribute the net Offering proceeds to our Operating
Partnership.

o Our Operating Partnership will redeem RAP's entire interest in RAPSH
by:

o payment to RAP of $ million in cash (approximately __% of the
Offering proceeds). This amount will be increased or decreased,
respectively, depending upon whether the shares in this Offering
are sold above or below $20 per share (the mid-point in the range
referred to on the cover of this prospectus);

o distributing to a newly-formed entity owned by RAP and RSVP and
controlled by RSVP all of RAPSH's interests in the entities
owning The Village at Riverside; and

145

o distributing to a newly-formed entity affiliated with RAP, RSVP
and Titan fee title to a parcel of land adjacent to the
University Village at San Bernardino. This parcel of land is
zoned for commercial development and is currently under a letter
of intent to be sold to an unaffiliated purchaser for a purchase
price of $____. RAPSH will also distribute to this entity all of
the interests in the 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).

o Up to $ million of the proceeds of the Offering will be used to
complete the construction of our three properties (University Village
at TU, University Village at Fresno and University Village at San
Bernardino) scheduled to be completed and opened in August 2004 with
any remaining proceeds after such completion currently estimated to be
approximately $2 million being distributed to RAP and RSVP.
Additionally, any insurance proceeds that we receive after the date of
this Offering with respect to our claims related to the Fresno State
fire may also be used for unanticipated cost overruns at University
Village at TU or, absent such overruns, will be distributed to RAP and
RSVP.

o RAPSH will continue to remain liable for its pre-existing guarantee of
certain contingent obligations of RAP and RSVP under the non-recourse
mortgage indebtedness, encumbering the Village at Riverside,
including, among other things, that proceeds from the operation or
disposition of the property will first be applied to the property's
upkeep or to payment of the property's mortgage indebtedness. RAP and
RSVP may not sell the property to a third party or terminate us as
managers of the property for so long as this guarantee remains
outstanding, and following expiration of the guarantee will use
commercially reasonable efforts to ensure that we remain the property
manager during their continued ownership of the property and as part
of any sale of the property to a third party. While we cannot predict
with certainty the amount of losses, if any, that we may incur under
this guarantee, we do not believe that they will be material.

o RAP and RSVP will grant us an option to acquire their indirect 100%
ownership interest in the Village at Riverside for a cash price
(including the balance of any indebtedness which will be assumed)
equal to the property's most recent net operating income (before debt
service) over the preceding four calendar quarters divided by an 8%
"cap" rate, but in no case less than $12 million during the option's
first 24 months and $13 million during the option's last 24 months.
This option price will be reduced by the amount of any payment made by
us to the property's mortgagee under our guarantee. Based on the
property's net operating income over the preceding four calendar
quarters, the option price would have been $ million before taking
into account the minimum price. Our option expires four years from
completion of this Offering but may expire earlier if the property is
sold to a third party following our election not to exercise our right
of first offer.

o RSVP will grant us an option to acquire its indirect 23% ownership
interest in Dobie Center. The option price will be based on a $52.0
million valuation of the property less the then outstanding debt,
which on June 1, 2004 was approximately $42.8 million, resulting in a
$2.1 million option price for RSVP's 23% interest at the property's
current debt level. Our option expires four years from completion of
this Offering but may expire earlier if title to the Dobie Center is
transferred to a third party. RSVP will use its best efforts to ensure
that we remain the property manager for the Dobie Center, during
RSVP's continued ownership of its interest in the property, and will
use commercially reasonable efforts to ensure that we remain the
property manager as part of any sale of the property to a third party.

o RAP and RSVP will provide us and the underwriters of this Offering
with certain limited representations, warranties and indemnities with
respect to their ownership of their partnership interests being
contributed to or redeemed by our Operating Partnership and certain
other matters.

146

o We have agreed to nominate Mr. Scott Rechler to be a director of our
board of directors at each annual meeting for the next three years,
subject to his consent and eligibility to serve. Mr. Rechler has
agreed to waive receipt of any director compensation until such time
as he has been reelected by our public stockholders . Mr. Rechler is
the Chief Executive Officer and President of Reckson, and the Chief
Executive Officer and sole director of FrontLine Capital Group.
FrontLine is the indirect parent of RSVP. Reckson is the indirect
non-controlling majority owner of RAP and the largest creditor of
FrontLine. In 2002, FrontLine filed for protection from creditors
under the federal bankruptcy laws.

TITAN AGREEMENTS

We have entered into an agreement with Titan for the purchase of Titan's
minority interests in the American Campus - Titan Properties. Titan will
receive approximately $5.7 million in cash in exchange for its interests and
will provide us with customary representations, warranties and indemnities. We
have also entered into an agreement with Titan with respect to prospective
development projects to be owned jointly by us. See "Business and Properties --
Our Properties -- American Campus - Titan Joint Venture." Our respective
undertakings under these agreements are subject, among other things, to the due
execution and closing of the contribution agreement with RAP and RSVP
(described above) and the successful consummation of this Offering.

EMPLOYMENT AGREEMENTS

We have entered into employment agreements with our executive officers as
described in "Management -- Employment Agreements" that will become effective
upon the consummation of this Offering. These agreements provide for salary,
bonuses and other benefits, including, potentially, severance benefits upon a
termination of employment, as well as for grants of PIUs, cash bonuses and
outperformance awards, among other matters. For a full summary of these
agreements, see "Management -- Employment Agreements" above.

147

POLICIES WITH RESPECT TO CERTAIN ACTIVITIES

The following is a discussion of certain of our investment, financing and other
policies. These policies have been adopted by our board of directors and, in
general, may be amended or revised from time to time by our board of directors
without a vote of our stockholders.

INVESTMENT POLICIES

INVESTMENT IN REAL ESTATE OR INTERESTS IN REAL ESTATE

We will conduct all of our investment activities through our Operating
Partnership and its affiliates. Our investment objectives are to provide
quarterly cash distributions and achieve long-term capital appreciation through
increases in the value of our Company. We have not established a specific
policy regarding the relative priority of these investment objectives. For a
discussion of the properties and our acquisition and other strategic
objectives, see "Business and Properties" and "Strategy for Growth."

We expect to pursue our investment objectives primarily through the ownership
by our Operating Partnership of the properties and other acquired properties
and assets. We currently intend to invest primarily in developments of student
housing and acquisitions of existing improved properties or properties in need
of redevelopment and acquisitions of land which we believe has development
potential for student housing. Future investment or development activities will
not be limited to any geographic area, product type or to a specified
percentage of our assets. While we may diversify in terms of property
locations, size and market, we do not have any limit on the amount or
percentage of our assets that may be invested in any one property or any one
geographic area. We intend to engage in such future investment or development
activities in a manner that is consistent with the maintenance of our status as
a REIT for federal income tax purposes. In addition, we may purchase or lease
income-producing commercial and other types of properties for long-term
investment, expand and improve the properties we presently own or other
acquired properties, or sell such properties, in whole or in part, when
circumstances warrant.

We may also participate with third parties in property ownership, through joint
ventures or other types of co-ownership. These types of investments may permit
us to own interests in larger assets without unduly restricting our
diversification and, therefore, provide us with flexibility in structuring our
portfolio. We will not, however, enter into a joint venture or other
partnership arrangement to make an investment that would not otherwise meet our
investment policies.

Equity investments in acquired properties may be subject to existing mortgage
financing and other indebtedness or to new indebtedness, which may be in
acquired properties incurred in connection with acquiring or refinancing these
investments. Debt service on such financing or indebtedness will have a
priority over any distributions with respect to our common stock. We may in the
future acquire some, all or substantially all of the securities or assets of
other REITs or similar entities where that investment would be consistent with
our investment policies. Subject to the limitations imposed by such other REITs
on the ownership of their stock and to the requirement that we satisfy the
asset tests described in "Federal Income Tax Considerations -- Asset Tests,"
there are no limitations on the amount or percentage of our total assets that
may be invested in any one issuer. However, we do not anticipate investing in
other issuers of securities for the purpose of exercising control or acquiring
any investments primarily for sale in the ordinary course of business or
holding any investments with a view to making short-term profits from their
sale. In any event, we do not intend that our investments in securities will
require us to register as an "investment company" under the Investment Company
Act, and we intend to divest securities before any registration would be
required.

INVESTMENTS IN REAL ESTATE MORTGAGES

While our current portfolio consists of, and our business objectives emphasize,
equity investments in real estate, we may, at the discretion of our board of
directors, invest in mortgages and other types of real estate interests
consistent with our qualification as a REIT. We do not presently intend to
invest

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in mortgages or deeds of trust, but may invest in participating or convertible
mortgages if we conclude that we may benefit from the gross revenues or any
appreciation in value of the property. Investments in real estate mortgages run
the risk that one or more borrowers may default under certain mortgages and
that the collateral securing certain mortgages may not be sufficient to enable
us to recoup our full investment.

SECURITIES OF OR INTERESTS IN PERSONS PRIMARILY ENGAGED IN REAL ESTATE
ACTIVITIES AND OTHER ISSUERS

Subject to the percentage of ownership limitations and gross income tests
necessary for REIT qualification, we may invest in securities of other REITs,
other entities engaged in real estate activities or securities of other
issuers, including for the purpose of exercising control over such entities.

DISPOSITIONS

We do not currently intend to dispose of any of our properties, although we
reserve the right to do so if, based upon management's periodic review of our
portfolio, our board of directors determines that such action would be in the
best interest of our stockholders. For example, we may seek to enter into
tax-efficient joint ventures in our stabilized properties with third party
investors to raise low-cost equity capital that we can reinvest in properties
with higher growth potential. Any decision to dispose of a property will be
made by our board of directors.

FINANCING POLICIES

We presently intend to maintain a ratio of our consolidated total
indebtedness-to-total market capitalization of % or less (excluding
indebtedness encumbering our on-campus participating properties or properties
that we subsequently develop or acquire that have similar ownership
structures). For purposes of this calculation, our indebtedness does not
include the indebtedness encumbering our on-campus participating properties or
properties that we subsequently develop or acquire that have similar ownership
structures. Our total market capitalization is defined as the sum of the market
value of our outstanding common stock and preferred stock (which may decrease,
thereby increasing our debt to total capitalization ratio), including shares of
restricted stock or restricted stock units that we may issue to our officers
and directors under our 2004 Incentive Plan, plus the aggregate value of
Operating Partnership units not owned by us, plus the book value of our total
consolidated indebtedness (excluding indebtedness encumbering our on-campus
participating properties or properties that we subsequently develop or acquire
that have similar ownership structures). Since this ratio is based, in part,
upon market values of equity, it will fluctuate with changes in the price of
our common stock; however, we believe that this ratio provides an appropriate
indication of leverage for a company whose assets are primarily real estate. We
expect that our ratio of debt-to-total market capitalization upon consummation
of this Offering will be approximately % ( % if the underwriters'
over-allotment option is exercised in full). Our Charter and bylaws do not
limit the amount or percentage of indebtedness that we may incur. Our board of
directors may from time to time modify our debt policy in light of then-current
economic conditions, relative costs of debt and equity capital, market values
of our properties, general conditions in the market for debt and equity
securities, fluctuations in the market price of our common stock, growth and
acquisition opportunities and other factors. Accordingly, we may increase or
decrease our ratio of debt-to-total market capitalization beyond the limits
described above. If these policies were changed, we could become more highly
leveraged, resulting in an increased risk of default on our obligations and a
related increase in debt service requirements that could adversely affect our
financial condition and results of operations and our ability to pay
distributions to our stockholders. See "Risk Factors -- Risks Related to Our
Properties and Our Business -- Our debt level reduces cash available for
distribution and may expose us to the risk of default under our debt
obligations" and "Management's Discussion and Analysis of Financial Condition
and Results of Operations -- Liquidity and Capital Resources."

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CONFLICT OF INTEREST POLICIES

We have adopted certain policies that are designed to eliminate or minimize
certain potential conflicts of interest. In addition, our board of directors is
subject to certain provisions of Maryland law, which are also designed to
eliminate or minimize conflicts.

However, there can be no assurance that these policies or provisions of law
will always be successful in eliminating the influence of such conflicts, and
if they are not successful, decisions could be made that might fail to reflect
fully the interests of all stockholders.

INTERESTED DIRECTOR AND OFFICER TRANSACTIONS

Pursuant to Maryland Law, a contract or other transaction between us and a
director or between us and any other corporation or other entity in which any
of its directors is a director or has a material financial interest is not void
or voidable solely on the grounds of such common directorship or interest. The
common directorship or interest, the presence of such director at the meeting
at which the contract or transaction is authorized, approved or ratified or the
counting of the director's vote in favor thereof will not render the
transaction void or voidable if:

o 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;

o 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

o the transaction or contract is fair and reasonable to us at the time
it is authorized, ratified or approved.

Furthermore, under Maryland law (where our Operating Partnership is formed),
we, as general partner, have a fiduciary duty to our Operating Partnership and,
consequently, such transactions also are subject to the duties of care and
loyalty. We will adopt a policy which requires that all contracts and
transactions between us, our Operating Partnership or any of our subsidiaries,
on the one hand, and any of our directors or executive officers or any entity
in which such director or executive officer is a director or has a material
financial interest, on the other hand, must be approved by the affirmative vote
of a majority of the disinterested directors. Where appropriate in the judgment
of the disinterested directors, our board of directors may obtain a fairness
opinion or engage independent counsel to represent the interests of
nonaffiliated security holders, although our board of directors will have no
obligation to do so.

BUSINESS OPPORTUNITIES

Pursuant to Maryland law, each director is obligated to offer to us any
business opportunity (with certain limited exceptions) that comes to him and
that we reasonably could be expected to have an interest in pursuing.

POLICIES WITH RESPECT TO OTHER ACTIVITIES

We have authority to offer common stock, preferred stock or options to purchase
stock in exchange for property and to repurchase or otherwise acquire our
common stock or other securities in the open market or otherwise, and we may
engage in such activities in the future. Except in connection with the
formation transactions or employment agreements, we have not issued common
stock, Units or any other securities in exchange for property or any other
purpose, and our board of directors has no present intention of causing us to
repurchase any common stock. We may issue preferred stock from time to time, in
one or more series, as authorized by our board of directors without the need
for stockholder approval. See "Description of Securities -- Preferred Stock."
We have not engaged in

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trading, underwriting or agency distribution or sale of securities of other
issuers other than our Operating Partnership and do not intend to do so. At all
times, we intend to make investments in such a manner as to qualify as a REIT,
unless because of circumstances or changes in the Code, or the Treasury
Regulations, our board of directors determines that it is no longer in our best
interest to qualify as a REIT. We have not made any loans to third parties,
although we may in the future make loans to third parties, including, without
limitation, to joint ventures in which we participate. We intend to make
investments in such a way that we will not be treated as an investment company
under the 1940 Act.

REPORTING POLICIES

After this offering, we will become subject to the full information reporting
requirements of the Securities Exchange Act of 1934, as amended. Pursuant to
these requirements, we will file periodic reports, proxy statements and other
information, including certified financial statements, with the Securities and
Exchange Commission. See "Where You Can Find More Information".

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STRUCTURE AND FORMATION

OUR STRUCTURE

We will elect to be taxed as a REIT for federal income tax purposes commencing
with our tax year ending December 31, 2004. We will own substantially all of
our properties and conduct substantially all of our operations through American
Campus Communities Operating Partnership LP, our Operating Partnership, and its
wholly-owned subsidiary, American Campus Communities Services, Inc., our
Services Company. All of our operating expenses will be borne by our Operating
Partnership or the Services Company, as the case may be. We will be the sole
general partner of our Operating Partnership and, therefore, we will have
control over its management and each of our owned properties. Our Board of
Directors will initially consist of eight directors, at least five of whom are
expected to be classified under applicable New York Stock Exchange listing
standards as "independent" directors. See "Management."

THE OPERATING PARTNERSHIP

Following the consummation of this Offering and the formation transactions,
substantially all of our assets will be held by, and our operations conducted
through, our Operating Partnership. We will own 98.7% of the Units in our
Operating Partnership. Certain of our officers will own Units in the Operating
Partnership representing approximately a 1.3% profit interest. We will be the
sole general partner of our Operating Partnership; accordingly, our board of
directors will effectively direct all of our Operating Partnership's affairs.

THE SERVICES COMPANY

In order to qualify as a REIT, a specified percentage of our gross income must
be derived from real property sources, which would generally exclude our income
from providing development and management services to third parties as well as
our income from certain services afforded student-tenants in our owned
properties. See "Federal Income Tax Considerations -- Taxation of Our Company."
In order to avoid realizing such income in a manner that would adversely affect
our ability to qualify as a REIT, we will provide certain services through our
Services Company, which will elect, together with us, to be treated as our
"taxable REIT subsidiary" or "TRS." See "Federal Income Tax Considerations --
Taxation of Our Company." Our Services Company will be wholly-owned and
controlled by our Operating Partnership. Our on-campus participating properties
will be owned by our Services Company. The income earned by our Services
Company (including income from our on-campus participating properties) will be
subject to regular federal income tax and state and local income tax where
applicable and will therefore be subject to an additional level of tax as
compared to the income earned from our properties.

FORMATION TRANSACTIONS

Prior to or simultaneously with the completion of this Offering, we will engage
in the formation transactions described below. These are designed to:

o consolidate the ownership of our properties and the business of our
Predecessor Entities into our Operating Partnership and Services Company;

o facilitate this Offering;

o repay certain existing property indebtedness; and

o enable us to qualify as a REIT for federal income tax purposes commencing
with the taxable year ending December 31, 2004.

Prior to the formation transactions, most of the interests in our off-campus
properties were owned by RAP Student Housing Properties LLC, a limited
liability company which we refer to as "RAPSH", which was wholly-owned by
Reckson Asset Partners LLC, which we refer to as "RAP." Our

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on-campus participating properties were owned by ACCL. Most of our third party
development, management and leasing services were also provided through ACCL.
Substantially all of the interests in ACCL and an interest in a number of our
off-campus properties were owned by RSVP. Four of our off-campus properties,
three of which are currently under construction, were owned by our American
Campus-Titan joint venture with Titan Investments, an unaffiliated developer;
we refer to our joint venture partner as Titan and to these properties as the
"American Campus - Titan Properties." Our executive officers, certain of our
senior officers and certain of our former employees are the sole members of
ACP, a limited liability company that owns a 28% promoted interest in our
Predecessor Entities.

The following is a current ownership chart of the Predecessor Entities prior to
the formation transactions:

[GRAPHIC OMITTED]

Following are the principal steps in the formation transactions:

o We will issue shares of our common stock in this Offering (or
additional shares if the underwriters exercise their over-allotment
option in full). We will contribute the net proceeds of this Offering to
our Operating Partnership. ACCL will elect to become a corporation, will
be renamed and will serve as our Services Company.

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o We will grant to certain of our senior officers PIUs in our Operating
Partnership representing approximately a 1.3% limited partnership
interest in our Operating Partnership.

o Up to $ million of the proceeds of this Offering will be used to
complete the construction of our three properties (University Village at
TU, University Village at Fresno State and University Village at San
Bernardino) scheduled to be completed and opened in August 2004, with any
remaining proceeds after such completion (currently estimated to be
approximately $2 million) being distributed to RAP and RSVP. Additionally,
any insurance proceeds that we receive after the date of this Offering
with respect to our claims related to the Fresno State fire may also be
used for unanticipated cost overruns at University Village at TU or,
absent such overruns, will be distributed to RAP and RSVP.

o Our executive officers and certain of our senior officers will receive on
account of their beneficial interest in ACP $ from the cash
redemption amount to be paid to RAP. These officers have agreed to use
their distribution from ACP, net of applicable taxes, to purchase common
stock in this offering.

As a result of these formation transactions:

o we will own 98.7% of our Operating Partnership's outstanding Units, and
our Operating Partnership will own all of our off-campus properties,
including the American Campus - Titan Properties;

o certain of our officers will own PIUs in the Operating Partnership
representing approximately a 1.3% limited partnership interest in the
Operating Partnership; and

o the Services Company will become a wholly-owned subsidiary of our
Operating Partnership and will continue to own our on-campus
participating properties.

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CONSEQUENCES OF THIS OFFERING AND THE FORMATION TRANSACTIONS

The following diagram depicts our ownership structure and the ownership
structure of our Operating Partnership and Services Company upon completion of
this Offering and the formation transactions:

[GRAPHIC OMITTED]

- ----------------

(1) Represents PIUs in the Operating Partnership.

BENEFITS TO RELATED PARTIES

Upon completion of this Offering or in connection with the formation
transactions, the former owners of our properties will receive material
benefits, including:

o RAP will receive a cash payment of approximately $ million ([ ]% of the
proceeds of this Offering) for the redemption of its interests in RAPSH.
This amount will increase or decrease depending on whether the shares in
this Offering are sold above or below $20 per share (the mid-point in the
range referred to on the cover of this prospectus).

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o RAPSH will distribute to an affiliate of RAP and Titan certain assets
that we consider to be unrelated to our core business, including:

o fee title to a parcel of commercially-zoned land that is adjacent to
the University Village at San Bernardino, and

o interests 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.

o Reckson and RSVP will, through their respective ownership interests in
RAP, be entitled to participate in the benefits realized by RAP that are
described above.

o Our executive officers and certain members of senior management will
receive material benefits, including:

o A grant of PIUs in our Operating Partnership representing approximately
a 1.3% limited partnership interest in the Operating Partnership;

o $ from the cash redemption amount to be paid to RAP, on account of
their beneficial interests in ACP. These officers have agreed to use
these proceeds, net of applicable taxes, to purchase common stock in
this Offering.

o Participation in our program of outperformance awards under our 2004
Incentive Plan with respect to the value of 3% of our outstanding stock
and Units;

o Employment agreements providing for salary, bonus and other benefits,
including, potentially, severance upon a termination of employment
under certain circumstances, as described under "Management --
Employment Agreements"; and

o Indemnification by us for certain liabilities and expenses incurred as
a result of actions brought, or threatened to be brought, against them
as officers or directors.

o Our non-employee directors will receive material benefits, including:

o A grant of restricted stock units with respect to shares of our
common stock pursuant to our 2004 Incentive Plan;

o Annual and per-meeting fees described under "Management -- Compensation
of Directors."

o Indemnification by us for certain liabilities and expenses incurred as
a result of actions brought, or threatened to be brought, against them
as directors.

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indebtedness, proceeds from future asset sales by FrontLine may be
available for distribution to BT Holdings (NY), Inc. and the other
unsecured creditors. Deutsche Bank Securities Inc. may therefore have an
interest in the successful completion of this Offering beyond the
underwriting discounts and advisory fees that it will receive. See
"Underwriting."

RESTRICTIONS ON TRANSFER

Mr. William Bayless, our Chief Executive Officer and a director, Mr. Brian
Nickel, our Chief Investment Officer and a director, and Mr. Mark Hager, our
Executive Vice President and Chief Financial Officer, and other members of our
senior management have agreed not to sell or otherwise transfer or encumber any
shares of our common stock or securities convertible or exchangeable into our
common stock owned by them at the completion of this Offering (including,
without limitation, their PIUs) or thereafter acquired by them for a period of
14 months after the completion of this Offering.

CONFLICTS OF INTEREST

We have adopted policies that are designed to eliminate or minimize certain
potential conflicts of interest and the partners of our Operating Partnership
have agreed that in the event of a conflict in the fiduciary duties owed by us
to our stockholders and, in our capacity as sole general partner of our
Operating Partnership, to such partners, we will fulfill our fiduciary duties
to such partners by acting in the best interests of our stockholders. See
"Policies with Respect to Certain Activities -- Conflict of Interest Policies."

RESTRICTIONS ON OWNERSHIP OF OUR CAPITAL STOCK

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DESCRIPTION OF THE
PARTNERSHIP AGREEMENT OF
AMERICAN CAMPUS COMMUNITIES OPERATING PARTNERSHIP LP

We have summarized the material terms and provisions of the Amended and
Restated Agreement of Limited Partnership of American Campus Communities
Operating Partnership LP, which we refer to as the "partnership agreement." For
more detail, you should refer to the partnership agreement itself, a copy of
which is filed as an exhibit to the registration statement of which this
prospectus is a part. For purposes of this section, references to "we," "our,"
"us" and "our company" refer to American Campus Communities, Inc.

MANAGEMENT OF OUR OPERATING PARTNERSHIP

Our operating partnership, American Campus Communities Operating Partnership
LP, is a Maryland limited partnership that was formed on March 12, 2004. Our
company is the sole general partner of our Operating Partnership and conducts
substantially all of its business in or through the Operating Partnership. As
sole general partner of our Operating Partnership, we exercise exclusive and
complete responsibility and discretion in its day-to-day management and
control. We have the power to cause our Operating Partnership to enter into
certain major transactions, including acquisitions, dispositions and
refinancings, subject to certain limited exceptions. The limited partners of
our Operating Partnership may not transact business for, or participate in the
management activities or decisions of, our Operating Partnership, except as
provided in the partnership agreement and as required by applicable law.
Certain restrictions under the partnership agreement restrict our ability to
engage in a business combination, as more fully described in "-- Termination
Transactions" below.

Under the terms of the partnership agreement the limited partners of our
Operating Partnership expressly acknowledge that we, as general partner of our
Operating Partnership, are acting for the benefit of the Operating Partnership,
the limited partners and our stockholders collectively. Our company is under no
obligation to give priority to the separate interests of the limited partners
or our stockholders in deciding whether to cause our Operating Partnership to
take or decline to take any actions. If there is a conflict between the
interests of our stockholders on one hand and the limited partners on the
other, we will endeavor in good faith to resolve the conflict in a manner not
adverse to either our stockholders or the limited partners; provided, however,
that for so long as we own a controlling interest in our Operating Partnership,
any conflict that cannot be resolved in a manner not adverse to either our
stockholders or the limited partners shall be resolved in favor of our
stockholders. We are not liable under the partnership agreement to our
Operating Partnership or to any partner for monetary damages for losses
sustained, liabilities incurred, or benefits not derived by limited partners in
connection with such decisions, provided that we have acted in good faith.

All of our business activities, including all activities pertaining to the
acquisition and operation of properties, must be conducted through our
Operating Partnership, and our Operating Partnership must be operated in a
manner that will enable us to satisfy the requirements for being classified as
a REIT.

TRANSFERABILITY OF INTERESTS

Except in connection with a transaction described in "-- Termination
Transactions" below, we, as general partner, may not voluntarily withdraw from
our Operating Partnership, or transfer or assign all or any portion of our
interest in our Operating Partnership, without the consent of the holders of a
majority of the limited partnership interests, including our 99% interest
therein (other than limited partners 50% or more of whose equity is owned,
directly or indirectly, by us as general partner).

AMENDMENTS OF THE PARTNERSHIP AGREEMENT

Amendments to the partnership agreement may be proposed by us, as general
partner, or by limited partners owning at least 25% of the units held by
limited partners.

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Generally, the partnership agreement may be amended, modified or terminated
with the approval of partners holding 66 2/3% of all outstanding Units
(including the Units held by us as general partner). As general partner, we
will have the power to unilaterally make certain amendments to the partnership
agreement without obtaining the consent of the limited partners as may be
required to:

o 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;

o reflect the issuance of additional Units or the admission, substitution,
termination or withdrawal of partners in accordance with the terms of the
partnership agreement;

o 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;

o satisfy any requirements, conditions or guidelines of federal or state
law;

o reflect changes that are reasonably necessary for us, as general partner,
to maintain our status as a REIT; or

o modify the manner in which capital accounts are computed.

Amendments that would, among other things, convert a limited partner's interest
into a general partner's interest, modify the limited liability of a limited
partner, alter a partner's right to receive any distributions or allocations of
profits or losses, or materially alter or modify the redemption rights
described below must be approved by each limited partner that would be
adversely affected by such amendment.

In addition, without the written consent of the holders of a majority of the
limited partnership interests (other than limited partners 50% or more of whose
equity is owned, directly or indirectly, by us as general partner), we, as
general partner, may not do any of the following:

o take any action in contravention of an express prohibition or limitation
contained in the partnership agreement;

o 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;

o acquire an interest in real or personal property other than through our
Operating Partnership;

o withdraw from the Operating Partnership or transfer any portion of our
general partnership interest; or

o be relieved of our obligations under the partnership agreement following
any permitted transfer of our general partnership interest.

DISTRIBUTIONS TO UNITHOLDERS

The partnership agreement provides that holders of Units are entitled to
receive quarterly distributions of available cash on a pro rata basis in
accordance with their respective percentage interests.

REDEMPTION/ EXCHANGE RIGHTS

Limited partners who acquire Units have the right to require our Operating
Partnership to redeem part or all of their Units for cash based upon the fair
market value of an equivalent number of shares of our Company's common stock at
the time of the redemption. Alternatively, we may elect to acquire those Units
in exchange for shares of our common stock. Our acquisition will be on a
one-for-one basis, subject to adjustment in the event of stock splits, stock
dividends, issuance of stock rights, specified extraordinary distributions and
similar events. Limited partners who hold Units may exercise this redemption
right from time to time, in whole or in part, except when, as a consequence of
shares of our common stock being issued, any person's actual or constructive
stock ownership

159

would exceed our ownership limits, or any other limit as provided in our
Charter or as otherwise determined by our board of directors as described under
the section entitled "Description of Securities -- Restrictions on Transfer."

ISSUANCE OF ADDITIONAL UNITS, COMMON STOCK OR CONVERTIBLE SECURITIES

As sole general partner, we have the ability, without the consent of the other
limited partners, to cause the Operating Partnership to issue additional Units
representing general and limited partnership interests. These additional Units
may include PIUs and preferred limited partnership units. In addition, we may
issue additional shares of our common stock or convertible securities, but only
if we cause our Operating Partnership to issue to us partnership interests or
rights, options, warrants or convertible or exchangeable securities of our
Operating Partnership having designations, preferences and other rights, so
that the economic interests of our Operating Partnership's interests issued are
substantially similar to the securities that we have issued.

TAX MATTERS

As general partner, we have authority to make tax elections under the Code on
behalf of our Operating Partnership. In addition, we are the tax matters
partner of our Operating Partnership.

ALLOCATIONS OF NET INCOME AND NET LOSSES TO PARTNERS

The net income or net loss of our Operating Partnership will generally be
allocated to us, as general partner, and the limited partners in accordance
with our respective percentage interests in our Operating Partnership. However,
in some cases losses may be disproportionately allocated to partners who have
guaranteed debt of our Operating Partnership. The allocations described above
are subject to special allocations relating to depreciation deductions and to
compliance with the provisions of Sections 704(b) and 704(c) of the Code and
the associated Treasury Regulations.

OPERATIONS

The partnership agreement provides that we, as general partner, will determine
and distribute all "available cash", which includes, without limitation, the
net operating cash revenues of our Operating Partnership, as well as the net
sales and refinancing proceeds, quarterly, pro rata in accordance with the
partners' percentage interests.

The partnership agreement provides that our Operating Partnership will assume
and pay when due, or reimburse us for payment of, all costs and expenses
relating to the operations of, or for the benefit of, our Operating
Partnership.

TERMINATION TRANSACTIONS

The partnership agreement provides that we may not engage in any merger,
consolidation or other combination with or into another person, any sale of all
or substantially all of our assets or any reclassification or any
recapitalization or change in outstanding shares of our common stock (a
"termination transaction"), unless in connection with a termination transaction

(i) we obtain the consent of the partners of our Operating Partnership
(including us) holding at least a majority of all Units, and

(ii) either:

(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,

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provided that, if, in connection with a termination transaction,
a purchase, tender or exchange offer is made to and accepted by
the holders of more than 50% of the outstanding shares of our
common stock, each holder of Units will receive, or will have
the right to elect to receive, the greatest amount of cash,
securities, or other property which such holder would have
received had it exercised its redemption right and received
shares of our common stock in exchange for its Units immediately
prior to the expiration of such purchase, tender or exchange
offer and accepted such purchase, tender or exchange offer; 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
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.

TERM

Our Operating Partnership will continue in full force and effect until it is
dissolved in accordance with the terms of the partnership agreement or as
otherwise provided by law.

INDEMNIFICATION AND LIMITATION OF LIABILITY

To the extent permitted by applicable law, the partnership agreement
indemnifies us, as general partner, and our officers, directors, employees,
agents and any other persons we may designate from and against any and all
claims arising from operations of our Operating Partnership in which any
indemnitee may be involved, or is threatened to be involved, as a party or
otherwise, unless it is established that:

o 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;

o the indemnitee actually received an improper personal benefit in money,
property or services; or

o in the case of any criminal proceeding, the indemnitee had reasonable
cause to believe that the act or omission was unlawful.

In any event, we, as general partner of our Operating Partnership, and our
officers, directors, agents or employees, are not liable or accountable to our
Operating Partnership for losses sustained, liabilities incurred or benefits
not derived as a result of errors in judgment or mistakes of fact or law or any
act or omission so long as we acted in good faith.

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PRINCIPAL STOCKHOLDERS

The following table sets forth the beneficial ownership of shares of our common
stock and shares of common stock into which Units are exchangeable immediately
following the consummation of this Offering and the formation transactions for
(i) each person who is expected to be the beneficial owner of 5% or more of the
outstanding common stock immediately following the consummation of this
Offering, (ii) directors, proposed directors and the executive officers, and
(iii) directors, proposed directors and executive officers as a group. This
table assumes that the formation transactions and this Offering are completed.
Each person named in the table has sole voting and investment power with
respect to all of the shares of our common stock shown as beneficially owned by
such person, except as otherwise set forth in the notes to the table. The
extent to which a person will hold shares of common stock as opposed to Units
is set forth in the footnotes below. Unless otherwise indicated, the address of
each named person is c/o American Campus Communities, Inc., 805 Las Cimas
Parkway, Suite 400, Austin, Texas 78746.

NUMBER OF SHARES PERCENT OF
AND UNITS PERCENT OF ALL SHARES
NAME OF BENEFICIAL OWNER BENEFICIALLY OWNED (1) ALL SHARES AND UNITS
- ------------------------ ---------------------- ---------- ----------

William C. Bayless, Jr. .................................... * *
Brian B. Nickel ............................................ * *
Mark J. Hager .............................................. * *
Greg A. Dowell ............................................. * *
Ronnie L. Macejewski ....................................... * *
Brian N. Winger ............................................ * *
Jason R. Wills ............................................. * *
All directors, director nominees and executive officers as a
group ( persons) ........................................ 1% 1%

- ----------------
* Less than one percent.

(1) Represents the PIUs to be issued upon consummation of this Offering. Does
not reflect any entitlement to outperformance awards.

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DESCRIPTION OF SECURITIES

We are a Maryland corporation. Your rights as a stockholder are governed by the
Code of Maryland, including the Maryland General Corporation Law, and our
Charter and bylaws. The following is a summary of the material terms of our
capital stock. You should read our Charter and bylaws, copies of which are
exhibits to the registration statement of which this prospectus is a part, for
more complete information. See "Where You Can Find More Information."

GENERAL

Authorized Shares. Our Charter provides that we may issue up to 800,000,000
shares of our common stock, $0.01 par value per share, and 200,000,000 shares
of preferred stock, $0.01 par value per share. Upon completion of this
Offering, shares of our common stock and no shares of preferred
stock will be issued and outstanding.

Authority of Our Board of Directors Relating to Authorized Shares. Our Charter
authorizes our board of directors to amend our Charter to increase or decrease
the total number of our authorized shares, or the number of shares of any class
or series of capital stock that we have authority to issue, without stockholder
approval. Our board of directors also has the authority, under our Charter and
without stockholder approval, to classify any unissued shares of common or
preferred stock into one or more classes or series of stock and to reclassify
any previously classified but unissued shares of any series of our common or
preferred stock. If, however, there are any laws or stock exchange rules that
require us to obtain shareholder approval in order for us to take these
actions, we will contact our shareholders to solicit that approval.

We believe that the power to issue additional shares of common stock or
preferred stock and to classify or reclassify unissued shares of common or
preferred stock and then issue the classified or reclassified shares provides
us with increased flexibility in structuring possible future financings and
acquisitions and in meeting other needs that may arise in the future. These
actions can be taken without stockholder approval, unless stockholder approval
is required by applicable law or the rules of any stock exchange or automated
quotation system on which our securities may be listed or traded. Although our
board of directors has no present intention of doing so, we could issue a class
or series of stock that could delay, defer or prevent a transaction or a change
of control that would involve a premium price for holders of our common stock
or otherwise be favorable to them.

Terms and Conditions of Authorized Shares. Prior to issuance of shares of each
class or series, our board of directors is required by Maryland law and our
charter to set, subject to the provisions of our Charter regarding restrictions
on transfer of stock, the terms, preferences, conversion or other rights,
voting powers, restrictions, limitations as to dividends or other
distributions, qualifications and terms or conditions of redemption for each
class or series. As a result, our board of directors could authorize the
issuance of shares of common stock or preferred stock with terms and conditions
that could have the effect of delaying, deferring or preventing a transaction
or a change of control that would involve a premium price for holders of our
common stock or otherwise be favorable to them.

Shareholder Liability. Applicable Maryland law provides that our stockholders
will not be personally liable for our acts and obligations and that our funds
and property will be the only recourse for our acts and obligations.

COMMON STOCK

All shares of our common stock offered hereby will be duly authorized, fully
paid and nonassessable. Subject to the preferential rights of any other class
or series of stock and to the provisions of the Charter regarding restrictions
on transfer of stock, holders of shares of our common stock are entitled to
receive distributions on such stock if, as and when authorized by our board of
directors out of assets legally available for the payment of distributions, and
declared by us, and to share ratably in our assets legally available for
distribution to our stockholders in the event of our liquidation, dissolution
or winding up, after payment of or adequate provision for all of our known
debts and liabilities.

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Subject to the provisions of our Charter regarding restrictions on transfer of
stock, as described in more detail below under "Restrictions on Transfer," each
outstanding share of our common stock entitles the holder to one vote on all
matters submitted to a vote of stockholders, including the election of
directors and, except as provided with respect to any other class or series of
stock, the holders of our common stock will possess the exclusive voting power.
There is no cumulative voting in the election of our directors. Under Maryland
law, the holders of a plurality of the votes cast at a meeting at which
directors are to be elected is sufficient to elect a director unless a
corporation's charter or bylaws provide otherwise. Our bylaws provide that the
holders of a majority of the outstanding shares of our voting stock can elect
all of the directors who stand for election, which means that the holders of
the remaining shares will not be able to elect any directors.

Holders of shares of our common stock have no preference, conversion, exchange,
sinking fund, redemption or appraisal rights and have no preemptive or other
rights to subscribe for any of our securities . Subject to the provisions of
our Charter regarding the restrictions on transfer of stock, shares of our
common stock will have equal dividend, liquidation and other rights.

Under Maryland Law, a Maryland corporation generally cannot dissolve, amend its
charter, merge, sell all or substantially all of its assets, engage in a share
exchange or engage in similar transactions outside the ordinary course of
business unless approved by the affirmative vote of stockholders holding at
least two-thirds of the shares entitled to vote on the matter unless a higher
or lower percentage is set forth in the corporation's charter. Our Charter does
not provide for a higher or lower percentage in these situations.

PREFERRED STOCK

Under our Charter, our board of directors may from time to time establish and
issue one or more series of preferred stock without stockholder approval. Prior
to issuance of shares of each series, our board of directors is required by
Maryland Law and our Charter to set, subject to the provisions of our Charter
regarding restrictions on transfer of stock, the terms, preferences, conversion
or other rights, voting powers, restrictions, limitations as to dividends or
other distributions, qualifications and terms or conditions of redemption for
each series. As of the date hereof, no shares of preferred stock are
outstanding and we have no present plans to issue any preferred stock.

RESTRICTIONS ON TRANSFER

In order for us to qualify as a REIT under the Code, our stock must be
beneficially owned by 100 or more persons during at least 335 days of a taxable
year of 12 months (other than the first year for which an election to be a REIT
has been made) or during a proportionate part of a shorter taxable year. Also,
not more than 50% of the value of the outstanding shares of stock may be owned,
directly or indirectly, by five or fewer individuals (as defined in the Code to
include certain entities such as qualified pension plans) during the last half
of a taxable year (other than the first year for which an election to be a REIT
has been made).

Our Charter contains restrictions on the ownership and transfer of our stock
which are intended to assist us in complying with these requirements and
continuing to qualify as a REIT. The relevant sections of our Charter provide
that, subject to the exceptions described below, no person or entity may
beneficially own, or be deemed to own by virtue of the applicable constructive
ownership provisions of the Code, more than 9.8% (by value, by number of shares
or by voting power, whichever is more restrictive) of the outstanding shares of
our common stock or more than 9.8% by value of all of our outstanding shares,
including both common and preferred stock. We refer to this restriction as the
"ownership limit." A person or entity that becomes subject to the ownership
limit by virtue of a violative transfer that results in a transfer to a trust,
as set forth below, is referred to as a "purported beneficial transferee" if,
had the violative transfer been effective, the person or entity would have been
a record owner and beneficial owner or solely a beneficial owner of our stock,
or is referred to as a "purported record transferee" if, had the violative
transfer been effective, the person or entity would have been solely a record
owner of our stock.

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Our board of directors must waive the ownership limit with respect to a
particular person if it:

o 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

o 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.

As a condition of our waiver, our board of directors may require the applicant
to submit such information as the board of directors may reasonably need to
make the determinations regarding our REIT status and additionally may require
an opinion of counsel or IRS ruling satisfactory to our board of directors,
and/or representations or undertakings from the applicant with respect to
preserving our REIT status.

In connection with the waiver of the ownership limit or at any other time, our
board of directors may increase the ownership limitation for some persons and
decrease the ownership limit for all other persons and entities; provided,
however, that the decreased ownership limit will not be effective for any
person or entity whose percentage ownership in our stock is in excess of such
decreased ownership limit until such time as such person or entity's percentage
of our stock equals or falls below the decreased ownership limit, but any
further acquisition of our stock in excess of such percentage ownership of our
common stock will be in violation of the ownership limit. Additionally, the new
ownership limit may not allow five or fewer stockholders to beneficially own
more than 49% in value of our outstanding stock.

Our Charter provisions further prohibit:

o 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

o 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).

Any person who acquires or attempts or intends to acquire beneficial or
constructive ownership of shares of our stock that will or may violate any of
the foregoing restrictions on transferability and ownership will be required to
give notice immediately to us and provide us with such other information as we
may request in order to determine the effect of such transfer on our status as
a REIT. The foregoing provisions on transferability and ownership will not
apply if our board of directors determines that it is no longer in our best
interests to attempt to qualify, or to continue to qualify, as a REIT.

Pursuant to our Charter, if any purported transfer of our stock or any other
event would otherwise result in any person violating the ownership limits or
such other limit as permitted by our board of directors, then any such
purported transfer will be void and of no force or effect as to that number of
shares in excess of the ownership limit (rounded up to the nearest whole
share). That number of shares in excess of the ownership limit will be
automatically transferred to, and held by, a trust for

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the exclusive benefit of one or more charitable organizations selected by us.
The automatic transfer will be effective as of the close of business on the
business day prior to the date of the violative transfer or other event that
results in a transfer to the trust. Any dividend or other distribution paid to
the purported record transferee, prior to our discovery that the shares had
been automatically transferred to a trust as described above, must be repaid to
the trustee upon demand for distribution to the beneficiary of the trust. If
the transfer to the trust as described above is not automatically effective,
for any reason, to prevent violation of the applicable ownership limit or as
otherwise permitted by our board of directors, then our Charter provides that
the transfer of the excess shares will be void.

Shares of our stock transferred to the trustee are deemed offered for sale to
us, or our designee, at a price per share equal to the lesser of (i) the price
paid by the purported record transferee for the shares (or, if the event which
resulted in the transfer to the trust did not involve a purchase of such shares
of our stock at market price, the last reported sales price reported on the New
York Stock Exchange on the trading day immediately preceding the day of the
event which resulted in the transfer of such shares of our stock to the trust)
and (ii) the market price on the date we, or our designee, accepts such offer.
We have the right to accept such offer until the trustee has sold the shares
our stock held in the trust pursuant to the clauses discussed below. Upon a
sale to us, the interest of the charitable beneficiary in the shares sold
terminates and the trustee must distribute the net proceeds of the sale to the
purported record transferee and any dividends or other distributions held by
the trustee with respect to such stock will be paid to the charitable
beneficiary.

If we do not buy the shares, the trustee must, within 20 days of receiving
notice from us of the transfer of shares to the trust, sell the shares to a
person or entity designated by the trustee who could own the shares without
violating the ownership limits or as otherwise permitted by our board of
directors. After that, the trustee must distribute to the purported record
transferee an amount equal to the lesser of (i) the price paid by the purported
record transferee or owner for the shares (or, if the event which resulted in
the transfer to the trust did not involve a purchase of such shares at market
price, the last reported sales price reported on the New York Stock Exchange on
the trading day immediately preceding the relevant date) and (ii) the sales
proceeds (net of commissions and other expenses of sale) received by the trust
for the shares. The purported beneficial transferee or purported record
transferee has no rights in the shares held by the trustee.

The trustee shall be designated by us and shall be unaffiliated with us and
with any purported record transferee or purported beneficial transferee. Prior
to the sale of any excess shares by the trust, the trustee will receive, in
trust for the beneficiary, all dividends and other distributions paid by us
with respect to the excess shares, and may also exercise all voting rights with
respect to the excess shares.

Subject to Maryland Law, effective as of the date that the shares have been
transferred to the trust, the trustee shall have the authority, at the
trustee's sole discretion:

o 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

o to recast the vote in accordance with the desires of the trustee acting
for the benefit of the beneficiary of the trust.

However, if we have already taken irreversible corporate action, then the
trustee may not rescind and recast the vote.

Any beneficial owner or constructive owner of shares of our stock and any
person or entity (including the stockholder of record) who is holding shares of
our stock for a beneficial owner must, on request, provide us with a completed
questionnaire containing the information regarding their ownership of such
shares, as set forth in the applicable Treasury Regulations. In addition, any
person or entity that is a beneficial owner or constructive owner of shares of
our stock and any person or entity (including the stockholder of record) who is
holding shares of our stock for a beneficial owner or constructive owner shall,
on request, be required to disclose to us in writing such information as we may
request

166

in order to determine the effect, if any, of such stockholder's actual and
constructive ownership of shares of our stock on our status as a REIT and to
ensure compliance with the ownership limit, or as otherwise permitted by our
board of directors.

All certificates representing shares of our stock bear a legend referring to
the restrictions described above.

These ownership limits could delay, defer or prevent a transaction or a change
of control of our Company that might involve a premium price for our stock or
otherwise be in the best interest of our stockholders.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for our common stock is The Bank of New York.

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CERTAIN PROVISIONS OF MARYLAND LAW AND OF OUR CHARTER AND BYLAWS

The following description summarizes the material terms of certain provisions
of Maryland Law, our Charter and our bylaws. You should review the Maryland
General Corporation Law, our Charter and our bylaws for complete information.
For a complete description, we refer you to the Maryland General Corporation
Law, our Charter and our bylaws. We have filed our Charter and bylaws as
exhibits to the registration statement of which this prospectus is a part. See
"Where You Can Find More Information."

OUR BOARD OF DIRECTORS, VACANCIES ON OUR BOARD OF DIRECTORS AND REMOVAL OF
DIRECTORS

Number and Election of Directors. Our bylaws provide that, except for any
directors elected by holders of a class or series of shares other than common
stock, the number of our directors will be fixed by a majority of our entire
board of directors, but may not be fewer than the minimum number permitted
under Maryland Law or more than 15. In establishing the number of directors,
the board of directors may not alter the term of office of any director in
office at that time.

Pursuant to our Charter, each of our directors is elected by our stockholders
to serve until the next annual meeting and until their successors are duly
elected and qualify. Holders of shares of our common stock will have no right
to cumulative voting in the election of directors. Consequently, at each annual
meeting of stockholders, the holders of a majority of the outstanding shares of
our voting stock will be able to elect all of our directors.

Vacancies on Our Board of Directors. In addition, our bylaws provide that,
except for any directors elected by holders of a class or series of shares
other than common stock and vacancies that result from an increase in the
number of directors constituting the board, any vacancies on our board of
directors, may be filled, at any regular meeting or at any special meeting
called for that purpose, by vote of a majority of the remaining directors, even
if less than a quorum, and any vacancy that results from an increase in the
number of directors constituting the board must be filled by vote of a majority
of the entire board of directors.

Removal of Directors. Our Charter provides that, except for any directors
elected by holders of a class or series of shares other than common stock, a
director may be removed by the stockholders only with the affirmative vote of
at least two-thirds of the votes entitled to be cast generally in the election
of directors and only for "cause." In our Charter, "cause" means, with respect
to any particular director, conviction of a felony or a final judgment of a
court of competent jurisdiction holding that such director caused demonstrable,
material harm to the Company through bad faith or active and deliberate
dishonesty.

AMENDMENT OF OUR CHARTER AND BYLAWS

Our Charter, including its provisions on removal of directors, may be amended
only by the affirmative vote of the holders of not less than two-thirds of all
of the votes entitled to be cast on the matter. Our bylaws may be amended only
by a majority of our directors. The stockholders have no right to amend or
propose an amendment to our bylaws.

TRANSACTIONS OUTSIDE THE ORDINARY COURSE OF BUSINESS

We may not merge with or into another entity, sell all or substantially all of
our assets, engage in a share exchange or engage in similar transactions
outside the ordinary course of our business unless the transaction or
transactions are approved by the affirmative vote of the holders of not less
than two-thirds of all of the votes entitled to be cast on the matter.

DISSOLUTION

A proposal that we dissolve must be approved by the affirmative vote of the
holders of not less than two-thirds of all of the votes entitled to be cast on
the matter.

ADVANCE NOTICE OF DIRECTOR NOMINATIONS AND NEW BUSINESS

Our bylaws provide for advance notice by a stockholder or stockholders wishing
to have certain matters considered and voted upon at a meeting of stockholders.

168

With respect to an annual meeting of stockholders, nominations of persons for
election to our board of directors and the proposal of business to be
considered by stockholders may be made only:

o pursuant to our notice of the meeting;

o by or at the direction of our board of directors; or

o by a stockholder who is entitled to vote at the meeting and has complied
with the advance notice procedures set forth in our bylaws.

These procedures generally require the stockholder to deliver notice to our
Secretary not less than 90 days or later than the close of business on the
120th day prior to the first anniversary of the date of mailing of the notice
for the preceding year's annual meeting. If the date of the annual meeting is
advanced by more than 30 days from the date of the preceding year's meeting or
if we did not hold an annual meeting the preceding year, notice must delivered
not earlier than the 120th day prior to the date of mailing of the notice for
that annual meeting and not later than the close of business on the later of
the 90th day prior to the date of mailing of the notice for the annual meeting
or the 10th day following the day on which disclosure of the date of mailing
for the meeting is made.

With respect to special meetings of stockholders, only the business specified
in our Company's notice of meeting may be brought before the meeting of
stockholders. Nominations of persons for election to our board of directors may
be made only:

o pursuant to our notice of the meeting;

o by or at the direction of our board of directors; or

o provided that our board of directors has determined that directors shall
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.

Notice must be delivered not earlier than the 120th day prior to the date of
mailing of the notice for that annual meeting and not later than the close of
business on the later of the 90th day prior to the date of mailing of the
notice for the annual meeting or the 10th day following the day on which
disclosure of the date of mailing for the meeting is made.

The postponement or adjournment of an annual or special meeting to a later date
or time will not commence any new time periods for the giving of the notice
described above. Our bylaws contain detailed requirements for the contents of
stockholder notices of director nominations and new business proposals.

OWNERSHIP LIMIT

Our Charter provides that no person or entity may beneficially own, or be
deemed to own by virtue of the applicable constructive ownership provisions of
the Code, more than 9.8% (by value, by number of shares or by voting power,
whichever is more restrictive) of the outstanding shares of our stock. We refer
to this restriction as the "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.

BUSINESS COMBINATIONS

Maryland Law establishes special requirements for "business combinations"
(including a merger, consolidation, share exchange or, in certain
circumstances, an asset transfer or issuance or reclassification of equity
securities) between a Maryland corporation and any person who beneficially owns
10% or more of the voting power of the corporation's shares or an affiliate of
the corporation who, at any time within the two-year period prior to the date
in question, was the beneficial owner of 10% or more of the voting power of the
then outstanding voting stock of the corporation, an interested stockholder, or
an affiliate of such an interested stockholder are prohibited for five years
after the most recent date on which the interested stockholder becomes an
interested stockholder. Thereafter, any such business combination must be
recommended by the board of directors of such

169

corporation and approved by the affirmative vote of at least (a) 80% of the
votes entitled to be cast by holders of outstanding shares of voting stock of
the corporation and (b) two-thirds of the votes entitled to be cast by holders
of voting stock of the corporation other than shares held by the interested
stockholder with whom (or with whose affiliate) the business combination is to
be effected, unless, among other conditions, the corporation's common
stockholders receive a minimum price (as defined in Maryland Law) for their
shares and the consideration is received in cash or in the same form as
previously paid by the interested stockholder for its shares. These provisions
of Maryland Law do not apply, however, to business combinations that are
approved or exempted by our board of directors prior to the time that the
interested stockholder becomes an interested stockholder. In addition, a person
is not considered an interested stockholder under the statute if our board of
directors approved in advance the transaction by which the person otherwise
would have become an interested stockholder. Our board of directors may provide
that its approval is subject to compliance with any terms and conditions
determined by it.

Our board of directors has by resolution opted out of these provisions of
Maryland Law and, consequently, the five-year prohibition and the supermajority
vote requirements will not apply to business combinations between us and any
interested stockholder of ours.

CONTROL SHARE ACQUISITIONS

Maryland Law provides that "control shares" of a Maryland corporation acquired
in a "control share acquisition" have no voting rights except to the extent
approved at a special meeting by the affirmative vote of two-thirds of the
votes entitled to be cast on the matter, excluding shares of stock in a
corporation in respect of which any of the following persons is entitled to
exercise or direct the exercise of the voting power of shares of stock of the
corporation in the election of directors: (i) a person who makes or proposes to
make a control share acquisition, (ii) an officer of the corporation or (iii)
an employee of the corporation who is also a director of the corporation.
"Control shares" are voting shares of stock which, if aggregated with all other
such shares of stock previously acquired by the acquirer or in respect of which
the acquirer is able to exercise or direct the exercise of voting power (except
solely by virtue of a revocable proxy), would entitle the acquirer to exercise
voting power in electing directors within one of the following ranges of voting
power: (i) one-tenth or more but less than one-third, (ii) one-third or more
but less than a majority, or (iii) a majority or more of all voting power.
Control shares do not include shares the acquiring person is then entitled to
vote as a result of having previously obtained stockholder approval. A "control
share acquisition" means the acquisition of control shares, subject to certain
exceptions.

A person who has made or proposes to make a control share acquisition, upon
satisfaction of certain conditions (including an undertaking to pay expenses),
may compel our board of directors to call a special meeting of stockholders to
be held within 50 days of demand to consider the voting rights of the shares.
If no request for a meeting is made, the corporation may itself present the
question at any stockholders' meeting.

If voting rights are not approved at the meeting or if the acquiring person
does not deliver an acquiring person statement as required by the statute,
then, subject to certain conditions and limitations, the corporation may redeem
any or all of the control shares (except those for which voting rights have
previously been approved) for fair value determined, without regard to the
absence of voting rights for the control shares, as of the date of the last
control share acquisition by the acquirer or of any meeting of stockholders at
which the voting rights of such shares are considered and not approved. If
voting rights for control shares are approved at a stockholders' meeting and
the acquirer becomes entitled to vote a majority of the shares entitled to
vote, all other stockholders may exercise appraisal rights. The fair value of
the shares as determined for purposes of such appraisal rights may not be less
than the highest price per share paid by the acquirer in the control share
acquisition.

The control share acquisition statute does not apply (a) to shares acquired in
a merger, consolidation or share exchange if the corporation is a party to the
transaction or (b) to acquisitions approved or exempted by the Charter or
bylaws of the corporation.

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Our bylaws contain a provision exempting from the control share acquisition
statute any and all acquisitions by any person of our common stock. There can
be no assurance that our board of directors will not amend or eliminate this
provision of our bylaws in the future.

ANTI-TAKEOVER EFFECT OF CERTAIN PROVISIONS OF MARYLAND LAW AND OF OUR CHARTER
AND BYLAWS

The provisions of our Charter on removal of directors and the advance notice
provisions of the bylaws could delay, defer or prevent a transaction or a
change of control of our Company that might involve a premium price for holders
of our common stock or otherwise be in their best interest. Likewise, if our
Company's board of directors were to opt in to the business combination
provisions of Maryland Law or if the provision in the bylaws opting out of the
control share acquisition provisions of Maryland Law were rescinded, these
provisions of Maryland Law could have similar anti-takeover effects.

BOARD CONSIDERATION OF RELEVANT FACTORS AND CONSTITUENCIES

Our Charter provides that our board of directors may, in connection with a
"business combination," "change in control" or other potential acquisition of
our control, to consider the effect of the potential acquisition of our
control, to consider the effect of the potential acquisition on our
stockholders, employees, suppliers, customers and creditors and on communities
in which our offices or other establishments are located. As a result of this
provision, our board of directors may consider subjective factors that affect
or may affect the potential acquisition and may oppose the proposal on that
basis.

DUTIES OF OUR DIRECTORS

Under Maryland Law, there is a presumption that the act of a director satisfies
the required standard of care under Maryland Law. An act of a director relating
to or affecting an acquisition or a potential acquisition of control is not
subject under Maryland Law to a higher duty or to greater scrutiny than those
applied to any other act of a director. This provision does not impose an
enhanced level of scrutiny when our board of directors implements anti-takeover
measures in a change-of-control context, and also shifts the burden of proof
for demonstrating that any defensive mechanism adopted by our board is
unreasonable.

INDEMNIFICATION AND LIMITATION OF DIRECTORS' AND OFFICERS' LIABILITY

Our Charter and the partnership agreement provide for indemnification of our
officers and directors against liabilities to the fullest extent permitted by
Maryland Law.

Maryland Law permits a Maryland corporation to include in its charter a
provision limiting the liability of its directors and officers to the
corporation and its stockholders for money damages except for liability
resulting from actual receipt of an improper benefit or profit in money,
property or services or active and deliberate dishonesty established by a final
judgment as being material to the cause of action. Our Charter contains such a
provision, which eliminates such liability to the maximum extent permitted by
Maryland Law.

Our Charter also provides that, to the maximum extent that Maryland Law in
effect from time to time permits limitation of the liability of directors and
officers of a corporation, no director or officer shall be liable to us or our
stockholders for money damages. Our bylaws obligate us, to the fullest extent
permitted by Maryland Law in effect from time to time, to indemnify and,
without requiring a preliminary determination of the ultimate entitlement to
indemnification, pay or reimburse reasonable expenses in advance of final
disposition of a proceeding to:

o 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

o any individual who, while a director of our Company 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.

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Our Charter and bylaws also permit us to indemnify and advance expenses to any
person who served a predecessor of ours in any of the capacities described
above and to any employee or agent of our Company or a predecessor of our
Company.

Maryland Law requires a corporation (unless its charter provides otherwise,
which our Charter does not) to indemnify a director or officer who has been
successful, on the merits or otherwise, in the defense of any proceeding to
which he or she is made a party by reason of his or her service in that
capacity. Maryland Law permits a corporation to indemnify its present and
former directors and officers, among others, against judgments, penalties,
fines, settlements and reasonable expenses actually incurred by them in
connection with any proceeding to which they may be made a party by reason of
their service in those or other capacities unless it is established that:

o the act or omission of the director or officer was material to the matter
giving rise to the proceeding and:

o was committed in bad faith; or

o was the result of active and deliberate dishonesty;

o the director or officer actually received an improper personal benefit in
money, property or services; or

o in the case of any criminal proceeding, the director or officer had
reasonable cause to believe that the act or omission was unlawful.

However, under Maryland Law, a Maryland corporation may not indemnify for an
adverse judgment in a suit by or in the right of the corporation or for a
judgment of liability on the basis that personal benefit was improperly
received, unless in either case a court orders indemnification and then only
for expenses. In addition, Maryland Law permits a corporation to advance
reasonable expenses to a director or officer only upon the corporation's
receipt of:

o 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

o 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.

The partnership agreement provides that we, our officers and our directors are
indemnified to the fullest extent permitted by law. See "Description of the
Partnership Agreement of American Campus Communities Operating Partnership LP
- -- Indemnification and Limitation of Liability."

Insofar as the foregoing provisions permit indemnification of directors,
officers or persons controlling us for liability arising under the Securities
Act, we have been informed that, in the opinion of the Securities and Exchange
Commission, this indemnification is against public policy as expressed in the
Securities Act and is therefore unenforceable.

INDEMNIFICATION AGREEMENTS

We have entered into an indemnification agreement with each of our executive
officers and directors as described in "Management -- Indemnification
Agreements."

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SHARES ELIGIBLE FOR FUTURE SALE

GENERAL

Upon completion of this Offering, based upon an offering at the mid-point of
the range set forth on the front cover of this prospectus, we expect to have
outstanding shares of our common stock ( shares if
the underwriters' over-allotment option is exercised in full). In addition,
shares of our common stock that are reserved for issuance upon
exchange of PIUs issued to our officers, directors and employees plus any
shares purchased by affiliates in this Offering and the shares of our common
stock owned by affiliates upon redemption/exchange of Units will be "restricted
shares" as defined in Rule 144.

Of these shares, the shares sold in this Offering
( shares if the underwriters' over-allotment option is exercised
in full) will be freely transferable without restriction or further
registration under the Securities Act, subject to the limitations on ownership
set forth in our Charter, except for any shares held by our "affiliates," as
that term is defined by Rule 144 under the Securities Act.

RULE 144

In general, under Rule 144 as currently in effect, beginning 90 days after the
date of this prospectus, a person who has beneficially owned restricted shares
of our common stock for at least one year would be entitled to sell, within any
three-month period, that number of shares that does not exceed the greater of:

o 1% of the shares of our common stock then outstanding, which will equal
approximately shares immediately after this Offering
( shares if the underwriters exercise their over-allotment
option in full); or

o the average weekly trading volume of our common stock on the New York
Stock Exchange during the four calendar weeks preceding the date on which
notice of the sale is filed with the SEC.

Sales under Rule 144 are also subject to manner of sale provisions, notice
requirements and the availability of current public information about us.

STOCK OPTIONS AND 2004 INCENTIVE PLAN

We have adopted the 2004 Incentive Plan of American Campus Communities, Inc.,
American Campus Communities Services, Inc. and American Campus Communities
Operating Partnership LP, which provides for the grant to the employees,
directors and consultants of our Company, our Services Company and our
Operating Partnership (and their respective subsidiaries) of stock options,
PIUs, RSUs, restricted stock and other incentive awards. We intend to
issue PIUs (representing a 1% profits interest in our Operating
Partnership) to officers, directors and key employees immediately after this
Offering, and have reserved an additional shares of our common
stock for issuance under the plan.

We anticipate that we will file a registration statement with respect to the
shares of our common stock issuable under the 2004 Incentive Plan following the
consummation of this Offering. Shares of our common stock covered by this
registration statement, including shares of our common stock issuable upon the
exercise of options or restricted shares of our common stock, will be eligible
for transfer or resale without restriction under the Securities Act unless held
by affiliates.

LOCK-UP AGREEMENTS AND OTHER CONTRACTUAL RESTRICTIONS ON RESALE

In addition to the limits placed on the sale of shares of our common stock by
operation of Rule 144 and other provisions of the Securities Act, (i) Mr.
Bayless and our other senior officers and directors have agreed, subject to
certain exceptions (including a bona fide gift or a transfer to a trust for the
benefit of an immediate family member) not to sell or otherwise transfer or
encumber any shares of our common stock or securities convertible into common
stock (including PIUs and Units) owned by

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them at the completion of this Offering or thereafter acquired by them for a
period of 14 months after the completion of this Offering without the consent
of Citigroup Global Markets Inc. and Deutsche Bank Securities Inc., and (ii) we
have agreed that we will not offer, sell, contract to sell, pledge or otherwise
dispose of, directly or indirectly, or file with the Securities and Exchange
Commission a registration statement under the Securities Act relating to, any
shares of our common stock or securities convertible into or exchangeable or
exercisable for any shares of our common stock, or publicly disclose the
intention to make any offer, sale, pledge, disposition or filing, without the
prior written consent of Citigroup Global Markets Inc. and Deutsche Bank
Securities Inc. for a period of 14 months after the date of this prospectus,
subject to certain limited exceptions set forth in "Underwriting." In the event
that either (x) during the last 17 days of the 14 month period referred to
above, we issue an earnings release or a press release announcing a significant
event or (y) prior to the expiration of such 14 month period, we announce that
we will release earnings or a press release announcing a significant event
results during the 17-day period beginning on the last day of such 14 month
period, the restrictions described above shall continue to apply until the
expiration of the 17-day period beginning on the date of the earnings release.
At the conclusion of the 14 month period referenced in clause (i) above, common
stock issued upon the exchange of PIUs or Units may be sold by Mr. Bayless and
our other senior officers and directors in the public market once registered
pursuant to the registration rights described above. Citigroup Global Markets
Inc. and Deutsche Bank Securities Inc. may, in their sole discretion and at any
time or from time to time, without notice, release all or any portion of the
shares of common stock or other securities subject to the lock-up agreements
referred to above.

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FEDERAL INCOME TAX CONSIDERATIONS

The following discussion summarizes our taxation and the material Federal
income tax consequences to stockholders of their ownership of common stock. The
tax treatment of stockholders will vary depending upon the stockholder's
particular situation, and this discussion addresses only stockholders that hold
common stock as a capital asset and does not deal with all aspects of taxation
that may be relevant to particular stockholders in light of their personal
investment or tax circumstances. This section also does not deal with all
aspects of taxation that may be relevant to certain types of stockholders to
which special provisions of the Federal income tax laws apply, including:

o dealers in securities or currencies;

o traders in securities that elect to use a mark-to-market method of
accounting for their securities holdings;

o banks and other financial institutions;

o tax-exempt organizations (except to the limited extent discussed in
"Federal Income Tax Consequences of Our Status as a REIT -- Taxation of
Tax-Exempt Shareholders");

o certain insurance companies;

o persons liable for the alternative minimum tax;

o persons that hold common stock as a hedge against interest rate or
currency risks or as part of a straddle or conversion transaction;

o non-U.S. individuals and foreign corporations (except to the limited
extent discussed in "Federal Income Tax Consequences of Our Status as a
REIT -- Taxation of Non-U.S. Shareholders"); and

o stockholders whose functional currency is not the U.S. dollar.

The statements in this section are based on the Code, its legislative history,
current and proposed regulations under the Code, published rulings and court
decisions. This summary describes the provisions of these sources of law only
as they are currently in effect. All of these sources of law may change at any
time, and any change in the law may apply retroactively. We cannot assure you
that new laws, interpretations of law or court decisions, any of which may take
effect retroactively, will not cause any statement in this section to be
inaccurate.

THIS SECTION IS NOT A SUBSTITUTE FOR CAREFUL TAX PLANNING. WE URGE YOU TO
CONSULT YOUR TAX ADVISOR REGARDING THE SPECIFIC TAX CONSEQUENCES TO YOU OF
OWNERSHIP OF OUR COMMON SHARES AND OF OUR ELECTION TO BE TAXED AS A REIT.
SPECIFICALLY, YOU SHOULD CONSULT YOUR TAX ADVISOR REGARDING THE FEDERAL, STATE,
LOCAL, FOREIGN, AND OTHER TAX CONSEQUENCES TO YOU REGARDING THE PURCHASE,
OWNERSHIP AND SALE OF COMMON SHARES. YOU SHOULD ALSO CONSULT WITH YOUR TAX
ADVISOR REGARDING THE IMPACT OF POTENTIAL CHANGES IN THE APPLICABLE TAX LAWS.

TAXATION OF OUR COMPANY

We intend to elect to be taxed as a REIT under Sections 856 through 860 of
Code, commencing with our taxable year ending December 31, 2004.

Willkie Farr & Gallagher, LLP, has provided us an opinion that commencing with
our taxable year ending December 31, 2004, we will have been organized in
conformity with the requirements for qualification and taxation as a REIT under
the Internal Revenue Code, and our proposed method of operation will enable us
to continue to meet the requirements for qualification and taxation as a REIT
under the Internal Revenue Code. You should be aware, however, that opinions of
counsel are not binding upon the Internal Revenue Service or any court. In
providing its opinion, Willkie Farr & Gallagher, LLP is relying, as to certain
factual matters, upon the statements and representations contained in
certificates provided to Willkie Farr & Gallagher, LLP by us.

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Our qualification as a REIT will depend upon our continuing satisfaction of the
requirements of the Internal Revenue Code relating to qualification for REIT
status. Some of these requirements depend upon actual operating results,
distribution levels, diversity of stock ownership, asset composition, source of
income and record keeping. Accordingly, while we intend to continue to qualify
to be taxed as a REIT, the actual results of our operations for any particular
year might not satisfy these requirements. Willkie Farr & Gallagher, LLP will
not monitor our compliance with the requirements for REIT qualification on an
ongoing basis. Accordingly, no assurance can be given that the actual results
of our operation for any particular taxable year will satisfy such
requirements. For a discussion of the tax consequences of our failure to
qualify as a REIT. See "Federal Income Tax Consequences of Our Status as a
REIT--Failure to Qualify as a REIT."

The sections of the Internal Revenue Code relating to qualification and
operation as a REIT, and the federal income taxation of a REIT and its
shareholders, are highly technical and complex. The following discussion sets
forth only the material aspects of those sections. This summary is qualified in
its entirety by the applicable Code provisions and the related rules and
regulations.

As a REIT, we generally are not subject to federal income tax on the taxable
income that we distribute to our shareholders. The benefit of that tax
treatment is that it avoids the "double taxation," or taxation at both the
corporate and shareholder levels, that generally results from owning shares in
a corporation. Our distributions, however, will generally not be eligible for
(i) the lower rate of tax applicable to dividends received by an individual or
(ii) the corporate dividends received deduction. Further, we will be subject to
federal tax in the following circumstances:

o 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.

o Second, under certain circumstances, we may have to pay the alternative
minimum tax on its items of tax preference.

o Third, if we have (a) net income from the sale or other disposition of
"foreclosure property," as defined in the Internal Revenue 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.

o Fourth, if we have net income from "prohibited transactions," as defined
in the Internal Revenue 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
currently intend to dispose of any of our properties and 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.

o 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 -- Income Tests," 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) 90% 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.

o Sixth, 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.

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o Seventh, 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.

o Eighth, if we receive non-arm's length income from one of our taxable
REIT subsidiaries (as defined under "-- Requirements for Qualification --
Asset Tests"), we will be subject to a 100% tax on the amount of our
non-arm's length income.

REQUIREMENTS FOR QUALIFICATION

To qualify as a REIT, we must elect to be treated as a REIT, and we must meet
various (a) organizational requirements, (b) gross income tests, (c) asset
tests, and (d) annual dividend requirements.

ORGANIZATIONAL REQUIREMENTS

The Code defines a REIT as a corporation, trust or association:

o that is managed by one or more trustees or directors;

o the beneficial ownership of which is evidenced by transferable shares, or
by transferable certificates of beneficial interest;

o that would otherwise be taxable as a domestic corporation, but for
Sections 856 through 859 of the Internal Revenue Code;

o that is neither a financial institution nor an insurance company to which
certain provisions of the Code apply;

o the beneficial ownership of which is held by 100 or more persons;

o 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 Code to also include certain
entities; and

o which meets certain other tests, described below, regarding the nature
of its income and assets.

The Code provides that the conditions described in the first through fourth
bullet points above must be met during the entire taxable year and that the
condition described in the fifth bullet point above must be met during at least
335 days of a taxable year of 12 months, or during a proportionate part of a
taxable year of less than 12 months.

We expect that we will satisfy the conditions described in the first through
fifth bullet points of the preceding paragraph and believe that we will also
satisfy the condition described in the sixth bullet point of the preceding
paragraph. In addition, our Charter provides for restrictions regarding the
ownership and transfer of our common stock. These restrictions are intended to
assist us in continuing to satisfy the share ownership requirements described
in the fifth and sixth bullet points of the preceding paragraph. The ownership
and transfer restrictions pertaining to the common stock are described in this
prospectus under the heading "Description of Securities -- Restrictions on
Transfer."

For purposes of determining share ownership under the sixth bullet point, an
"individual" generally includes a supplemental unemployment compensation
benefits plan, a private foundation, or a portion of a trust permanently set
aside or used exclusively for charitable purposes. An "individual," however,
generally does not include a trust that is a qualified employee pension or
profit sharing trust under the federal income tax laws, and beneficiaries of
such a trust will be treated as holding our shares in proportion to their
actuarial interests in the trust for purposes of the sixth bullet point.

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A corporation that is a "qualified REIT subsidiary," or QRS, is not treated as
a corporation separate from its parent REIT. All assets, liabilities, and items
of income, deduction, and credit of a "qualified REIT subsidiary" are treated
as assets, liabilities, and items of income, deduction, and credit of the REIT.
A "qualified REIT subsidiary" is a corporation, all of the capital stock of
which is owned by the REIT. Thus, in applying the requirements described
herein, any "qualified REIT subsidiary" that we own will be ignored, and all
assets, liabilities, and items of income, deduction, and credit of such
subsidiary will be treated as our assets, liabilities, and items of income,
deduction, and credit.

An unincorporated domestic entity, such as a limited liability company, that
has a single owner, generally is not treated as an entity separate from its
owner for federal income tax purposes. An unincorporated domestic entity with
two or more owners is generally treated as a partnership for federal income tax
purposes. In the case of a REIT that is a partner in a partnership, the REIT is
treated as owning its proportionate share of the assets of the partnership and
as earning its allocable share of the gross income of the partnership for
purposes of the applicable REIT qualification tests.

If, as in our case, a REIT is a partner in a partnership, Treasury Regulations
provide that the REIT will be deemed to own its proportionate capital share of
the assets of the partnership and will be deemed to be entitled to the income
of the partnership attributable to that capital share. In addition, the
character of the assets and gross income of the partnership will retain the
same character in the hands of the REIT for purposes of Section 856 of the
Code, including satisfying the gross income tests and the asset tests. Thus,
our proportionate share of the assets, liabilities and items of income of our
Operating Partnership, which will be our principal asset, will be treated as
our assets, liabilities and items of income for purposes of applying the
requirements described in this section. In addition, actions taken by our
Operating Partnership or any other entity that is either a disregarded entity
(including a qualified REIT subsidiary) or partnership in which we own an
interest, either directly or through one or more tiers of disregarded entities
(including qualified REIT subsidiaries) or partnerships such as our Operating
Partnership, can affect our ability to satisfy the REIT income and assets tests
and the determination of whether we have net income from prohibited
transactions. Accordingly, for purposes of this discussion, when we discuss our
actions, income or assets we intend that to include the actions, income or
assets of our Operating Partnership or any entity that is either a disregarded
entity (including a qualified REIT subsidiary) or partnership for U.S. Federal
income tax purposes in which we maintain an interest through multiple tiers of
disregarded entities (including qualified REIT subsidiaries) or partnerships.

TAXABLE REIT SUBSIDIARIES

A taxable REIT subsidiary ("TRS") is any corporation in which a REIT directly
or indirectly owns stock, provided that the REIT and that corporation make a
joint election to treat that corporation as a TRS. The election can be revoked
at any time as long as the REIT and the TRS revoke such election jointly. In
addition, if a TRS holds directly or indirectly, more than 35% of the
securities of any other corporation (by vote or by value), then that other
corporation is also treated as a TRS. A corporation can be a TRS with respect
to more than one REIT. We intend to make a TRS election for our Services
Company.

A TRS is subject to Federal income tax at regular corporate rates (maximum rate
of 35%), and may also be subject to state and local taxation. Any dividends
paid or deemed paid by any one of our TRSs will also be subject to tax, either
(i) to us if we do not pay the dividends received to our stockholders as
dividends, or (ii) to our stockholders if we do pay out the dividends received
to our stockholders. Further, the rules impose a 100% excise tax on
transactions between a TRS and its parent REIT or the REIT's tenants that are
not conducted on an arm's-length basis. We may hold more than 10% of the stock
of a TRS without jeopardizing our qualification as a REIT notwithstanding the
rule described below under "Asset Tests" that generally precludes ownership of
more than 10% (by vote or value) of any issuer's securities. However, as noted
below, in order for us to qualify as a REIT, the securities of all of the TRSs
in which we have invested either directly or indirectly may not represent more
than 20% of the total value of our assets. We expect that the aggregate value
of all of our interests in TRSs will represent less than 20% of the total value
of our

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assets, and will, to the extent necessary, limit the activities of the Services
Company or take other actions necessary to satisfy the 20% value limit. We
cannot, however, assure that we will always satisfy the 20% value limit or that
the IRS will agree with the value we assign to the Services Company and any
other TRS we own an interest in.

A TRS is not permitted to directly or indirectly operate or manage a "lodging
facility." A "lodging facility" is defined as a "hotel, motel or other
establishment more than one-half of the dwelling units in which are used on a
transient basis." We have been advised by counsel that our Services Company
will not be considered to operate or manage a lodging facility. Although the
Services Company is expected to lease certain of our student housing properties
on a short term basis during the summer months and occasionally during other
times of the year, we have been advised that such limited short term leasing
will not cause the Services Company to be considered to directly or indirectly
operate or manage a lodging facility. Counsel's opinion is based in part on
Treasury Regulations interpreting similar language applicable to other
provisions of the Code. Treasury Regulations or other guidance specifically
adopted for purposes of the TRS provisions might take a different approach,
and, even absent such guidance, the IRS might take a view contrary to that of
counsel. In such an event, we might be forced to change our method of operating
the Services Company, which could adversely affect us, or could cause the
Services Company to fail to qualify as a TRS, in which event we could fail to
qualify as a REIT.

We may engage in activities indirectly though a TRS as necessary or convenient
to avoid receiving the benefit of income or services that would jeopardize our
REIT status if we engaged in the activities directly. In particular, we would
likely engage in activities through a TRS for providing services that are
non-customary and services to unrelated parties (such as our third party
development and management services) that might produce income that does not
qualify under the gross income tests described below. We might also hold
certain properties in the Services Company, such as our interest in certain of
the leasehold properties if we determine that the ownership structure of such
properties may produce income that would not qualify for purposes of the REIT
income tests described below.

GROSS INCOME TESTS. We must satisfy two gross income tests annually to
maintain our qualification as a REIT.

First, at least 75% of our gross income for each taxable year must consist of
defined types of income that we derive, directly or indirectly, from
investments relating to real property or mortgages on real property or
qualified temporary investment income. Qualifying income for purposes of that
75% gross income test generally includes:

o rents from real property;

o interest on debt secured by mortgages on real property, or on interests
in real property;

o dividends or other distributions on, and gain from the sale of, shares
in other REITs;

o gain from the sale of real estate assets; and

o 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.

Second, in general, at least 95% of our gross income for each taxable year must
consist of income that is qualifying income for purposes of the 75% gross
income test, other types of interest and dividends, gain from the sale or
disposition of stock or securities, income from certain hedging instruments or
any combination of these. Gross income from our sale of property that we hold
primarily for sale to customers in the ordinary course of business is excluded
from both the numerator and the denominator in both income tests. The following
paragraphs discuss the specific application of the gross income tests to us.

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Rents from Real Property. Rent that we receive from our real property will
qualify as "rents from real property," which is qualifying income for purposes
of the 75% and 95% gross income tests, only if the following conditions are
met:

o 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.

o 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 Services Company or
another TRS. 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 TRSs.
Under an exception to the related-party tenant rule described in the preceding
paragraph, rent that we receive from a TRS 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 TRSs 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.

o 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.

o 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

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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 TRSs, which may provide
noncustomary services to our tenants without tainting our rents from the
related properties.

We do not intend to perform any services other than customary ones for our
lessees, other than services provided through independent contractors or TRSs.
If a portion of the rent we receive from a property does not qualify as "rents
from real property" because the rent attributable to personal property exceeds
15% of the total rent for a taxable year, the portion of the rent attributable
to personal property will not be qualifying income for purposes of either the
75% or 95% gross income test. If rent attributable to personal property, plus
any other income that is nonqualifying income for purposes of the 95% gross
income test, during a taxable year exceeds 5% of our gross income during the
year, we would lose our REIT status. By contrast, in the following
circumstances, none of the rent from a lease of property would qualify as
"rents from real property": (1) the rent is considered based on the income or
profits of the lessee; (2) the lessee is a related party tenant or fails to
qualify for the exception to the related-party tenant rule for qualifying TRSs;
or (3) we furnish noncustomary services to the tenants of the property, or
manage or operate the property, other than through a qualifying independent
contractor or a TRS and our income from the services exceeds 1% of our income
from the related property.

Tenants may be required to pay, besides base rent, reimbursements for certain
amounts we are obligated to pay to third parties (such as utility and telephone
companies), penalties for nonpayment or late payment of rent, lease application
or administrative fees. These and other similar payments should qualify as
"rents from real property."

Interest. The term "interest" generally does not include any amount
received or accrued, directly or indirectly, if the determination of the amount
depends in whole or in part on the income or profits of any person. However, an
amount received or accrued generally will not be excluded from the term
"interest" solely because it is based on a fixed percentage or percentages of
receipts or sales. Furthermore, in the case of a shared appreciation mortgage,
any additional interest received on a sale of the secured property will be
treated as gain from the sale of the secured property.

Prohibited Transactions. A REIT will incur a 100% tax on the net income
derived from any sale or other disposition of property, other than foreclosure
property, that the REIT holds primarily for sale to customers in the ordinary
course of a trade or business. [We do not have any current intention to sell
any of our properties.] Even if we do sell any of our properties, we believe
that none of our assets will be held primarily for sale to customers and that a
sale of any of our assets will not be in the ordinary course of our business.
Whether a REIT holds an asset "primarily for sale to customers in the ordinary
course of a trade or business" depends, however, on the facts and circumstances
in effect from time to time, including those related to a particular asset.
Nevertheless, we will attempt to comply with the terms of safe-harbor
provisions in the federal income tax laws prescribing when an asset sale will
not be characterized as a prohibited transaction.

Foreclosure Property. We will be subject to tax at the maximum corporate
rate on certain income from foreclosure property. We do not own any foreclosure
properties and do not expect to own any foreclosure properties in the future.
This would only change in the future if we were to make loans to third parties
secured by real property.

Hedging Transactions. From time to time, we may enter into hedging
transactions with respect to one or more of our assets or liabilities. Our
hedging activities may include entering into interest rate swaps, caps, and
floors, options to purchase such items, and futures and forward contracts. Any
periodic income or gain from the disposition of any financial instrument for
these or similar transactions to hedge indebtedness we incur to acquire or
carry "real estate assets" should be

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qualifying income for purposes of the 95% gross income test, but not the 75%
gross income test. Since the financial markets continually introduce new and
innovative instruments related to risk-sharing or trading, it is not entirely
clear which such instruments will generate income which will be considered
qualifying income for purposes of the gross income tests. We intend to
structure any hedging or similar transactions so as not to jeopardize our
status as a REIT.

FAILURE TO SATISFY GROSS INCOME TESTS. If we fail to satisfy one or both of the
gross income tests for any taxable year, we nevertheless may qualify as a REIT
for that year if we qualify for relief under certain provisions of the federal
income tax laws. Those relief provisions generally will be available if:

o our failure to meet the income tests was due to reasonable cause and not
due to willful neglect;

o we attach a schedule of the sources of our income to our tax return; and

o any incorrect information on the schedule is not due to fraud with
intent to evade tax.

We cannot with certainty predict whether any failure to meet these tests will
qualify for the relief provisions. As discussed above in "Taxation of Our
Company," even if the relief provisions apply, we would incur a 100% tax on the
gross income attributable to the greater of the amounts by which we fail the
75% and 95% gross income tests, multiplied by a fraction intended to reflect
our profitability.

ASSET TESTS. To maintain our qualification as a REIT, we also must satisfy the
following asset tests at the end of each quarter of each taxable year:

o 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 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;

o 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;

o Third, we may not own more than 10% of the voting power or value of any
one issuer's outstanding securities;

o Fourth, no more than 20% of the value of our total assets may consist of
the securities of one or more TRSs; and

o Fifth, no more than 25% of the value of our total assets may consist of
the securities of TRSs and other non-TRS taxable subsidiaries and other
assets that are not qualifying assets for purposes of the 75% asset test.

For purposes of the second and third asset tests, the term "securities" does
not include stock in another REIT, equity or debt securities of a qualified
REIT subsidiary or TRS, mortgage loans that constitute real estate assets, or
equity interests in a partnership. The term "securities," however, generally
includes debt securities issued by a partnership or another REIT, except that
certain "straight debt" securities are not treated as "securities" for purposes
of the 10% value test (for example, qualifying debt securities of a corporation
if such securities are the only interests we or any TRS of ours owns in that
corporation, or qualifying debt securities of a partnership if we own at least
a 20% profits interest in the partnership).

We will monitor the status of our assets for purposes of the various asset
tests and will manage our portfolio in order to comply at all times with such
tests. If we fail to satisfy the asset tests at the end of a calendar quarter,
we will not lose our REIT status if:

o we satisfied the asset tests at the end of the preceding calendar quarter;
and

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o 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.

If we did not satisfy the condition described in the second item, above, we
still could avoid disqualification by eliminating any discrepancy within 30
days after the close of the calendar quarter in which it arose.

DISTRIBUTION REQUIREMENTS. Each taxable year, we must distribute dividends,
other than capital gain dividends and deemed distributions of retained capital
gain, to our shareholders in an aggregate amount not less than: the sum of (a)
90% of our "REIT taxable income," computed without regard to the dividends-paid
deduction or our net capital gain or loss, and (b) 90% of our after-tax net
income, if any, from foreclosure property, minus the sum of certain items of
non-cash income.

We must pay such dividends in the taxable year to which they relate, or in the
following taxable year if we declare the dividend before we timely file our
federal income tax return for the year and pay the dividend on or before the
first regular dividend payment date after such declaration.

To the extent that we do not distribute all of our net capital gain or
distribute at least 90%, but less than 100%, of our real estate investment
trust taxable income, as adjusted, we will have to pay tax on those amounts at
regular ordinary and capital gain corporate tax rates. Furthermore, if we fail
to distribute during each calendar year at least the sum of (a) 85% of our
ordinary income for that year, (b) 95% of our capital gain net income for that
year and (c) any undistributed taxable income from prior periods, we would have
to pay a 4% nondeductible excise tax on the excess of the required dividend
over the amounts actually distributed.

We may elect to retain and pay income tax on the net long-term capital gain we
receive in a taxable year. See "Federal Income Tax Consequences of Our Status
as a REIT -- Taxation of Taxable U.S. Shareholders." If we so elect, we will be
treated as having distributed any such retained amount for purposes of the 4%
excise tax described above. We intend to make timely dividends sufficient to
satisfy the annual dividend requirements and to avoid corporate income tax and
the 4% excise tax.

It is possible that, from time to time, we may experience timing differences
between the actual receipt of income and actual payment of deductible expenses
and the inclusion of that income and deduction of such expenses in arriving at
our REIT taxable income. For example, we may not deduct recognized capital
losses from our "REIT taxable income." Further, it is possible that, from time
to time, we may be allocated a share of net capital gain attributable to the
sale of depreciated property that exceeds our allocable share of cash
attributable to that sale. As a result of the foregoing, we may have less cash
than is necessary to distribute all of our taxable income and thereby avoid
corporate income tax and the excise tax imposed on certain undistributed
income. In such a situation, we may need to borrow funds or issue additional
common or preferred shares or pay dividends in the form of taxable stock
dividends.

Under certain circumstances, we may be able to correct a failure to meet the
dividend requirement for a year by paying "deficiency dividends" to our
shareholders in a later year. We may include such deficiency dividends in our
deduction for dividends paid for the earlier year. Although we may be able to
avoid income tax on amounts distributed as deficiency dividends, we will be
required to pay interest based upon the amount of any deduction we take for
deficiency dividends.

RECORDKEEPING REQUIREMENTS. We must maintain certain records in order to
qualify as a REIT. In addition, to avoid paying a penalty, we must request on
an annual basis information from our shareholders designed to disclose the
actual ownership of the outstanding common shares. We have complied and intend
to continue to comply with these requirements.

ACCOUNTING PERIOD. In order to elect to be taxed as a REIT, we must use a
calendar year accounting period. We intend to and will use the calendar year as
our accounting period for federal income tax purposes for each and every year
we intend to operate as a REIT.

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FAILURE TO QUALIFY AS A REIT. If we failed to qualify as a REIT in any taxable
year and no relief provision applied, we would have the following consequences.
We would be subject to federal income tax and any applicable alternative
minimum tax at rates applicable to regular C corporations on our taxable
income, determined without reduction for amounts distributed to shareholders.
We would not be required to make any dividends to shareholders, and any
dividends to shareholders would be taxable as ordinary income to the extent of
our current and accumulated earnings and profits (which may be subject to tax
at preferential rates to individual shareholders). Corporate shareholders could
be eligible for a dividends-received deduction if certain conditions are
satisfied. Unless we qualified for relief under specific statutory provisions,
we would not be permitted to elect taxation as a REIT for the four taxable
years following the year during which we ceased to qualify as a REIT. We might
not be entitled to the statutory relief described in this paragraph in all
circumstances.

TAXATION OF TAXABLE U.S. SHAREHOLDERS

As used in this section, the term "U.S. shareholder" means a holder of common
stock who, for United States Federal income tax purposes, is:

o a citizen or resident of the United States;

o a domestic corporation;

o an estate whose income is subject to United States Federal income
taxation regardless of its source; or

o 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.

As long as we qualify as a REIT, dividends made by us out of our current or
accumulated earnings and profits, and not designated as capital gain dividends,
will constitute dividends taxable to our taxable U.S. shareholders as ordinary
income. Under recently enacted law, individuals receiving "qualified
dividends," dividends from domestic and certain qualifying foreign subchapter C
corporations, may be entitled to the new lower rates on dividends (at rates
applicable to long-term capital gains, currently at a maximum rate of 15%)
provided certain holding period requirements are met. However, individuals
receiving dividend distributions from us, a REIT, will generally not be
eligible for the new lower rates on dividends except with respect to the
portion of any distribution which (a) represents dividends being passed through
to us from a corporation in which we own shares (but only if such dividends
would be eligible for the new lower rates on dividends if paid by the
corporation to its individual shareholders), including dividends from our TRS,
(b) which is equal to our REIT taxable income (taking into account the
dividends paid deduction available to us) less any taxes paid by us on these
items during our previous taxable year, or (c) are attributable to built-in
gains realized and recognized by us from disposition of properties acquired by
us in non-recognition transaction, less any taxes paid by us on these items
during our previous taxable year. Individual taxable U.S. shareholders should
consult their own tax advisors to determine the impact of this new legislation.
Dividends of this kind will not be eligible for the dividends received
deduction in the case of taxable U.S. shareholders that are corporations.
Dividends made by us that we properly designate as capital gain dividends will
be taxable to taxable U.S. shareholders as gain from the sale of a capital
asset held for more than one year, to the extent that they do not exceed our
actual net capital gain for the taxable year, without regard to the period for
which a taxable U.S. shareholder has held his common stock. Thus, with certain
limitations, capital gain dividends received by an individual taxable U.S.
shareholder may be eligible for preferential rates of taxation. Taxable U.S.
shareholders that are corporations may, however, be required to treat up to 20%
of certain capital gain dividends as ordinary income.

To the extent that we pay dividends, not designated as capital gain dividends,
in excess of our current and accumulated earnings and profits, these dividends
will be treated first as a tax-free return of capital to each taxable U.S.
shareholder. Thus, these dividends will reduce the adjusted basis which

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the taxable U.S. shareholder has in our common stock for tax purposes by the
amount of the dividend, but not below zero. Dividends in excess of a taxable
U.S. shareholder's adjusted basis in his common stock will be taxable as
capital gains, provided that the common stock have been held as a capital
asset.

Dividends authorized by us in October, November, or December of any year and
payable to a shareholder of record on a specified date in any of these months
will be treated as both paid by us and received by the shareholder on
December 31 of that year, provided that we actually pay the dividend in
January of the following calendar year. Shareholders may not include in their
own income tax returns any of our net operating losses or capital losses.

We may elect to retain, rather than distribute, all or a portion of our net
long-term capital gains and pay the tax on such gains. If we make such an
election, we will designate amounts as undistributed capital gains in respect
of your shares or beneficial interests by written notice to you which we will
mail out to you with our annual report or at any time within 60 days after
December 31 of any year. When we make such an election, taxable U.S.
shareholders holding common stock at the close of our taxable year will be
required to include, in computing their long-term capital gains for the taxable
year in which the last day of our taxable year falls, the amount that we
designate in a written notice mailed to our shareholders. We may not designate
amounts in excess of our undistributed net capital gain for the taxable year.
Each taxable U.S. shareholder required to include the designated amount in
determining the shareholder's long-term capital gains will be deemed to have
paid, in the taxable year of the inclusion, the tax paid by us in respect of
the undistributed net capital gains. Taxable U.S. shareholders to whom these
rules apply will be allowed a credit or a refund, as the case may be, for the
tax they are deemed to have paid. Taxable U.S. shareholders will increase their
basis in their common stock by the difference between the amount of the
includible gains and the tax deemed paid by the shareholder in respect of these
gains.

Dividends made by us and gain arising from a taxable U.S. shareholder's sale or
exchange of our common stock will not be treated as passive activity income. As
a result, taxable U.S. shareholders generally will not be able to apply any
passive losses against that income or gain.

When a taxable U.S. shareholder sells or otherwise disposes of our common
stock, the shareholder will recognize gain or loss for Federal income tax
purposes in an amount equal to the difference between (a) the amount of cash
and the fair market value of any property received on the sale or other
disposition, and (b) the holder's adjusted basis in the common stock for tax
purposes. This gain or loss will be capital gain or loss if the U.S.
shareholder has held the common stock as a capital asset. The gain or loss will
be long-term gain or loss if the U.S. shareholder has held the common stock for
more than one year. Long-term capital gain of an individual taxable U.S.
shareholder is generally taxed at preferential rates. The highest marginal
individual income tax rate is currently 35%. The maximum tax rate on long-term
capital gain applicable to individuals is 15% for sales and exchanges of assets
held for more than one year and occurring after May 6, 2003 through December
31, 2008. The maximum tax rate on long-term capital gain from the sale or
exchange of "section 1250 property" (i.e., generally, depreciable real
property) is 25% to the extent the gain would have been treated as ordinary
income if the property were "section 1245 property" (i.e., generally,
depreciable personal property). We generally may designate whether a
distribution we designate as capital gain dividends (and any retained capital
gain that we are deemed to distribute) is taxable to non-coporate shareholders
at a 15% or 25% rate. The characterization of income as capital gain or
ordinary income may affect the deductibility of capital losses. A non-corporate
taxpayer may deduct capital losses not offset by capital gains against its
ordinary income only up to a maximum of $3,000 annually. A non-corporate
taxpayer may carry unused capital losses forward indefinitely. A corporate
taxpayer must pay tax on its net capital gain at corporate ordinary-income
rates. A corporate taxpayer may deduct capital losses only to the extent of
capital gains, with unused losses carried back three years and forward five
years. In general, any loss recognized by a taxable U.S. shareholder when the
shareholder sells or otherwise disposes of our common stock that the
shareholder has held for six months or less, after applying certain holding
period rules, will be treated as a long-term capital loss, to the extent of
dividends received by the shareholder from us which were required to be treated
as long-term capital gains.

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INFORMATION REPORTING REQUIREMENTS AND BACKUP WITHHOLDING. We will report to
our shareholders and to the Internal Revenue Service the amount of dividends we
pay during each calendar year and the amount of tax we withhold, if any. A
shareholder may be subject to backup withholding at a rate of 28% with respect
to dividends unless the holder:

o is a corporation or comes within certain other exempt categories and,
when required, demonstrates this fact; or

o 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.

A shareholder who does not provide us with its correct taxpayer identification
number also may be subject to penalties imposed by the Internal Revenue
Service. Any amount paid as backup withholding will be creditable against the
shareholder's income tax liability. In addition, we may be required to withhold
a portion of capital gain dividends to any shareholders who fail to certify
their non-foreign status to us. For a discussion of the backup withholding
rules as applied to non-U.S. shareholders, see "Taxation of Non-U.S.
Shareholders."

TAXATION OF TAX-EXEMPT SHAREHOLDERS. Amounts distributed as dividends by a REIT
generally do not constitute unrelated business taxable income when received by
a tax-exempt entity. Provided that a tax-exempt shareholder is not one of the
types of entity described in the next paragraph and has not held its common
stock as "debt financed property" within the meaning of the Internal Revenue
Code, and the common stock are not otherwise used in a trade or business, the
dividend income from the common stock will not be unrelated business taxable
income to a tax-exempt shareholder. Similarly, income from the sale of common
stock will not constitute unrelated business taxable income unless the
tax-exempt shareholder has held the common stock as "debt financed property"
within the meaning of the Internal Revenue Code or has used the common stock in
a trade or business.

Income from an investment in our common stock will constitute unrelated
business taxable income for tax-exempt shareholders that are social clubs,
voluntary employee benefit associations, supplemental unemployment benefit
trusts, and qualified group legal services plans exempt from Federal income
taxation under the applicable subsections of Section 501(c) of the Internal
Revenue Code, unless the organization is able to properly deduct amounts set
aside or placed in reserve for certain purposes so as to offset the income
generated by its common stock. Prospective investors of the types described in
the preceding sentence should consult their own tax advisors concerning these
"set aside" and reserve requirements.

Notwithstanding the foregoing, however, a portion of the dividends paid by a
"pension-held REIT" will be treated as unrelated business taxable income to any
trust which:

o is described in Section 401(a) of the Internal Revenue Code;

o is tax-exempt under Section 501(a) of the Internal Revenue Code; and

o holds more than 10% (by value) of the equity interests in the REIT.

Tax-exempt pension, profit-sharing and stock bonus funds that are described in
Section 401(a) of the Internal Revenue Code are referred to below as "qualified
trusts." A REIT is a "pension-held REIT" if:

o it would not have qualified as a REIT but for the fact that
Section 856(h)(3) of the Internal Revenue 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

o 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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The percentage of any REIT dividend treated as unrelated business taxable
income to a qualifying trust is equal to the ratio of (a) the gross income of
the REIT from unrelated trades or businesses, determined as though the REIT
were a qualified trust, less direct expenses related to this gross income, to
(b) the total gross income of the REIT, less direct expenses related to the
total gross income. A de minimis exception applies where this percentage is
less than 5% for any year. We do not expect to be classified as a pension-held
REIT, but this cannot be guaranteed.

The rules described above under the heading "Taxation of Taxable U.S.
shareholders" concerning the inclusion of our designated undistributed net
capital gains in the income of our shareholders will apply to tax-exempt
entities. Thus, tax-exempt entities will be allowed a credit or refund of the
tax deemed paid by these entities in respect of the includible gains.

TAXATION OF NON-U.S. SHAREHOLDERS. The rules governing U.S. federal income
taxation of nonresident alien individuals, foreign corporations, foreign
partnerships, and other foreign shareholders are complex. This section is only
a summary of such rules. We urge non-U.S. shareholders to consult their own tax
advisors to determine the impact of federal, state, and local income tax laws
on ownership of common shares, including any reporting requirements.

Ordinary Dividends. Dividends, other than dividends that are treated as
attributable to gain from sales or exchanges by us of U.S. real property
interests, as discussed below, and other than dividends designated by us as
capital gain dividends, will be treated as ordinary income to the extent that
they are made out of our current or accumulated earnings and profits. A
withholding tax equal to 30% of the gross amount of the dividend will
ordinarily apply to dividends of this kind to non-U.S. shareholders, unless an
applicable tax treaty reduces that tax. However, if income from the investment
in the common stock is treated as effectively connected with the non-U.S.
shareholder's conduct of a U.S. trade or business or is attributable to a
permanent establishment that the non-U.S. shareholder maintains in the United
States if that is required by an applicable income tax treaty as a condition
for subjecting the non-U.S. shareholder to U.S. taxation on a net income basis,
tax at graduated rates will generally apply to the non-U.S. shareholder in the
same manner as U.S. shareholders are taxed with respect to dividends, and the
30% branch profits tax may also apply if the shareholder is a foreign
corporation. We expect to withhold U.S. tax at the rate of 30% on the gross
amount of any dividends, other than dividends treated as attributable to gain
from sales or exchanges of U.S. real property interests and capital gain
dividends, paid to a non-U.S. shareholder, unless (a) a lower treaty rate
applies and the required form evidencing eligibility for that reduced rate
(ordinarily, IRS Form W-8 BEN) is filed with us or the appropriate withholding
agent or (b) the non-U.S. shareholder files an IRS Form W-8 ECI or a successor
form with us or the appropriate withholding agent claiming that the dividends
are effectively connected with the non-U.S. shareholder's conduct of a U.S.
trade or business.

Dividends to a non-U.S. shareholder that are designated by us at the time of
dividend as capital gain dividends which are not attributable to or treated as
attributable to the disposition by us of a U.S. real property interest
generally will not be subject to U.S. Federal income taxation, except as
described below.

Return of Capital. Dividends in excess of our current and accumulated
earnings and profits, which are not treated as attributable to the gain from
our disposition of a U.S. real property interest, will not be taxable to a
non-U.S. shareholder to the extent that they do not exceed the adjusted basis
of the non-U.S. shareholder's common stock. Dividends of this kind will instead
reduce the adjusted basis of the common stock. To the extent that dividends of
this kind exceed the adjusted basis of a non-U.S. shareholder's common stock,
they will give rise to tax liability if the non-U.S. shareholder otherwise
would have to pay tax on any gain from the sale or disposition of its common
stock, as described below. If it cannot be determined at the time a dividend is
made whether the dividend will be in excess of current and accumulated earnings
and profits, withholding will apply to the dividend at the rate applicable to
dividends. However, the non-U.S. shareholder may seek a refund of these amounts
from the IRS if it is subsequently determined that the dividend was, in fact,
in excess of our current accumulated earnings and profits.

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Capital Gain Dividends. For any year in which we qualify as a REIT,
dividends that are attributable to gain from sales or exchanges by us of U.S.
real property interests will be taxed to a non-U.S. shareholder under the
provisions of the Foreign Investment in Real Property Tax Act of 1980, as
amended. Under this statute, these dividends are taxed to a non-U.S.
shareholder as if the gain were effectively connected with a U.S. business.
Thus, non-U.S. shareholders will be taxed on the dividends at the normal
capital gain rates applicable to U.S. shareholders, subject to any applicable
alternative minimum tax and special alternative minimum tax in the case of
non-U.S. shareholders that are individuals. We are required by applicable
Treasury regulations under this statute to withhold 35% of any dividend that we
could designate as a capital gain dividend. However, if we designate as a
capital gain dividend a dividend made before the day we actually effect the
designation, then although the dividend may be taxable to a non-U.S.
shareholder, withholding does not apply to the dividend under this statute.
Rather, we must effect the 35% withholding from dividends made on and after the
date of the designation, until the dividends so withheld equal the amount of
the prior dividend designated as a capital gain dividend. The non-U.S.
shareholder may credit the amount withheld against its U.S. tax liability.

Sale of Common Stock. Gain recognized by a non-U.S. shareholder upon a
sale or exchange of our common stock generally will not be taxed under the
Foreign Investment in Real Property Tax Act if we are a "domestically
controlled REIT," defined generally as a REIT, less than 50% in value of whose
stock is and was held directly or indirectly by foreign persons at all times
during a specified testing period. We believe that we will be a domestically
controlled REIT, and, therefore, that taxation under this statute generally
will not apply to the sale of our common stock, however, because our stock is
publicly traded, no assurance can be given that the we will qualify as a
domestically controlled REIT at any time in the future. Gain to which this
statute does not apply will be taxable to a non-U.S. shareholder if investment
in the common stock is treated as effectively connected with the non-U.S.
shareholder's U.S. trade or business or is attributable to a permanent
establishment that the non-U.S. shareholder maintains in the United States if
that is required by an applicable income tax treaty as a condition for
subjecting the non-U.S. shareholder to U.S. taxation on a net income basis. In
this case, the same treatment will apply to the non-U.S. shareholder as to U.S.
shareholders with respect to the gain. In addition, gain to which the Foreign
Investment in Real Property Tax Act does not apply will be taxable to a
non-U.S. shareholder if the non-U.S. shareholder is a nonresident alien
individual who was present in the United States for 183 days or more during the
taxable year to which the gain is attributable. In this case, a 30% tax will
apply to the nonresident alien individual's capital gains. A similar rule will
apply to capital gain dividends to which this statute does not apply.

If we were not a domestically controlled REIT, tax under the Foreign Investment
in Real Property Tax Act would apply to a non-U.S. shareholder's sale of common
stock only if the selling non-U.S. shareholder owned more than 5% of the class
of common stock sold at any time during a specified period. This period is
generally the shorter of the period that the non-U.S. shareholder owned the
common stock sold or the five-year period ending on the date when the
shareholder disposed of the common stock. If tax under this statute applies to
the gain on the sale of common stock, the same treatment would apply to the
non-U.S. shareholder as to U.S. shareholders with respect to the gain, subject
to any applicable alternative minimum tax and a special alternative minimum tax
in the case of nonresident alien individuals.

BACKUP WITHHOLDING AND INFORMATION REPORTING. If you are a non-U.S.
shareholder, you are generally exempt from backup withholding and information
reporting requirements with respect to:

o dividend payments,

o 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

o 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

188

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.

Payment of the proceeds from the sale of common stock effected at a foreign
office of a broker generally will not be subject to information reporting or
backup withholding. However, a sale of common stock that is effected at a
foreign office of a broker will be subject to information reporting and backup
withholding if:

o the proceeds are transferred to an account maintained by you in the
United States,

o the payment of proceeds or the confirmation of the sale is mailed to you
at a United States address, or

o the sale has some other specified connection with the United States as
provided in U.S. Treasury regulations,

In addition, a sale of common stock will be subject to information reporting if
it is effected at a foreign office of a broker that is:

o a United States person,

o a controlled foreign corporation for United States tax purposes,

o 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

o 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,

unless the broker does not have actual knowledge or reason to know that you are
a United States person and the documentation requirements described above are
met or you otherwise establish an exemption. Backup withholding will apply if
the sale is subject to information reporting and the broker has actual
knowledge that you are a United States person. You generally may obtain a
refund of any amounts withheld under the backup withholding rules that exceed
your income tax liability by filing a refund claim with the Internal Revenue
Service.

TAX ASPECTS OF OUR INVESTMENTS IN OUR OPERATING PARTNERSHIP. The following
discussion summarizes certain federal income tax considerations applicable to
our direct or indirect investment in our Operating Partnership and any
subsidiary partnerships or limited liability companies we form or acquire, each
individually referred to as a Partnership and, collectively, as Partnerships.
The following discussion does not cover state or local tax laws or any federal
tax laws other than income tax laws.

CLASSIFICATION AS PARTNERSHIPS. We are entitled to include in our income our
distributive share of each Partnership's income and to deduct our distributive
share of each Partnership's losses only if such Partnership is classified for
federal income tax purposes as a partnership, rather than as a corporation or
an association taxable as a corporation. An organization with at least two
owners or partners will be classified as a partnership, rather than as a
corporation, for federal income tax purposes if it:

o is treated as a partnership under the Treasury Regulations relating to
entity classification (the "check-the-box regulations"); and

o is not a "publicly traded" partnership.

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Under the check-the-box regulations, an unincorporated entity with at least two
owners or partners may elect to be classified either as an association taxable
as a corporation or as a partnership. If such an entity does not make an
election, it generally will be treated as a partnership for federal income tax
purposes.

We intend that each partnership we own an interest in will be classified as a
partnership for federal income tax purposes (or else a disregarded entity where
there are not at least two separate beneficial owners).

A publicly traded partnership is a partnership whose interests are traded on an
established securities market or are readily tradable on a secondary market (or
a substantial equivalent). A publicly traded partnership is generally treated
as a corporation for federal income tax purposes, but will not be so treated
for any taxable year for which at least 90% of the partnership's gross income
consists of specified passive income, including real property rents, gains from
the sale or other disposition of real property, interest, and dividends (the
"90% passive income exception"). Treasury regulations provide limited safe
harbors from treatment as a publicly traded partnership. Pursuant to one of
those safe harbors, or private placement exclusion, interests in a partnership
will not be treated as readily tradable on a secondary market or the
substantial equivalent thereof if (1) all interests in the partnership were
issued in a transaction or transactions that were not required to be registered
under the Act, and (2) the partnership does not have more than 100 partners at
any time during the partnership's taxable year. For the determination of the
number of partners in a partnership, a person owning an interest in a
partnership, grantor trust, or S corporation that owns an interest in the
partnership is treated as a partner in the partnership only if (1)
substantially all of the value of the owner's interest in the entity is
attributable to the entity's direct or indirect interest in the partnership and
(2) a principal purpose of the use of the entity is to permit the partnership
to satisfy the 100-partner limitation.

We expect that each partnership we own an interest in will qualify for the
private placement exclusion, one of the other safe harbors from treatment as a
publicly traded partnership, and/or will satisfy the 90% passive income
exception.

INCOME TAXATION OF THE PARTNERSHIPS AND THEIR PARTNERS

We own 99% of the interests in our Operating Partnership and certain subsidiary
partnerships. Entities that we own 100% of the interests in (directly or
through other disregarded entities) will be treated as disregarded entities. In
addition we may hold interests in partnership or LLCs that are not disregarded
entities (the "Partnership or Partnerships").

Partners, Not the Partnerships, Subject to Tax. A partnership is not a
taxable entity for federal income tax purposes. We will therefore take into
account our allocable share of each Partnership's income, gains, losses,
deductions, and credits for each taxable year of the Partnership ending with or
within our taxable year, even if we receive no distribution from the
Partnership for that year or a distribution less than our share of taxable
income. Similarly, even if we receive a distribution, it may not be taxable if
the distribution does not exceed our adjusted tax basis in our interest in the
Partnership.

Partnership Allocations. Although a partnership agreement generally will
determine the allocation of income and losses among partners, allocations will
be disregarded for tax purposes if they do not comply with the provisions of
the federal income tax laws governing partnership allocations. If an allocation
is not recognized for federal income tax purposes, the item subject to the
allocation will be reallocated in accordance with the partners' interests in
the partnership, which will be determined by taking into account all of the
facts and circumstances relating to the economic arrangement of the partners
with respect to such item. Each Partnership's allocations of taxable income,
gain, and loss are intended to comply with the requirements of the federal
income tax laws governing partnership allocations.

Sale of a Partnership's Property. Generally, any gain realized by a
Partnership on the sale of property held for more than one year will be
long-term capital gain, except for any portion of the gain treated as
depreciation or cost recovery recapture. Conversely, our share of any
Partnership gain

190

from the sale of inventory or other property held primarily for sale to
customers in the ordinary course of the Partnership's trade or business will be
treated as income from a prohibited transaction subject to a 100% tax. Income
from a prohibited transaction may have an adverse effect on our ability to
satisfy the gross income tests for REIT status. See "Federal Income Tax
Consequences of Our Status as a REIT -- Requirements for Qualification --
Income Tests." We do not presently intend to acquire or hold, or to allow any
Partnership to acquire or hold, any property that is likely to be treated as
inventory or property held primarily for sale to customers in the ordinary
course of our, or the Partnership's, trade or business.

STATE AND LOCAL TAXES. We and/or our shareholders may be subject to taxation by
various states and localities, including those in which we or a shareholder
transacts business, owns property or resides. The state and local tax treatment
may differ from the federal income tax treatment described above. Consequently,
shareholders should consult their own tax advisors regarding the effect of
state and local tax laws upon an investment in the common shares.

191

ERISA CONSIDERATIONS

GENERAL

The following is a summary of certain material considerations arising under the
Employee Retirement Income Securities Act of 1974, as amended, or ERISA, and
the prohibited transaction provisions of Section 4975 of the Code that may be
relevant to a prospective purchaser. The following summary may also be relevant
to a prospective purchaser that is not an employee benefit plan which is
subject to ERISA, but is a tax-qualified retirement plan or an individual
retirement account, individual retirement annuity, medical savings account or
education individual retirement account, which we refer to collectively as an
"IRA." This discussion does not address all aspects of ERISA or Section 4975 of
the Code or, to the extent not preempted, state law that may be relevant to
particular employee benefit plan stockholders in light of their particular
circumstances, including plans subject to Title I of ERISA, other employee
benefit plans and IRAs subject to the prohibited transaction provisions of
Section 4975 of the Code, and governmental, church, foreign and other plans
that are exempt from ERISA and Section 4975 of the Code but that may be subject
to other federal, state, local or foreign law requirements.

A fiduciary making the decision to invest in shares of our common stock on
behalf of a prospective purchaser which is an ERISA plan, a tax qualified
retirement plan, an IRA or other employee benefit plan is advised to consult
its legal advisor regarding the specific considerations arising under ERISA,
Section 4975 of the Code, and, to the extent not preempted, state law with
respect to the purchase, ownership or sale of shares of our common stock by the
plan or IRA.

Plans should also consider the entire discussion under the heading "Federal
Income Tax Considerations," as material contained in that section is relevant
to any decision by an employee benefit plan, tax-qualified retirement plan or
IRA to purchase our common stock.

EMPLOYEE BENEFIT PLANS, TAX-QUALIFIED RETIREMENT PLANS AND IRAS

Each fiduciary of an "ERISA plan," which is an employee benefit plan subject to
Title I of ERISA, should carefully consider whether an investment in shares of
our common stock is consistent with its fiduciary responsibilities under ERISA.
In particular, the fiduciary requirements of Part 4 of Title I of ERISA require
that:

o an ERISA plan make investments that are prudent and in the best interests
of the ERISA plan, its participants and beneficiaries;

o 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;

o an ERISA plan's investments are authorized under ERISA and the terms of
the governing documents of the ERISA plan; and

o the fiduciary not cause the ERISA plan to enter into transactions
prohibited under Section 406 of ERISA (and certain corresponding
provisions of the Code).

In determining whether an investment in shares of our common stock is prudent
for ERISA purposes, the appropriate fiduciary of an ERISA plan should consider
all of the facts and circumstances, including whether the investment is
reasonably designed, as a part of the ERISA plan's portfolio for which the
fiduciary has investment responsibility, to meet the objectives of the ERISA
plan, taking into consideration the risk of loss and opportunity for gain or
other return from the investment, the diversification, cash flow and funding
requirements of the ERISA plan, and the liquidity and current return of the
ERISA plan's portfolio. A fiduciary should also take into account the nature of
our business, the length of our operating history and other matters described
in the section entitled "Risk Factors."

The fiduciary of an IRA or an employee benefit plan not subject to Title I of
ERISA because it is a governmental or church plan, if no election has been made
under Section 410(d) of the Code, or because it does not cover common law
employees should consider that it may only make investments

192

that are either authorized or not prohibited by the appropriate governing
documents, not prohibited under Section 4975 of the Code and permitted under
applicable state law.

OUR STATUS UNDER ERISA

In some circumstances where an ERISA plan holds an interest in an entity, the
assets of the entity are deemed to be ERISA plan assets. This is known as the
"look-through rule." Under those circumstances, the obligations and other
responsibilities of plan sponsors, plan fiduciaries and plan administrators,
and of parties in interest and disqualified persons, under Parts 1 and 4 of
Subtitle B of Title I of ERISA and Section 4975 of the Code, as applicable, may
be expanded, and there may be an increase in their liability under these and
other provisions of ERISA and the Code (except to the extent (if any) that a
favorable statutory or administrative exemption or exception applies). For
example, a prohibited transaction may occur if our assets are deemed to be
assets of investing ERISA plans and persons who have certain specified
relationships to an ERISA plan ("parties in interest" within the meaning of
ERISA, and "disqualified persons" within the meaning of the Code) deal with
these assets. Further, if our assets are deemed to be assets of investing ERISA
plans, any person that exercises authority or control with respect to the
management or disposition of the assets is an ERISA plan fiduciary.

ERISA plan assets are not defined in ERISA or the Code, but the United States
Department of Labor has issued regulations that outline the circumstances under
which an ERISA plan's interest in an entity will be subject to the look-through
rule. The Department of Labor regulations apply to the purchase by an ERISA
plan of an "equity interest" in an entity, such as stock of a REIT. However,
the Department of Labor regulations provide an exception to the look-through
rule for equity interests that are "publicly offered securities."

Under the Department of Labor regulations, a "publicly offered security" is a
security that is:

o freely transferable;

o part of a class of securities that is widely held; and

o 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.

Whether a security is considered "freely transferable" depends on the facts and
circumstances of each case. Under the Department of Labor regulations, if the
security is part of an offering in which the minimum investment is $10,000 or
less, then any restriction on or prohibition against any transfer or assignment
of the security for the purposes of preventing a termination or
reclassification of the entity for federal or state tax purposes will not
ordinarily prevent the security from being considered freely transferable.
Additionally, limitations or restrictions on the transfer or assignment of a
security which are created or imposed by persons other than the issuer of the
security or persons acting for or on behalf of the issuer will ordinarily not
prevent the security from being considered freely transferable.

A class of securities is considered "widely held" if it is a class of
securities that is owned by 100 or more investors independent of the issuer and
of one another. A security will not fail to be "widely held" because the number
of independent investors falls below 100 subsequent to the initial public
offering as a result of events beyond the issuer's control.

The shares of our common stock offered in this prospectus may meet the criteria
of the publicly offered securities exception to the look-through rule. First,
the common stock could be considered to be freely transferable, as the minimum
investment will be less than $10,000 and the only restrictions upon its
transfer are those generally permitted under the Department of Labor
regulations, those required under federal tax laws to maintain our status as a
REIT, resale restrictions under applicable

193

federal securities laws with respect to securities not purchased pursuant to
this prospectus and those owned by our officers, directors and other
affiliates, and voluntary restrictions agreed to by the selling stockholder
regarding volume limitations.

Second, we expect (although we cannot confirm) that our common stock will be
held by 100 or more investors, and we expect that at least 100 or more of these
investors will be independent of us and of one another.

Third, the shares of our common stock will be part of an offering of securities
to the public pursuant to an effective registration statement under the
Securities Act and the common stock is registered under the Exchange Act.

In addition, the Department of Labor regulations provide exceptions to the
look-through rule for equity interests in some types of entities, including any
entity which qualifies as either a "real estate operating company" or a
"venture capital operating company."

Under the Department of Labor regulations, a "real estate operating company" is
defined as an entity which on testing dates has at least 50% of its assets,
other than short-term investments pending long-term commitment or dividend to
investors, valued at cost:

o 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

o which, in the ordinary course of its business, is engaged directly in
real estate management or development activities.

According to those same regulations, a "venture capital operating company" is
defined as an entity which on testing dates has at least 50% of its assets,
other than short-term investments pending long-term commitment or dividend to
investors, valued at cost:

o invested in one or more operating companies with respect to which the
entity has management rights; and

o 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.

We have not endeavored to determine whether we will satisfy the "real estate
operating company" or "venture capital operating company" exception.

Prior to making an investment in the shares offered in this prospectus,
prospective employee benefit plan investors (whether or not subject to ERISA or
section 4975 of the Code) should consult with their legal and other advisors
concerning the impact of ERISA and the Code (and, particularly in the case of
non-ERISA plans and arrangements, any additional state, local and foreign law
considerations), as applicable, and the potential consequences in their
specific circumstances of an investment in such shares.

194

UNDERWRITING

Citigroup Global Markets Inc. and Deutsche Bank Securities Inc. are acting as
joint book-running managers and, together with , are acting as
representatives of the underwriters named below. Under the terms and subject to
the conditions contained in an underwriting agreement dated ,
2004, we have agreed to sell to the underwriters named below, for whom
Citigroup Global Markets Inc., Deutsche Bank Securities Inc.,
are acting as representatives, the following respective numbers of shares of
our common stock:

NUMBER OF
UNDERWRITER SHARES
- --------------------------------------- --------
Citigroup Global Markets Inc. .........
Deutsche Bank Securities Inc. .........
Total .................................
========

The underwriting agreement provides that the underwriters are obligated to
purchase all of the shares of our common stock in this Offering if any are
purchased, other than those shares covered by the over-allotment option
described below. The underwriting agreement also provides that, if an
underwriter defaults, the purchase commitments of non-defaulting underwriters
may be increased or this Offering may be terminated. The underwriting agreement
provides that the obligations of the underwriters to purchase the shares
included in this Offering are subject to the approval of legal matters by
counsel and to other conditions.

We have granted to the underwriters a 30-day option to purchase on a pro rata
basis up to additional shares at the initial public offering price less the
underwriting discounts and commissions. The option may be exercised only to
cover any over-allotments of our common stock.

The underwriters propose to offer the shares of our common stock initially at
the public offering price on the cover page of this prospectus and to selling
group members at that price less a selling concession of $ per share. The
underwriters and selling group members may allow a discount of $ per share
on sales to other broker/dealers. After the initial public offering, the
underwriters may change the public offering price and concession and discount
to broker/dealers.

The following table summarizes the compensation and estimated expenses we will
pay:

PER SHARE TOTAL
-------------------------- --------------------------
WITHOUT OVER- WITH OVER- WITHOUT OVER- WITH OVER-
ALLOTMENT ALLOTMENT ALLOTMENT ALLOTMENT
------------- ---------- ------------- ----------

Underwriting Discounts and Commissions
paid by us .......................... $ $ $ $
Expenses payable by us ............... $ $ $ $

We estimate that our out-of-pocket expenses for this Offering will be
approximately $ million. In addition, Citigroup Global Markets Inc. and
Deutsche Bank Securities Inc. will receive, in the aggregate, a financial
advisory fee of $ .

For a period of 14 months after the date of this prospectus, we have agreed
that we will not offer, sell, contract to sell, pledge or otherwise dispose of,
directly or indirectly, or file with the Securities and Exchange Commission a
registration statement (except a registration statement on Form S-8 relating to
the 2004 Incentive Plan or a registration statement on Form S-4 relating to our
acquisition of another entity) under the Securities Act relating to, any
additional shares of our common stock or securities convertible into or
exchangeable or exercisable for any shares of our common stock, or publicly
disclose the intention to make any offer, sale, pledge, disposition or filing,
without the prior written consent of Citigroup Global Markets Inc. and Deutsche
Bank Securities Inc. other than:

o grants of stock options, PIUs, RSUs or restricted stock to employees,
consultants or directors pursuant to the terms of a plan in effect as of
the date of this prospectus;

195

o issuances of our common stock pursuant to a dividend reinvestment plan
(if any); or

o issuances of our common stock or securities convertible into or
exchangeable or exercisable for shares of our common stock in connection
with other acquisitions of real property or real property companies.

Our officers and directors have agreed that they will not offer, sell, contract
to sell, pledge or otherwise dispose of, directly or indirectly, any shares of
our common stock or securities convertible into or exchangeable or exercisable
for any shares of our common stock, enter into a transaction that would have
the same effect, or enter into any swap, hedge or other arrangement that
transfers, in whole or in part, any of the economic consequences of ownership
of our common stock, whether any of these transactions are to be settled by
delivery of our common stock or other securities, in cash or otherwise, or
publicly disclose the intention to make any offer, sale, pledge or disposition,
or to enter into any transaction, swap, hedge or other arrangement, without, in
each case, the prior written consent of Citigroup Global Markets Inc. and
Deutsche Bank Securities Inc. for a period of 14 months after the date of this
prospectus. In addition, our officers and directors have agreed not to make any
demand, for or exercise any right with respect to, the registration of our
common stock or any securities convertible into or exercisable or exchangeable
for our common stock without the prior written consent of Citigroup Global
Markets Inc. and Deutsche Bank Securities Inc. Citigroup Global Markets Inc.
and Deutsche Bank Securities Inc. in their joint discretion may release any of
the securities subject to lock-up agreements at any time without notice. In the
event that either (x) during the last 17 days of the 14 month period referred
to above, we issue an earnings release or a press release announcing a
significant event or (y) prior to the expiration of such 14 month period, we
announce that we will release earnings or a press release announcing a
significant event results during the 17-day period beginning on the last day of
such 14 month period, the restrictions described above shall continue to apply
until the expiration of the 17-day period beginning on the date of the earnings
release.

We and our Operating Partnership have agreed to indemnify the underwriters
against liabilities under the Securities Act or contribute to payments that the
underwriters may be required to make in that respect.

We have applied for approval to list the shares of our common stock on the New
York Stock Exchange, subject to official notice of issuance, under the symbol
"ACC." In connection with the listing of our common stock on the New York Stock
Exchange, the underwriters will undertake to sell round lots of 100 shares or
more to a minimum of 2,000 beneficial owners.

Prior to this Offering, there has been no public market for our common stock.
Consequently, the initial public offering price for the shares will be
determined by negotiations between us and the representatives. Among the
factors to be considered in determining the initial public offering price are:

o our record of operations;

o our management;

o our estimated net income;

o our estimated funds from operations;

o our estimated cash available for distribution;

o our anticipated dividend yield;

o our growth prospects;

o the current market valuations, financial performance and dividend yields
of publicly traded companies considered by us and the underwriters to be
comparable to us; and

o the current state of the commercial real estate industry, the student
housing industry and the economy as a whole.

We cannot assure you, however, that the prices at which our shares will sell in
the public market after this Offering will not be lower than the initial public
offering price or that an active trading market in our common stock will
develop and continue after this Offering.

196

In connection with this Offering, the underwriters may engage in stabilizing
transactions, over-allotment transactions, syndicate covering transactions and
penalty bids in accordance with Regulation M under the Exchange Act.

o 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.

o Over-allotment 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 over-allotment
option. The underwriters may close out any covered short position by
either exercising their over-allotment option and/or purchasing shares in
the open market.

o 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 over-allotment option. If the underwriters sell more shares
than could be covered by the over-allotment 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.

The underwriters also may impose a penalty bid. Penalty bids permit the
underwriters to reclaim a selling concession from a syndicate member when the
representatives repurchase shares originally sold by that syndicate member in
order to cover syndicate short positions or make stabilizing purchases.

These stabilizing transactions, syndicate covering transactions and penalty
bids may have the effect of raising or maintaining the market price of our
common stock or preventing or retarding a decline in the market price of our
common stock. As a result, the price of our common stock may be higher than the
price that might otherwise exist in the open market. These transactions may be
effected on the New York Stock Exchange or otherwise and, if commenced, may be
discontinued at any time.

A prospectus in electronic format may be made available on the websites
maintained by one or more of the underwriters, or selling group members, if
any, participating in this Offering. The representatives may agree to allocate
a number of shares to underwriters and selling group members for sale to their
online brokerage account holders. Internet distributions will be allocated by
the underwriters and selling group members that will make Internet
distributions on the same basis as other allocations. The representatives may
agree to allocate a number of shares to underwriters for sale to their online
brokerage account holders.

Simultaneously with the closing of our offering, we intend to enter into a
$ million revolving credit facility. We are negotiating the terms of a
credit facility with affiliates of Citigroup Global Markets Inc. and Deutsche
Bank Securities Inc., two of our underwriters, to support the acquisition of
additional student housing properties and working capital needs. The facility
is expected to have a maximum term of 36 months. The facility is expected to
bear interest at a variable rate based upon one-month LIBOR (1.09% as of March
31, 2004). The credit facility is expected to include several covenants on our
part, including minimum tangible net worth and maximum leverage covenants. Our
revolving credit facility is also expected to contain covenants that restrict
our ability to pay dividends or other amounts to our stockholders unless
certain financial tests are satisfied. Citigroup and Deutche Bank will also
receive a total of $ million plus accrued interest in repayment in full of
our existing line of credit.

197

In addition to the underwriting discounts to be received by Deutsche Bank
Securities Inc., its affiliate, BT Holdings (NY), Inc., is a creditor of, and
holds a security interest in certain assets of, RSVP's parent company,
Frontline Capital Group. Frontline filed for protection from creditors pursuant
to Chapter 11 of the Bankruptcy Code in June 2001. BT Holdings (NY), Inc. would
therefore potentially receive benefits from this Offering to the extent
Frontline received and paid to its unsecured creditors any portion of the net
proceeds of this Offering or otherwise used such proceeds to repay any of its
senior or secured indebtedness. To the extent proceeds are used to repay senior
or secured indebtedness, proceeds from future asset sales by Frontline may be
available for distribution to BT Holdings (NY), Inc. and the other unsecured
creditors. Deutsche Bank Securities Inc. may therefore have an interest in the
successful completion of this Offering beyond the underwriting discounts that
it will receive.

LEGAL MATTERS

Certain legal matters, including the validity of the shares offered hereby,
will be passed upon for the Company by Willkie Farr & Gallagher LLP, New York,
New York. Sidley Austin Brown & Wood LLP, New York, New York will act as
counsel to the underwriters. As to certain matters of Maryland law, Willkie
Farr & Gallagher LLP and Sidley Austin Brown & Wood LLP may rely upon the
opinion of Shaw Pittman, L.L.P., Baltimore, Maryland.

EXPERTS

The combined financial statements of American Campus Communities, Inc.
Predecessor Entities at December 31, 2003 and 2002, and for each of the three
years in the period ended December 31, 2003, appearing in this Prospectus and
Registration Statement have been audited by Ernst & Young, LLP, independent
auditors, as set forth in their reports thereon appearing elsewhere herein, and
are included in reliance upon such report given upon the authority of such firm
as experts in accounting and auditing.

Factual information with respect to the student housing market has been
included herein and in the registration statement in reliance upon the report
of the Rosen Consulting Group and statistics used therein provided by
Peterson's, a part of the Thomson Corporation, and upon the authority of said
firms as experts in the national student housing market.

198

GLOSSARY

Unless the context otherwise requires, the following capitalized terms shall
have the meanings set forth below for purposes of this Prospectus:

"ACBM" means asbestos-containing building materials.

"American Campus - Titan Properties" means the properties owned by our American
Campus-Titan joint venture prior to the Formation Transactions.

"Cash Available for Distribution" means Funds from Operations plus amortization
of deferred financing costs and non-real estate related depreciation and minus
capital expenditures and principal payments on indebtedness.

"Company" means American Campus Communities, Inc., a Maryland corporation
formed on March 9, 2004.

"Control Share Acquisition" means, under Maryland law, the acquisition of
Control Shares, subject to certain exceptions.

"Control Shares" means, under Maryland law, voting shares which, if aggregated
with all other such shares previously acquired by the acquiror, or in respect
of which the acquiror is able to exercise or direct the exercise of voting
power (except solely by virtue of a revocable proxy), would entitle the
acquiror to exercise voting power in electing directors within one of the
following ranges of voting power: (a) one-fifth or more but less than
one-third, (b) one-third or more but less than a majority, or (c) a majority of
all voting power.

"Formation Transactions" means the transactions designed to consolidate the
ownership interests in the Properties in the Company, to facilitate this
Offering and to enable the Company to qualify as a REIT for federal income tax
purposes commencing with its taxable year ending December 31, 2004.

"Funds from Operations" or "FFO" means net income (loss) (computed in
accordance with GAAP), excluding gains (or losses) from debt restructuring and
sales of property, plus real estate related depreciation and amortization, and
after adjustments for unconsolidated partnerships and joint ventures.

"LAMS" means our lease administration and marketing software for the student
housing industry.

"NAREIT" means the National Association of Real Estate Investment Trusts.

"NCES" means the U.S. Department of Education's National Center for Educational
Statistics.

"Operating Partnership" means American Campus Communities Operating Partnership
LP, a limited partnership organized under the laws of the State of Maryland on
March 12, 2004.

"Ownership Limit" means 9.8% of the number or value of the Company's issued and
outstanding shares of common stock, $0.01 par value, of the Company.

"Predecessor Entities" or "Predecessor" means the general and limited
partnerships and the limited liability companies that owned the Properties
prior to the Formation Transactions.

"Profit Interests Units" or "PIUs" means Units in the Operating Partnership
with a profit interest granted by the Company in connection with this Offering
or in the 2004 Incentive Plan.

"PRPs" means potentially responsible parties.

"RAP" means Reckson Asset Partners, a joint venture between Reckson and RSVP.

"Reckson" means Reckson Associates Realty Corp., a Maryland corporation.

"REIT" means a real estate investment trust as defined under the Code.

"Restricted Stock Units" or "RSUs" are a security that entitles the holder to
receive restricted stock in the Company at a future date specified therein.

199

"Rosen" or "RCG" means Rosen Consulting Group, LLC.

"rsf" means rentable square foot.

"RSVP" means Reckson Strategic Venture Partners LLC, a Delaware limited
liability company.

"Services Company" means American Campus Communities Services Inc., a Delaware
corporation and wholly owned subsidiary of our Operating Partnership.

"Titan" means Titan Investments II, LLC, a third party developer of off-campus
properties.

"Units" means the limited partnership interests in the Operating Partnership.

200

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the Securities and Exchange Commission a registration
statement on Form S-11, including exhibits, schedules and amendments filed with
this registration statement, under the Securities Act with respect to the
shares of our common stock to be sold in this Offering. This prospectus does
not contain all of the information set forth in the registration statement and
exhibits and schedules to the registration statement. For further information
with respect to our Company and the shares of our common stock to be sold in
this Offering, reference is made to the registration statement, including the
exhibits to the registration statement. Statements contained in this prospectus
as to the contents of any contract or other document referred to in this
prospectus are not necessarily complete. Copies of the registration statement,
including the exhibits and schedules to the registration statement, may be
examined without charge at the public reference room of the Securities and
Exchange Commission, 450 Fifth Street, N.W., Room 1024, Washington, DC 20549.
Information about the operation of the public reference room may be obtained by
calling the Securities and Exchange Commission at 1-800-SEC-0300. Copies of all
or a portion of the registration statement can be obtained from the public
reference room of the Securities and Exchange Commission upon payment of
prescribed fees. Our Securities and Exchange Commission filings, including our
registration statement, are also available to you on the Securities and
Exchange Commission's Web site, www.sec.gov.

AS A RESULT OF THIS OFFERING, WE WILL BECOME SUBJECT TO THE INFORMATION AND
REPORTING REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, AND
WILL FILE ANNUAL, QUARTERLY AND OTHER PERIODIC REPORTS AND PROXY STATEMENTS AND
WILL MAKE AVAILABLE TO OUR STOCKHOLDERS QUARTERLY REPORTS FOR THE FIRST THREE
QUARTERS OF EACH FISCAL YEAR CONTAINING UNAUDITED INTERIM FINANCIAL
INFORMATION.

201

INDEX TO FINANCIAL STATEMENTS

AMERICAN CAMPUS COMMUNITIES, INC.

Unaudited Pro Forma Condensed Consolidated Financial Statements
Pro Forma Condensed Consolidated Balance Sheet as of March 31, 2004 (unaudited) ... F-3
Pro Forma Condensed Consolidated Statement of Operations for the three months ended
March 31, 2004 (unaudited) ...................................................... F-4
Pro Forma Condensed Consolidated Statement of Operations for the year ended
December 31, 2003 (unaudited) ................................................... F-5
Notes to Pro Forma Condensed Consolidated Financial Statements (unaudited) ........ F-6

AMERICAN CAMPUS COMMUNITIES PREDECESSOR

Combined Financial Statements
Report of Independent Registered Public Accounting Firm ........................... F-11
Combined Balance Sheets at December 31, 2003 and 2002 ............................. F-12
Combined Statements of Operations for the years ended December 31, 2003, 2002, and
2001 ............................................................................ F-13
Combined Statements of Changes in Owners' Equity for the years ended December 31,
2003, 2002, and 2001 ............................................................ F-14
Combined Statements of Cash Flows for the years ended December 31, 2003, 2002, and
2001 ............................................................................ F-15
Notes to Combined Financial Statements ............................................ F-16

F-1

AMERICAN CAMPUS COMMUNITIES INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The unaudited pro forma condensed consolidated financial statements as of March
31, 2004, and for the three months ended March 31, 2004 and for the year ended
December 31, 2003, are presented as if this Offering, the formation
transactions and the debt repayment transactions all had occurred on March 31,
2004 for the pro forma condensed consolidated balance sheet and on the first
day of the period presented for the pro forma condensed consolidated statements
of operations.

The pro forma adjustments include the repayment of certain debt, acquisition of
minority ownership of certain assets, and a provision for income tax related to
the establishment of a taxable REIT subsidiary.

The pro forma condensed consolidated financial statements should be read in
conjunction with the combined historical financial statements of American
Campus Communities Predecessor (the "Predecessor"), including the notes
thereto, included elsewhere in the Prospectus. The pro forma condensed
consolidated financial statements do not purport to represent the financial
position or the results of operations that would actually have occurred
assuming that the completion of this Offering, the formation transactions and
the debt repayment transactions all had occurred by March 31, 2004 or on the
first day of the periods presented, respectively; nor do they purport to
project the financial position or results of operations of American Campus
Communities Inc. as of any future date nor for any future period.

F-2

AMERICAN CAMPUS COMMUNITIES INC.
UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED BALANCE SHEET
MARCH 31, 2004
(In Thousands)

AMERICAN
AMERICAN CAMPUS
CAMPUS COMMUNI- DISTRIBUTION ACQUISITION SUBTOTAL OF
PREDECESSOR TIES, OF OF MINORITY PREOFFERING
HISTORICAL INC. PROPERTIES INTERESTS ADJUSTMENT
----------- -------- ------------ ----------- -----------

ASSETS: (A) (B) (C) (D)
Student housing
properties, net ........... $309,656 $-- $(13,592) $5,726 $(7,866)
Other assets, net .......... 37,327 -- (368) -- (368)
(750) (750)[H]
750 750 [H]

--------- --- -------- ------ -------
TOTAL ASSETS ............... $346,983 $-- $(13,960) $5,726 $(8,234)
========= === ======== ====== =======
LIABILITIES AND EQUITY:
Construction debt and
construction
accounts payable .......... $ 39,095 $-- $ -- $ --
Long-term financing ........ 248,594 -- (11,302) 5,726 (5,576)
Other liabilities .......... 30,760 -- (464) -- (464)

--------- --- -------- ------ -------
TOTAL LIABILITIES .......... 318,449 -- (11,766) 5,726 (6,040)
--------- --- -------- ------ -------
Minority interests ......... 223 -- -- (223) (223)
EQUITY:
Common Stock ...............
Additional paid in
capital ................... 28,311 -- (2,194) 223 (1,971)
--------- --- -------- ------ -------
TOTAL OWNERS' EQUITY ....... 28,311 -- $ (2,194) 223 (1,971)
--------- --- -------- ------ -------
TOTAL LIABILITIES AND
OWNERS' EQUITY ............ $346,983 $-- $(13,960) $5,726 $(8,234)
========= === ======== ====== =======

DISTRIBUTION
TO COMPANY
THIS REPAYMENT PREDECESSOR PRO
OFFERING OF DEBT OWNERS FORMA
-------- --------- ------------ -------

ASSETS: (E) (F) (G)
Student housing
properties, net ........... $ -- $ $301,790
Other assets, net .......... 219,678 (85,894)
(533)
(20)
(1,552) (98,252) 70,386
-------- -------- -------- --------
TOTAL ASSETS ............... $219,678 $(87,999) $(98,252) $372,176
======== ======== ======== ========
LIABILITIES AND EQUITY:
Construction debt and
construction
accounts payable .......... $ -- $(39,095) $ $ --
Long-term financing ........ -- (46,247) 196,771
Other liabilities .......... -- (552)
(20) 29,724
-------- -------- -------- --------
TOTAL LIABILITIES .......... -- (85,914) -- 226,495
-------- -------- -------- --------
Minority interests ......... 1,919 [I] -- 1,919
EQUITY:
Common Stock ............... 120 120
Additional paid in
capital ................... 219,558
(1,919)[I] (2,085) (98,252) 143,642
-------- -------- -------- --------
TOTAL OWNERS' EQUITY ....... 217,759 (2,085) (98,252) 143,762
-------- -------- -------- --------
TOTAL LIABILITIES AND
OWNERS' EQUITY ............ $219,678 $(87,999) $(98,252) $372,176
======== ======== ======== ========

See accompanying notes to unaudited pro forma condensed consolidated financial
statements.

F-3

AMERICAN CAMPUS COMMUNITIES INC.
UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31, 2004
(In Thousands, Except for Share and Per Share Information)

AMERICAN AMERICAN ACQUISITION
CAMPUS CAMPUS DISTRIBUTION OF
PREDECESSOR COMMUNITIES OF MINORITY
HISTORICAL INC. PROPERTIES INTERESTS
----------- ----------- ------------ -----------
(AA) (BB) [CC] [DD]

REVENUES:
Rental revenue .............. $14,102 $-- $(499) $ --
Third party development
and management
services ................... 2,070 -- 12 --
Other income ................ -- -- (5) --
------- --- ----- ------
TOTAL REVENUES .............. 16,172 -- (492) --
OPERATING EXPENSES:
Facility operating
expenses ................... 5,680 -- (299) --
Third party development
and management
services ................... 1,265 -- -- --
General and
administrative ............. 474 -- -- --
Depreciation ................ 2,346 -- (87) 48
Ground lease expense ........ 175 -- -- --
------- --- ----- -----
TOTAL OPERATING EXPENSES 9,940 -- (386) 48
------- --- ----- -----
OPERATING INCOME ............ 6,232 -- (106) (48)
NONOPERATING INCOME
AND (EXPENSES):
Interest income ............. 14 -- (1) --
Interest expense ............ (4,575) -- 213 (59)
Amortization - deferred
financing costs ............ (163) -- -- --
------- --- ----- -----
TOTAL NONOPERATING
EXPENSES, NET .............. (4,724) -- 212 (59)
Income (loss) before
taxes and minority
interests .................. 1,508 -- 106 (107)
Provision for income
taxes ...................... -- -- --
------- --- ----- -----
Income (loss) before
minority interests ......... 1,508 -- 106 (107)
Minority interest ........... 21 -- -- (21)
------- --- ----- -----
NET INCOME (LOSS) ........... $ 1,529 $-- $ 106 $(128)
======= === ===== =====
Pro forma basic earnings
per share
(unaudited)(1) .............
Pro forma diluted
earnings per share
(unaudited) (2) ............
Pro forma weighted
average common
shares outstanding -
basic (unaudited) ..........
Pro forma weighted
average common
shares outstanding -
diluted (unaudited) ........

THIS OFFERING
----------------------------------
SUBTOTAL OF REPAYMENT OTHER COMPANY
PREOFFERING THIS OF PRO FORMA PRO
ADJUSTMENTS OFFERING DEBT ADJUSTMENTS FORMA
----------- -------- --------- ----------- -------
[EE] [FF]

REVENUES:
Rental revenue .............. $(499) $ $ -- $ -- $13,603
Third party development
and management
services ................... 12 -- -- 2,082
Other income ................ (5) -- -- (5)
----- ---- ---- ----- -----------
TOTAL REVENUES .............. (492) -- -- 15,680
OPERATING EXPENSES:
Facility operating
expenses ................... (299) -- -- 5,381
Third party development
and management
services ................... -- -- -- 1,265
General and
administrative ............. -- -- 375[GG] 849
Depreciation ................ (39) (58) -- 2,249
Ground lease expense ........ -- -- 175
----- ---- ---- ----- -----------
TOTAL OPERATING EXPENSES (338) (58) 375 9,919
----- ---- ---- ----- -----------
OPERATING INCOME ............ (154) 58 (375) 5,761
NONOPERATING INCOME
AND (EXPENSES):
Interest income ............. (1) -- 13
Interest expense ............ 154 778 -- (3,643)
Amortization - deferred
financing costs ............ -- -- -- (163)
----- ---- ---- ----- -----------
TOTAL NONOPERATING
EXPENSES, NET .............. 153 778 -- (3,793)
Income (loss) before
taxes and minority
interests .................. (1) 836 (375) 1,968
Provision for income
taxes ...................... -- -- 8[HH] 8
----- ---- ---- ----- -----------
Income (loss) before
minority interests ......... (1) 836 (383) 1,960
Minority interest ........... (21) (25) -- -- 25
----- ---- ---- ----- -----------
NET INCOME (LOSS) ........... $ (22) $(25) $836 $(383) $ 1,935
===== ==== ==== ===== ===========
Pro forma basic earnings
per share
(unaudited)(1) ............. $ 0.16
Pro forma diluted
earnings per share
(unaudited) (2) ............ $ 0.16
Pro forma weighted
average common
shares outstanding -
basic (unaudited) .......... 12,025,700
Pro forma weighted
average common
shares outstanding -
diluted (unaudited) ........ 12,181,010

F-4

AMERICAN CAMPUS COMMUNITIES INC.
UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2003
(In Thousands, Except for Share and Per Share Information)

REVENUES:
Rental revenue .............. $ 50,765 $-- $(2,249) $ --
Third party development
and management
services ................... 9,128 -- 56 --
Other income ................ 28 -- (16) --
-------- --- ------- -----
TOTAL REVENUES .............. 59,921 -- (2,209) --
OPERATING EXPENSES:
Facility operating
expenses ................... 24,503 -- (1,226) --
Third party development
and management
services ................... 5,389 -- -- --
General and
administrative ............. 2,778 -- -- --
Depreciation ................ 9,214 -- (347) 192
Ground lease expense ........ 584 -- -- --
-------- --- ------- -----
TOTAL OPERATING EXPENSES 42,468 -- (1,573) 192
-------- --- ------- -----
OPERATING INCOME (LOSS)...... 17,453 -- (636) (192)
NONOPERATING INCOME AND
(EXPENSES):
Interest income ............. 84 -- (13) --
Interest expense ............ (17,911) -- 859 (236)
Amortization - deferred
financing costs ............ (586) -- 2 --
-------- --- ------- -----
TOTAL NONOPERATING
EXPENSES, NET .............. (18,413) -- 848 (236)
-------- --- ------- -----
Income (loss) before
taxes and minority
interests .................. (960) -- 212 (428)
Provision for income
taxes ...................... -- -- -- --
-------- --- ------- -----
Income (loss) before
minority interests ......... (960) -- 212 (428)
Minority interest ........... 16 -- -- (16)
-------- --- ------- -----
NET INCOME (LOSS) ........... $ (944) $-- $ 212 $(444)
======== === ======= =====
Pro forma basic earnings
per share
(unaudited)(1) .............
Pro forma diluted
earnings per share
(unaudited) (2) ............
Pro forma weighted
average common
shares outstanding -
basic (unaudited) ..........
Pro forma weighted
average common
shares outstanding -
diluted (unaudited) ........

THIS OFFERING
-----------------------------------
SUBTOTAL OF REPAYMENT OTHER COMPANY
PREOFFERING THIS OF PRO FORMA PRO
ADJUSTMENTS OFFERING DEBT ADJUSTMENTS FORMA
----------- -------- --------- ----------- -------
[EE] [FF]

REVENUES:
Rental revenue .............. $(2,249) $ $ -- $ -- $ 48,516
Third party development
and management
services ................... 56 -- -- 9,184
Other income ................ (16) -- -- 12
------- ---- ------ ------- -----------
TOTAL REVENUES .............. (2,209) -- -- 57,712
OPERATING EXPENSES:
Facility operating
expenses ................... (1,226) -- -- 23,277
Third party development
and management
services ................... -- -- -- 5,389
General and
administrative ............. -- -- 1,500[GG] 4,278
Depreciation ................ (155) (231) -- 8,828
Ground lease expense ........ -- -- 584
------- ---- ------ ------- -----------
TOTAL OPERATING EXPENSES (1,381) (231) 1,500 42,356
------- ---- ------ ------- -----------
OPERATING INCOME (LOSS)...... (828) 231 (1,500) 15,356
NONOPERATING INCOME AND
(EXPENSES):
Interest income ............. (13) -- -- 71
Interest expense ............ 623 3,117 -- (14,171)
Amortization - deferred
financing costs ............ 2 -- -- (584)
------- ---- ------ ------- -----------
TOTAL NONOPERATING
EXPENSES, NET .............. 612 3,117 -- (14,684)
------- ---- ------ ------- -----------
Income (loss) before
taxes and minority
interests .................. (216) 3,348 (1,500) 672
Provision for income
taxes ...................... -- -- 8[HH] 8
------- ---- ------ ------- -----------
Income (loss) before
minority interests ......... (216) 3,348 (1,508) 664
Minority interest ........... (16) (13) -- -- (13)
------- ---- ------ ------- -----------
NET INCOME (LOSS) ........... $ (232) $(13) $3,348 $(1,508) $ 651
======= ==== ====== ======= ===========
Pro forma basic earnings
per share
(unaudited)(1) ............. $ 0.05
Pro forma diluted
earnings per share
(unaudited) (2) ............ $ 0.05
Pro forma weighted
average common
shares outstanding -
basic (unaudited) .......... 12,025,700
Pro forma weighted
average common
shares outstanding -
diluted (unaudited) ........ 12,181,010

- ----------------
(1) Pro forma basic earnings per share is computed assuming this Offering was
consummated as of the first day of the period presented and equals pro
forma net income divided by the number of shares of our common stock to be
outstanding after this Offering.
(2) Pro forma diluted earnings per share is computed assuming this Offering was
consummated as of the first day of the period presented. Pro forma diluted
earnings per share equals pro forma net income divided by the sum of the
number of shares of our common stock to be outstanding and common
equivalent shares outstanding after this Offering.

See accompanying notes to unaudited pro forma condensed consolidated financial
statements.

F-5

AMERICAN CAMPUS COMMUNITIES, INC.
NOTES TO PRO FORMA

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)
(In Thousands except share and per share information)

1. ADJUSTMENTS TO THE PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

[A] Reflects the unaudited historical combined condensed balance sheet of
American Campus Communities Predecessor ("Predecessor") as of March 31, 2004.
Predecessor reflects the combination of RAP Student Housing Properties, LLC
(RAPSH) and subsidiaries, which includes majority ownership in nine student
housing properties under 68% ownership in American Campus - Titan, LLC
("Titan"), RFG Capital Management Partners, LP, ("RFG"), its majority ownership
interest in American Campus Communities, L.L.C. ("ACCL") and its various wholly
owned subsidiaries who serve as general partners to certain entities owned by
RAPSH. RSVP-ACT, LLC ("ACT") and a 68% ownership interest in American Campus -
Titan II, LLC and subsidiaries ("Titan II"). RAPSH, RFG and ACT are majority
owned through subsidiaries by Reckson Strategic Venture Partners, LLC ("RSVP").

[B] American Campus Communities, Inc. (the "Company") was formed on March 9,
2004 for the purpose of continuing and expanding the business activities of the
Predecessor. Prior to this offering, this entity had no assets, liabilities,
equity, or operations.

Pursuant to formation transactions among the Owners of the Predecessor, RAPSH
will be converted to a limited partnership, renamed American Campus Communities
Operating Partnership LP (the "Operating Partnership"). ACCL will be converted
to American Campus Communities Services, Inc. (the "Services Company") and will
serve as a taxable REIT subsidiary.

In connection with this Offering, RSVP will contribute its interests in RFG and
American Campus - Titan to RAP, and the Operating Partnership will receive a
contribution of interests in RFG and American Campus - Titan from RAP, and as a
result, all assets, liabilities and operations, including property management,
leasing and real estate development activities will be controlled by the
Operating Partnership. The exchange of the interests contributed by RAP and
RSVP will be accounted for as a reorganization of entities under common
control; accordingly the contributed assets and assumed liabilities will be
recorded at the Predecessor's historical cost basis.

The Company will use a portion of the proceeds to purchase the interests held
by RAP in the Operating Partnership and the remaining proceeds will be
contributed to the Operating Partnership in exchange for limited partnership
interests in the Operating Partnership.

We intend to be taxed as a REIT under Sections 856 through 860 of the Code,
commencing with our taxable year ending December 31, 2004. We believe that our
organization and proposed method of operation will enable us to meet the
requirements for qualification and taxation as a REIT for federal income tax
purposes. To maintain REIT status, we must meet a number of organization and
operations requirements, including a requirement that we annually distribute at
least 90% of our REIT taxable income to our stockholders. As a REIT, we
generally will not be subject to federal income tax on REIT taxable income we
currently distribute to our stockholders. If we fail to qualify as a REIT in
any taxable year, we will be subject to federal income tax at regular corporate
rates. Even if we qualify for taxation as a REIT, we may be subject to some
federal, state and local taxes on our income or property, and the income of our
taxable REIT subsidiary will be subject to taxation at normal corporate rates.

Upon completion of the transaction, we will conduct substantially all our
activities through our Operating Partnership and our taxable REIT subsidiary,
American Campus Communities Services, Inc. ("Services Company").

Upon consummation of this offering and the formation transactions, the Company,
as general partner, will own 99% of the Operating Partnership and will have
control over major decisions of the Operating Partnership, including decisions
related to the sale or refinancing of the properties.

F-6

AMERICAN CAMPUS COMMUNITIES, INC.
NOTES TO PRO FORMA
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

1. ADJUSTMENTS TO THE PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET -
(CONTINUED)

Accordingly, the Company will consolidate the assets and liabilities of the
Operating Partnership in accordance with AICPA Statement of Position 78-9,
Accounting for Investments in Real Estate Ventures (SOP 78-9).

[C] Pro Forma distribution of three properties to Predecessor owners as
reflected in the following table presented as of March 31, 2004:

VILLAGE AT SAN
VILLAGE AT BOULDER BERNARDINO
RIVERSIDE CREEK LAND TOTAL
---------- ---------- ---------- -----
ASSETS:
Student housing properties, net $12,974 $164 $454 $13,592
Other assets, net ............. 368 -- -- 368
------- ---- ---- -------
Total assets .................. $13,342 $164 $454 $13,960
======= ==== ==== =======
LIABILITIES AND EQUITY:
Long-term financing ........... $11,302 $ -- $ -- $11,302
Other liabilities ............. 464 -- -- 464
------- ---- ---- -------
Total liabilities ............. 11,766 -- -- 11,766
Total owners' equity .......... 1,576 164 454 2,194
------- ---- ---- -------
Total liabilities and owners'
equity ...................... $13,342 $164 $454 $13,960
======= ==== ==== =======

[D] The minority ownership interest in American Campus - Titan, LLC and
American Campus - Titan II, LLC will be acquired simultaneous with the
completion of the Offering, an adjustment has been made to eliminate the
minority interest included in the historic Predecessor financial
statements. The exchange of these minority ownership interests will be
accounted for as an acquisition of minority interests and, in accordance
with FASB Technical Bulletin 85-5, Issues Relating to Accounting for
Business Combinations, these acquisitions will be recorded at fair value
and will be financed through an advance on the senior revolving credit
facility.

[E] Offering is expected to include the issuance of 12,025,700 shares of
American Campus Communities, Inc. at $.01 par with an assumed offering
price of $20 per share.

Proceeds from this offering ................................................... $240,514
Less costs associated with this offering ($16,836 of underwriter's
discount and commissions and $4,000 of other costs).......................... (20,836)
--------
Net cash proceeds from offering ............................................... $219,678
========
Common stock 12,025,700 shares at $0.01 par.................................... $ 120
Additional paid in capital .................................................... 219,558
--------
Total increase in equity ...................................................... $219,678
========

F-7

AMERICAN CAMPUS COMMUNITIES, INC.
NOTES TO PRO FORMA
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

1. ADJUSTMENTS TO THE PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET -
(CONTINUED)

[F] Proceeds from the Offering will be used to repay certain obligations as set
forth in the following schedule presented as of March 31, 2004:

WRITE OFF OF
UNAMORTIZED
CONSTRUCTION TOTAL TO BE DEFERRED
ACCOUNTS ACCRUED PREPAYMENT PAID FROM FINANCING
PROPERTY PRINCIPAL PAYABLE INTEREST (1) PENALTY PROCEEDS COSTS (2)
- -------- --------- ------------ -------- ----------- ----------- ------------

University Village at Fresno (3) ........ $ 8,280 $1,302 $ 25 $ -- $ 9,607 $ 199
University Village at San
Bernardino ............................. 9,267 2,213 24 -- 11,504 322
University Village at TU --
Construction ........................... 6,261 5,394 -- -- 11,655 837
University Village at TU --
Mezzanine .............................. 6,550 -- 244 -- 6,794
The Village at Science Drive ............ 19,500 -- 81 -- 19,581 113
The Village on University ............... 26,575 -- 178 533 27,286 81
------- ------ ---- ---- ------- ------
Total ................................... $76,433 $8,909 $552 $533 $86,427 $1,552
======= ====== ==== ==== ======= ======

- ----------------

(1) Contractual prepayment penalty at March 31, 2004, will vary with rate in
place at time of prepayment.

(2) Balance of unamortized deferred finance costs will be written off upon
repayment of related debt.

(3) Excludes activity related to the fire reconstruction.

[G] Distribution of cash to RAP as described in Note 1.[B].

[H] Payment of $750 for financing costs to originate the senior revolving line
of credit.

[I] Reflects the grant of profit interest units equal to 1.3% of issued common
stock to certain members of management at closing of the offering.

2. ADJUSTMENTS TO THE PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(AA) Reflects the Predecessor historical condensed combined statements of
operations for the three months ended March 31, 2004 (unaudited) and
for the year ended December 31, 2003 as discussed in greater detail
Note 1.[A].

(BB) See Note 1.[B].

(CC) Reflects the reduction in historic revenues and expenses for the three
months ended March 31, 2004 and for the year ended December 31, 2003
related to The Village at Riverside distributed in conjunction with
this Offering. See Note 1.[C] for the minority interest in losses of
$16 for the year ended December 31, 2003. Additionally, as the
acquisition of the minority interests will be financed through our
revolving credit facility, an increase in pro forma interest expense
in the amount of $59 and $236 was made for the three months ended
March 31, 2004 and the year ended December 31, 2003, respectively.

F-8

AMERICAN CAMPUS COMMUNITIES, INC.
NOTES TO PRO FORMA
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

2. ADJUSTMENTS TO THE PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
- (CONTINUED)

(DD) Acquisition of minority ownership interest in Titan [See Note (D)]
resulting in the elimination of the minority interest earnings of $21
for the three months ending March 31, 2004 and an increase in interest
expense as the acquisition will be financed through the Company's
revolving credit facility, and an increase in depreciation expense
resulting from increase in basis of related properties.

(EE) In connection with the Offering, certain members of senior management
will be granted a special class of partnership interest in the
Operating Partnership referred to as Profit Interest Units (PIU). The
fair market value of the PIUs will be charged to expense at the date
of grant. The estimated fair market value of $3,106 has not been
reflected in the unaudited pro forma consolidated statement of
operations because it is non-recurring and indirectly related to the
Offering. An adjustment has been made to reflect the 1.3% minority
interest in earnings for the three months ending March 31, 2004 and
the year ending December 31, 2004.

(FF) As described at Note [F], certain debt was repaid with proceeds from
the Offering. For the purpose of the pro forma statement of operations
for the three months ended March 31, 2004, and for the year ending
December 31, 2003, these loans were assumed to be repaid on the first
day of the period, and the following pro forma reductions in expense
were made:

THREE MONTHS ENDED YEAR ENDED
MARCH 31, 2004 DECEMBER 31, 2003
--------------------------- ---------------------------
DEFERRED DEFERRED
INTEREST FINANCIAL COST INTEREST FINANCIAL COST
EXPENSE AMORTIZATION EXPENSE AMORTIZATION
-------- -------------- -------- --------------

University Village at Fresno (1) $ -- $ -- $ -- $ --
University Village at San
Bernardino (1) ..................... -- -- -- --
University Village at TU(1) .......... -- -- -- --
The Village at Science Drive ......... 245 45 968 181
The Village On University ............ 533 13 2,149 50
---- ---- ------ ----
$778 $ 58 $3,117 $231
==== ==== ====== ====

- ----------------
(1) Interest expense and amortization of deferred finance cost is capitalized
during the period of construction.

(GG) Certain pro forma adjustments have been made to reflect the increased
costs associated with operating as a public company as reflected in the
following table:

THREE MONTHS ENDED YEAR ENDED
MARCH 31, 2004 DECEMBER 31, 2003
------------------ -----------------

Compensation and staffing ......... $ 53 $ 212
Directors and officers liability
insurance premiums .............. 134 535
Independent Board of Directors 102 407
Legal expense ..................... 86 346
---- ------
Total ............................. $375 $1,500
==== ======

(HH) The Services Company has elected, together with us, to be treated as
our taxable REIT subsidiary. A taxable REIT subsidiary is a
corporation other than a REIT in which we directly or indirectly hold
stock, and that has made a joint election with us to be treated as a

F-9

AMERICAN CAMPUS COMMUNITIES, INC.
NOTES TO PRO FORMA
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

2. ADJUSTMENTS TO THE PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
- (CONTINUED)

taxable REIT subsidiary. A taxable REIT subsidiary also includes any
corporation other than a REIT with respect to which a taxable REIT
subsidiary in which we own an interest owns securities possessing more
than 35% of the total voting power or value of the outstanding
securities of such corporation. Other than some activities relating to
lodging and health care facilities, a taxable REIT subsidiary may
generally engage in any business, including the provision of customary
or non-customary services to tenants of its parent REIT. A taxable
REIT subsidiary is subject to regular federal income tax, and state
and local income tax where applicable, as a regular C corporation. In
addition, a taxable REIT subsidiary may be prevented from deducting
interest on debt funded directly or indirectly by our company if
certain tests regarding the taxable REIT subsidiary's debt to equity
ratio and interest expense are not satisfied. An adjustment has been
made for the estimated tax provision related to the Services Company
for the periods presented.

F-10

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Owners
American Campus Communities Predecessor

We have audited the accompanying combined balance sheets of American Campus
Communities Predecessor (the "Predecessor"), as defined in Note 1, as of
December 31, 2003 and 2002, and the related combined statements of operations,
changes in owners' equity and cash flows for each of the three years in the
period ended December 31, 2003. These combined financial statements are the
responsibility of the Predecessor's management. Our responsibility is to
express an opinion on these combined financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the combined financial position of American
Campus Communities Predecessor at December 31, 2003 and 2002, and the combined
results of their operations and their cash flows for each of the three years in
the period ended December 31, 2003, in conformity with accounting principles
generally accepted in the United States.

Austin, Texas
March 26, 2004

/s/ Ernst & Young LLP

F-11

AMERICAN CAMPUS COMMUNITIES PREDECESSOR

COMBINED BALANCE SHEETS

MARCH 31 DECEMBER 31,
----------- ---------------------------
2004 2003 2002
----------- ---------- ----------
(UNAUDITED)

ASSETS
Current assets:
Cash and cash equivalents ................................... $ 4,254,718 $ 5,227,191 $ 10,566,116
Restricted cash and short-term investments .................. 8,383,042 9,503,243 7,466,795
Student contracts receivable, net ........................... 4,756,067 2,354,519 1,976,318
Student housing facility subject to lease-held for sale ..... 8,043,686 7,975,713 --
Other current assets ........................................ 5,178,067 7,471,103 3,455,758
------------ ------------ ------------
Total current assets ......................................... 30,615,580 32,531,769 23,464,987
Student housing facilities subject to leases, net ............ 68,915,125 69,713,352 69,196,328
Student housing properties, net .............................. 240,741,109 222,906,568 210,231,594
Furniture, fixtures and equipment, net ....................... 996,019 1,009,321 972,551
Deferred financing and offering costs, net ................... 5,715,037 4,405,449 3,792,903
------------ ------------ ------------
Total assets ................................................. $346,982,870 $330,566,459 $307,658,363
LIABILITIES AND OWNERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses ....................... $ 9,020,616 $ 6,268,373 $ 6,537,658
Accrued interest payable .................................... 1,018,483 2,179,711 1,933,730
Security deposits ........................................... 2,356,857 1,885,760 1,857,982
Deferred rental income ...................................... 5,596,190 6,590,771 5,625,091
Deferred development and construction revenue ............... 482,505 727,640 2,106,442
Note payable secured by leasehold held for sale ............. 8,332,921 8,079,705 --
Short-term loans and current portion of long-term debt ...... 3,378,807 3,323,687 3,817,065
Amounts payable to related parties .......................... 22,117 21,257 --
------------ ------------ ------------
Total current liabilities .................................... 30,208,496 29,076,904 21,877,968
Noncurrent liabilities:
Long-term debt, net of current portion ...................... 275,646,655 264,193,582 245,888,689
Construction accounts payable ............................... 8,737,091 5,277,614 1,334,654
Deferred development and construction revenue -
student housing facilities subject to leases .............. 2,946,031 2,956,739 2,316,267
Other noncurrent liabilities ................................ 910,964 1,151,449 430,350
------------ ------------ ------------
Total noncurrent liabilities ................................. 288,240,741 273,579,384 249,969,960
------------ ------------ ------------
Total liabilities ............................................ 318,449,237 302,656,288 271,847,928
Minority interests ........................................... 223,065 252,317 284,369
Owners' equity:
Accumulated other comprehensive income (loss) ............... (562,392) (197,595) (46,311)
Owners' equity .............................................. 28,872,960 27,855,449 35,572,377
------------ ------------ ------------
Total Owners' equity ......................................... 28,310,568 27,657,854 35,526,066
------------ ------------ ------------
Total liabilities and owners' equity ......................... $346,982,870 $330,566,459 $307,658,363
============ ============ ============

See accompanying notes.

F-12

AMERICAN CAMPUS COMMUNITIES PREDECESSOR

COMBINED STATEMENTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, YEARS ENDED DECEMBER 31,
----------------------------- -------------------------------------------------
2004 2003 2003 2002 2001
------------- ------------- ------------- -------------- --------------
(UNAUDITED) (UNAUDITED)

Revenues:
Student housing rental and
ancillary revenue ................ $ 8,494,018 $ 8,889,227 $ 33,763,147 $ 32,314,493 $ 26,235,258
Student housing facilities
subject to leases-rental and
ancillary revenue ................ 5,608,105 4,896,680 17,002,249 16,669,992 13,671,959
Third party development
services ......................... 1,670,917 1,478,180 7,830,340 3,998,046 1,971,867
Third party development
services - student housing
facilities subject to leases ..... 26,815 27,105 108,456 1,076,374 906,542
Third party facility
management services -
affiliates ....................... 73,981 95,391 335,333 507,003 708,207
Third party management
services ......................... 298,389 233,672 853,961 437,664 323,328
Other income ....................... -- 26,587 27,987 353,818 87,277
----------- ----------- ------------ ------------ -------------
Total revenues ...................... 16,172,225 15,646,842 59,921,473 55,357,390 43,904,438
Operating expenses:
Student housing .................... 3,745,618 3,961,139 16,471,830 15,970,522 12,257,881
Student housing facilities
subject to leases ................ 1,934,425 1,716,619 8,031,112 8,250,103 6,469,170
Development and
management services .............. 1,264,567 1,252,349 5,388,823 4,440,889 3,373,093
General and administrative ......... 474,060 404,516 2,778,170 2,000,797 1,658,648
Depreciation ....................... 2,346,055 2,316,007 9,213,996 8,411,431 6,950,826
Ground lease ....................... 174,834 129,289 584,153 664,228 631,710
----------- ----------- ------------ ------------ ------------
Total operating expenses ............ 9,939,559 9,779,919 42,468,084 39,737,970 31,341,328
----------- ----------- ------------ ------------ ------------
Operating income .................... 6,232,666 5,866,923 17,453,389 15,619,420 12,563,110
Nonoperating income and
(expenses):
Interest income .................... 13,458 25,134 84,215 167,334 350,392
Interest expense ................... (4,574,539) (4,396,850) (17,911,127) (17,392,223) (15,556,501)
Amortization of deferred
financing costs .................. (163,326) (135,968) (586,515) (564,167) (405,927)
----------- ----------- ------------ ------------ ------------
Total nonoperating expenses ......... (4,724,407) (4,507,684) (18,413,427) (17,789,056) 15,612,036
----------- ----------- ------------ ------------ ------------
Income (loss) before a minority
interest ........................... 1,508,259 1,359,239 (960,038) (2,169,636) (3,048,926)
Minority interest ................... 21,252 (11,832) 15,550 30,189 109,711
----------- ----------- ------------ ------------ ------------
Net income (loss) ................... $ 1,529,511 $ 1,347,407 $ (944,488) $ (2,139,447) $ (2,939,215)
=========== =========== ============ ============ ============

See accompanying notes.

F-13

AMERICAN CAMPUS COMMUNITIES PREDECESSOR
COMBINED STATEMENTS OF CHANGES IN OWNERS' EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 2004 (UNAUDITED)
AND THE YEARS ENDED DECEMBER 31, 2003, 2002, AND 2001

ACCUMULATED
OTHER
COMPREHENSIVE
OWNERS' EQUITY INCOME (LOSS) TOTAL
---------------- --------------- ----------------

Owners' Equity, December 31, 2000 ................. $ 25,606,771 $ -- $ 25,606,771
Contributions .................................... 29,788,016 -- 29,788,016
Distributions .................................... (11,913,292) -- (11,913,292)
Comprehensive loss:
Change in fair value of interest rate swap ..... -- (28,805) (28,805)
Change in fair value of interest rate cap ...... -- 58,086 58,086
Net loss ....................................... (2,939,215) -- (2,939,215)
------------
Total comprehensive loss ......................... (2,909,934)
------------ --------- ------------
Owners' Equity, December 31, 2001 ................. 40,542,280 29,281 40,571,561
Contributions .................................... 5,363,354 -- 5,363,354
Distributions .................................... (8,193,810) -- (8,193,810)
Comprehensive loss:
Expiration of interest rate swap ............... -- 28,805 28,805
Change in fair value of interest rate cap ...... -- (104,397) (104,397)
Net loss ....................................... (2,139,447) -- (2,139,447)
------------
Total comprehensive loss ......................... (2,215,039)
------------ --------- ------------
Owners' Equity, December 31, 2002 ................. 35,572,377 (46,311) 35,526,066
Contributions .................................... 3,538,134 -- 3,538,134
Distributions .................................... (10,310,574) -- (10,310,574)
Comprehensive loss:
Change in fair value of interest rate swap ..... -- (152,956) (152,956)
Change in fair value of interest rate cap ...... -- 1,672 1,672
Net loss ....................................... (944,488) -- (944,488)
------------
Total comprehensive loss .......................... (1,095,772)
------------ --------- ------------
Owners' Equity, December 31, 2003 ................. 27,855,449 (197,595) 27,657,854
Contributions ..................................... 370,000 -- 370,000
Distributions ..................................... (882,000) -- (882,000)
Comprehensive loss:
Change in fair value of interest rate swap ........ -- (370,980) (370,980)
Change in fair value of interest rate cap ......... -- 6,183 6,183
Net income ........................................ 1,529,511 -- 1,529,511
------------
Total comprehensive income ........................ 1,164,714
------------ --------- ------------
Owners' Equity at March 31, 2004 (Unaudited) ...... $ 28,872,960 $(562,392) $(28,310,568)
============ ========= ============

See accompanying notes.

F-14

AMERICAN CAMPUS COMMUNITIES PREDECESSOR

COMBINED STATEMENTS OF CASH FLOWS

THREE MONTHS ENDED MARCH 31,
-----------------------------
2004 2003
---------- -----------
(UNAUDITED) (UNAUDITED)

OPERATING ACTIVITIES
Net income (loss) ................................................ $ 1,529,511 $ 1,347,407
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation .................................................... 2,346,055 2,316,008
Amortization of deferred financing costs ........................ 163,326 135,968
Changes in operating assets and liabilities:
Restricted cash ................................................ 1,120,201 3,184,232
Student contracts receivable, net .............................. (2,401,548) 461,935
Other current assets ........................................... 2,293,036 1,991
Accounts payable and accrued expenses .......................... 2,387,445 (1,951,038)
Accrued interest payable ....................................... (1,161,228) (897,770)
Security deposits .............................................. 471,097 234,511
Deferred rental income ......................................... (994,581) (1,391,739)
Deferred income - cancellation fee from affiliate .............. -- --
Deferred development and construction revenue .................. (245,135) (113,072)
Amounts payable to related parties ............................. 860 --
Deferred development and construction revenue -
student housing facilities subject to leases .................. (10,708) 145,111
------------ -----------
Net cash provided by operating activities ....................... 5,498,331 3,473,544
------------ -----------
INVESTING ACTIVITIES
Investments in student housing facilities subject to leases ..... (55,710) (74,802)
Student housing facilities subject to lease held for sale ....... (67,973) --
Investments in student housing properties ....................... (19,033,903) (4,272,221)
Purchase of furniture, fixtures and equipment ................... (55,463) (53,558)
------------ -----------
Net cash used in investing activities ........................... (19,213,049) (4,400,581)
------------ -----------
FINANCING ACTIVITIES
Repayment of short-term loans ................................... -- (421,657)
Proceeds from short-term loans .................................. -- --
Repayment of long-term debt ..................................... (428,256) (410,223)
Repayment of notes payable - related parties .................... -- --
Proceeds from long-term debt .................................... 12,189,665 3,563,847
Proceeds from notes payable - related parties ................... -- --
Purchase of interest rate cap ................................... -- --
Change in construction accounts payable ......................... 3,459,477 988,927
Change in other noncurrent liabilities .......................... (240,485) 12,584
Debt issuance and offering costs ................................ (1,696,904) (2,405)
Contributions ................................................... 370,000 100,000
Distributions ................................................... (882,000) (325,000)
Minority interests .............................................. (29,252) 6,831
------------ -----------
Net cash provided by financing activities ....................... 12,742,245 3,512,904
------------ -----------
Net (decrease) increase in cash and cash equivalents ............. (972,473) 2,585,867
Cash and cash equivalents at beginning of period ................. 5,227,191 6,909,792
------------ -----------
Cash and cash equivalents at end of period ....................... $ 4,254,718 $ 9,495,659
============ ===========
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING
ACTIVITIES
Liabilities assumed in acquisition of student housing
properties ..................................................... $ -- $ --
============ ===========
Reduction of investment in student housing due to fire .......... $ -- $ --
============ ===========
Financing of equipment through capital lease obligations ........ $ -- $ 47,600
============ ===========
Change in fair value of derivative instruments, net ............. $ (364,798) $ (4,558)
============ ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest paid ................................................... $ 5,735,767 $ 5,432,810
============ ===========

YEARS ENDED DECEMBER 31,
--------------------------------------------------
2003 2002 2001
---------------- ---------------- ----------------

OPERATING ACTIVITIES
Net income (loss) ................................................ $ (944,488) $ (2,139,447) $ (2,939,215)
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation .................................................... 9,213,996 8,411,431 6,950,826
Amortization of deferred financing costs ........................ 586,515 564,167 405,927
Changes in operating assets and liabilities:
Restricted cash ................................................ (2,036,448) (139,969) (3,205,475)
Student contracts receivable, net .............................. (378,201) 354,888 (154,100)
Other current assets ........................................... (265,345) (1,269,240) (271,482)
Accounts payable and accrued expenses .......................... (420,569) 1,334,713 2,255,979
Accrued interest payable ....................................... 245,981 154,880 372,416
Security deposits .............................................. 27,778 (112,600) 152,095
Deferred rental income ......................................... 965,680 (239,042) 1,189,964
Deferred income - cancellation fee from affiliate .............. -- (150,832) (258,576)
Deferred development and construction revenue .................. (1,378,802) 1,311,512 711,519
Amounts payable to related parties ............................. 1,257 (25,900) (320,219)
Deferred development and construction revenue -
student housing facilities subject to leases .................. 640,472 (96,056) 448,639
------------ ------------ ------------
Net cash provided by operating activities ....................... 6,257,826 7,958,505 5,338,298
------------ ------------ ------------
INVESTING ACTIVITIES
Investments in student housing facilities subject to leases ..... (3,787,575) (395,766) (14,535,056)
Student housing facilities subject to lease held for sale ....... (7,975,713) -- --
Investments in student housing properties ....................... (21,776,822) (20,901,208) (53,951,917)
Purchase of furniture, fixtures and equipment ................... (197,277) (381,074) (53,127)
------------ ------------ ------------
Net cash used in investing activities ........................... (33,737,387) (21,678,048) (68,540,100)
------------ ------------ ------------
FINANCING ACTIVITIES
Repayment of short-term loans ................................... (2,358,191) (577,686) --
Proceeds from short-term loans .................................. 1,641,594 1,367,843 --
Repayment of long-term debt ..................................... (2,997,211) (33,501,935) (21,823,155)
Repayment of notes payable - related parties .................... (1,000,000) (1,096,493) (164,675)
Proceeds from long-term debt .................................... 29,605,027 47,968,591 77,994,778
Proceeds from notes payable - related parties ................... 1,020,000 606,818 --
Purchase of interest rate cap ................................... -- -- (52,000)
Change in construction accounts payable ......................... 3,942,960 2,809 303,719
Change in other noncurrent liabilities .......................... 604,297 (311,569) 301,064
Debt issuance and offering costs ................................ (1,513,348) (446,919) (1,710,721)
Contributions ................................................... 3,538,134 5,363,356 29,788,016
Distributions ................................................... (10,310,574) (8,193,810) (11,913,292)
Minority interests .............................................. (32,052) 153,672 108,032
------------ ------------ ------------
Net cash provided by financing activities ....................... 22,140,636 11,334,677 72,831,766
------------ ------------ ------------
Net (decrease) increase in cash and cash equivalents ............. (5,338,925) (2,384,866) 9,629,964
Cash and cash equivalents at beginning of period ................. 10,566,116 12,950,982 3,321,018
------------ ------------ ------------
Cash and cash equivalents at end of period ....................... $ 5,227,191 $ 10,566,116 $ 12,950,982
============ ============ ============
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING
ACTIVITIES
Liabilities assumed in acquisition of student housing
properties ..................................................... $ -- $ -- $ 2,092,653
============ ============ ============
Reduction of investment in student housing due to fire .......... $ (3,750,000) $ -- $ --
============ ============ ============
Financing of equipment through capital lease obligations ........ $ 116,802 $ 277,659 $ 169,001
============ ============ ============
Change in fair value of derivative instruments, net ............. $ (151,284) $ (75,592) $ 29,281
============ ============ ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest paid ................................................... $ 17,665,146 $ 17,237,343 $ 15,186,974
============ ============ ============

See accompanying notes.

F-15

AMERICAN CAMPUS COMMUNITIES PREDECESSOR
NOTES TO COMBINED FINANCIAL STATEMENTS

DECEMBER 31, 2003

1. OWNERSHIP AND OPERATION OF THE PREDECESSOR

American Campus Communities Predecessor (the "Predecessor") is engaged in the
business of owning, managing, leasing, acquiring and developing student housing
and providing development and management services to third parties on a
national basis. Predecessor is not a legal entity, but rather a combination of
certain real estate entities and operations based on their common ownership and
voting control.

The Predecessor reflects the combination of the following entities. Reckson
Strategic Venture Partners, LLC controls, through subsidiaries, at least 50% of
the voting control of each of these entities:

o RAP Student Housing Properties, LLC ("RAPSH") and its majority owned
subsidiaries, including American Campus-Titan, LLC, and certain limited
liability companies and limited partnerships ("Affiliated Student Housing
Properties"),

o RSVP-ACT, LLC ("ACT") and its majority owned subsidiary, American
Campus-Titan II, LLC, and

o RFG Capital Management Partners, LP and its wholly owned subsidiaries,
which represent a 1% general partner or member interest in the Affiliated
Student Housing Properties, and its majority interest in American Campus
Communities, L.L.C. ("ACC") and its wholly owned subsidiaries.

Concurrent with the consummation of an initial public offering (the "Offering")
of the common stock of American Campus Communities, Inc. (the "REIT"), which is
expected to be completed in 2004, the REIT and a newly formed majority-owned
limited partnership, American Campus Communities Operating Partnership LP (the
"Operating Partnership") and its taxable REIT subsidiary, American Campus
Communities Services, Inc., together with the partners and members of the
affiliated partnerships and limited liability companies (as described more
fully below) of the Predecessor (collectively, the "Participants"), will engage
in certain formation transactions (the "Formation Transactions"). The Formation
Transactions are designed to (i) continue the operations of the Predecessor,
(ii) enable the REIT to raise the necessary capital to repay mortgage and
construction debt, complete development projects currently in progress, and
pursue additional development and acquisition opportunities, (iii) fund costs,
capital expenditures and working capital, (iv) provide a vehicle for future
acquisitions, (v) enable the REIT to comply with requirements under the federal
income tax laws and regulations relating to real estate investment trusts and
(vi) preserve tax advantages for certain Participants.

The operations of the REIT will be carried on primarily through the Operating
Partnership. It is the intent of the REIT to elect the status of and qualify as
a REIT under Section 856 through 860 of the Internal Revenue Code of 1986, as
amended. The REIT will be the sole general partner of and will have control
over the activities of the Operating Partnership. The Operating Partnership
will receive a contribution of interests in the real estate properties, as well
as the property management, leasing, and real estate development operations of
American Campus Communities, L.L.C., in exchange for units of limited
partnership interest in the Operating Partnership and/or cash. The REIT will be
fully integrated, self-administered and self-managed.

Certain key executives of ACC have, through a separate entity, a promoted
ownership interest in RAP and ACC. This promoted interest will cease upon
consummation of the offering.

The Predecessor consists of limited liability companies and limited
partnerships, each with a single class of ownership interest. Under the terms
of the various limited liability company and limited partnership agreements,
the members' or partners' liability is limited to their contributed capital.

F-16

AMERICAN CAMPUS COMMUNITIES PREDECESSOR
NOTES TO COMBINED FINANCIAL STATEMENTS - (CONTINUED)

1. OWNERSHIP AND OPERATION OF THE PREDECESSOR - (CONTINUED)

AMERICAN CAMPUS COMMUNITIES, L.L.C.

American Campus Communities, L.L.C., ("ACC") a Delaware limited liability
company, was formed on October 8, 1993. ACC is the nation's premier provider to
colleges, universities, and investors of assistance in acquiring, developing,
constructing, refurbishing, financing, and managing on-campus and off-campus
student housing. ACC is owned by RFG Capital Management Partners, L.P. and RSVP
Student Housing, L.L.C., (RSH) an affiliated entity.

AMERICAN CAMPUS -- TITAN, LLC AND AMERICAN CAMPUS -- TITAN II, LLC

American Campus -- Titan, LLC (AC-T), a limited liability company, was formed
on April 1, 2000 as a joint venture of SHP-ACT, LLC (SHP-ACT) (a subsidiary of
RAP), and Titan Investments II (TI II). American Campus - Titan II, LLC (AC-T
II), a limited liability company, was formed on October 1, 2003 by RSVP-ACT,
LLC (RSVP-ACT) (a subsidiary of RSH), and TI II. AC-T and AC-T II were formed
for the purpose of developing student housing properties in close proximity to
college and university campuses throughout the United States. SHP-ACT is
managing member of AC-T and RSVP-ACT is managing member of AC-T II.

Under the terms of the limited liability agreements, initial capital
contributions were provided 5% by TII and 95% by SHP-ACT (RSVP-ACT for American
Campus-Titan II). Net income and losses are allocated and cash is distributed
in accordance with the limited liability agreements.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

INTERIM FINANCIAL INFORMATION

The financial information as of March 31, 2004 and for the three months ended
March 31, 2004 and 2003 is unaudited, but includes all adjustments, consisting
only of normal recurring adjustments, that in the opinion of management are
necessary for a fair presentation of the Company's financial position, results
of operations, and cash flows for such periods. Operating results for the three
months ended March 31, 2004 are not necessarily indicative of results that may
be expected for any other interim period or for the full fiscal year of 2004 or
any future period.

BASIS OF PRESENTATION AND ACCOUNTING.

The accompanying combined financial statements have been prepared on the
accrual basis of accounting in conformity with accounting principles generally
accepted in the United States ("GAAP"). Revenues are recognized when earned and
expenses and costs are recognized when incurred. All significant intercompany
transactions have been eliminated.

RECENT ACCOUNTING PRONOUNCEMENTS

Financial Accounting Standards Board ("FASB") Interpretation No. 46,
"Consolidation of Variable Interest Entities, an Interpretation of ARB 51"

In January 2003, the FASB issued Interpretation No. 46, "Consolidation of
Variable Interest Entities, an interpretation of ARB 51" ("FIN 46"). The
primary objectives of FIN 46 are to provide guidance on the identification of
entities for which control is achieved through means other than through voting
rights ("VIEs") and how to determine when and which business enterprise should
consolidate the VIE. This new criteria for consolidation applies to an entity
in which either (1) the equity investors (if any) do not have a controlling
financial interest or (2) the equity investment at risk is insufficient to
finance that entity's activities without receiving additional subordinated
financial support from other parties.

F-17

AMERICAN CAMPUS COMMUNITIES PREDECESSOR
NOTES TO COMBINED FINANCIAL STATEMENTS - (CONTINUED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED)

If an entity qualifies as a VIE, then the party absorbing more than 50% of the
expected losses, as defined, or receiving more than 50% of the expected
residual returns, as defined, is required to consolidate the VIE. The
Predecessor has implemented FIN 46 and determined that there was no impact on
the financial statements.

BALANCE SHEET CLASSIFICATION

Assets to be realized and obligations to be paid in the twelve months following
the respective balance sheet date are classified as current.

USE OF ESTIMATES

The preparation of financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosures of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ from
those estimates.

CASH AND CASH EQUIVALENTS

For purposes of financial statement presentation, the Predecessor considers all
highly liquid investments with a maturity of three months or less when
purchased to be cash equivalents. Restricted cash and investments are excluded
from cash for the purpose of preparing the combined statements of cash flows.

The Predecessor maintains cash balances in various banks. At times the amounts
of cash may exceed the $100,000 amount FDIC insures. As the Predecessor only
uses money centered financial institutions, the Predecessor does not believe it
is exposed to any significant credit risk on cash and cash equivalents.

RESTRICTED CASH AND SHORT-TERM INVESTMENTS

Restricted cash and short-term investments consists of funds held in trust and
invested in low risk investments, generally consisting of government backed
securities, as permitted by the indentures of trusts, which were established in
connection with three bond issues. Additionally, restricted cash and short-term
investments include escrow accounts held by lenders and resident security
deposits, as required by law in certain states. Certain funds held by a trustee
in a required escrow account are being invested under a forward delivery
agreement in government backed securities that have a remaining maturity when
purchased of six months. Realized and unrealized gains and losses are not
material for the periods presented.

INTERNAL-USE SOFTWARE

The Predecessor capitalizes direct costs incurred during the application,
development stage and the implementation stage for developing, purchasing or
otherwise acquiring software for internal use. These costs are included in
furniture, fixtures and equipment and are amortized over the estimated useful
lives of the software, generally three to five years. All costs incurred during
the preliminary project stage, including project scoping, identification and
testing of alternatives, are expensed as incurred.

FIXED ASSETS AND DEPRECIATION

Land, buildings and improvements, student housing facilities subject to leases,
and furniture, fixtures and equipment, are recorded at historical cost.
Buildings and improvements are depreciated over 40 years. Student housing
facilities subject to leases are depreciated over useful lives ranging from 23
to

F-18

AMERICAN CAMPUS COMMUNITIES PREDECESSOR
NOTES TO COMBINED FINANCIAL STATEMENTS - (CONTINUED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED)

29 years. Furniture, fixtures, equipment, and software for internal use are
depreciated over estimated useful lives ranging from 3 to 7 years.

Depreciation is computed using the straight-line method for financial reporting
purposes. Accumulated depreciation on furniture, fixtures and equipment, and
software for internal use at December 31, 2003 and 2002 approximated $851,000,
and $573,000, respectively.

STUDENT HOUSING CONSTRUCTION AND DEVELOPMENT IN PROGRESS

Costs, including construction period interest and amortization of deferred
financing costs, associated with projects either under construction or those
that are under development, and any construction contract awards are
capitalized and included in "Student housing properties, net" in the
accompanying combined balance sheets. Upon completion of the project, costs are
transferred into the applicable asset category and depreciation commences.
Costs associated with projects that are terminated are expensed at the time of
termination. The amount of interest capitalized during the year approximated
$437,000, $437,000, and $564,000 for the years ended December 31, 2003, 2002,
and 2001, respectively. Amortization of deferred financing costs totaling
approximately $106,000, $174,000, and $-0- was capitalized in the years ended
December 31, 2003, 2002, and 2001, respectively.

STUDENT HOUSING FACILITIES SUBJECT TO LEASES

The Predecessor enters into ground and facility leases ("Leases") with
university systems and colleges ("Lessor") to finance, construct, and manage
student housing facilities. Under the terms of the leases, the Lessor has title
to the land and any improvements placed thereon. The Lease terminates upon
final repayment of the construction related financing, the amortization period
of which is contractually stipulated. Pursuant to Emerging Issues Task Force
(EITF) No. 97-10: The Effect of Lessee Involvement in Asset Construction, the
Predecessor's involvement in construction requires the Lessor's post
construction ownership of the improvements to be treated as a sale with a
subsequent leaseback by the Predecessor. The sale-leaseback transaction has
been accounted for as a financing, and as a result, any fee earned during
construction is deferred and recognized over the term of the lease. The
resulting financing obligation is reflected at the terms of the underlying
financing, i.e., interest is accrued at the contractual rates and principal
reduces in accordance with the contractual principal repayment schedules.

The Predecessor reflects these assets subject to facility leases at historic
cost, less depreciation. Costs are amortized, and deferred fee revenues in
excess of the cost of providing the service are recognized, over the lease
term.

REPAIRS, MAINTENANCE, AND MAJOR IMPROVEMENTS

The costs of ordinary repairs and maintenance are charged to operations when
incurred. Major improvements that extend the life of an asset are capitalized
and depreciated over the remaining useful life of the asset. Planned major
repair, maintenance and improvement projects are capitalized when performed.

LONG-LIVED ASSETS -- IMPAIRMENT

Statement of Financial Accounting Standards ("SFAS") No. 144, "Accounting for
the Impairment and Disposal of Long-Lived Assets" requires that long-lived
assets to be held and used be reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset may not
be recoverable. As of December 31, 2003, management determined that no
indicators of impairment existed.

F-19

AMERICAN CAMPUS COMMUNITIES PREDECESSOR
NOTES TO COMBINED FINANCIAL STATEMENTS - (CONTINUED)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED)

On a periodic basis, management is required to make subjective assesses whether
there are any indicators that the value of the real estate properties may be
impaired. A property's value is considered impaired if management's estimate of
the aggregate future cash flows (undiscounted and without interest charges) to
be generated by the property are less than the carrying value of the property.

LONG LIVED ASSETS -- HELD FOR SALE

Long-lived assets to be disposed of are classified as held for sale in the
period in which all of the following criteria are met:

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.

Concurrent with classification, the asset is recorded at the lower of cost or
fair value, and depreciation ceases.

DISCONTINUED OPERATIONS

DEFERRED FINANCING COSTS

The Predecessor defers financing costs and amortizes the costs over the terms
of the related debt using the effective yield method. Upon repayment of or in
conjunction with a material change in the terms of the underlying debt
agreement, any unamortized costs are charged to earnings.

Amortization expense, net of amounts capitalized, approximated $587,000,
$564,000, and $406,000 for the years ended December 31, 2003, 2002, and 2001,
respectively. Accumulated amortization at December 31, 2003 and 2002
approximated $1,777,000 and $1,084,000, respectively.

RENTAL REVENUES AND RELATED RECEIVABLES

Students are required to execute lease contracts with payment schedules that
vary from single to monthly payments. Receivables are recorded when billed,
revenues and related lease incentives are recognized on a straight-line basis
over the term of the contracts, and balances are considered past due when
payment is not received on the contractual due date. The Company has no
contingent rental contracts.

F-20

AMERICAN CAMPUS COMMUNITIES PREDECESSOR
NOTES TO COMBINED FINANCIAL STATEMENTS - (CONTINUED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED)

Generally, the Predecessor requires each executed contract to be accompanied by
a refundable security deposit and a signed parental guarantee. Security
deposits are refundable, net of any outstanding charges, upon expiration of the
underlying contract.

Allowances for doubtful accounts are established when management determines
that collection of specific receivables are doubtful. When management has
determined a receivable to be uncollectible, the receivable is removed as an
asset with a corresponding reduction in the allowance for doubtful accounts.

The allowance for doubtful accounts is summarized as follows:

BALANCE,
BEGINNING OF CHARGED TO BALANCE, END
PERIOD EXPENSE WRITE-OFFS OF PERIOD
------------ ---------- ---------- ------------

Year ended December 31, 2001 ......... $ 503,000 $391,200 $ -- $ 894,200
Year ended December 31, 2002 ......... 894,200 737,653 (55,653) 1,576,200
Year ended December 31, 2003 ......... 1,576,200 583,643 (102,943) 2,056,900

DEVELOPMENT SERVICES REVENUE AND COST RECOGNITION -- THIRD PARTY PROJECTS

Costs associated with the pursuit of development and construction management
contracts are expensed as incurred, until such time that management has been
notified of a contract award or otherwise believes it is probable the contract
will be awarded. At such time, the reimbursable portion of such costs are
recorded as receivables. Internal costs are then deferred and recognized in
relation to the revenues earned on executed contracts. Development and
construction revenues and related costs are recognized in income by the
Predecessor over the course of the construction phases of the projects relative
to the percentage of completion of the respective projects, as determined by
construction costs incurred relative to total estimated construction costs.
Incentive fees are recognized when performance has been verified by an
independent third party.

FACILITY MANAGEMENT REVENUES

Management fees are recognized when earned in accordance with each management
contract. Incentive management fees are recognized when the incentive criteria
have been met.

OPERATING LEASE EXPENSE AND CONTINGENT LEASE EXPENSE

Operating lease expense is recognized on a straight line basis over the term of
the lease. Differences between payments and the straight line recognition
deferral are accrued and adjusted in the appropriate period.

Lease payments required under the Company's facility lease agreements (Note 4)
which represent 50% of defined net cash flows on an annual basis are accrued
and expensed relative to the net income generated by the applicable facility.

ADVERTISING EXPENSE

Advertising expenses are charged to income during the period incurred. The
Predecessor uses no direct response advertising. Advertising expenses charged
to income approximated $931,000, $556,000, and $512,000 in 2003, 2002, and
2001, respectively.

FEDERAL INCOME TAXES

No provision for income taxes has been recorded in the combined financial
statements, as the owners are required to report their share of the
Predecessor's earnings in their respective income tax returns.

F-21

AMERICAN CAMPUS COMMUNITIES PREDECESSOR
NOTES TO COMBINED FINANCIAL STATEMENTS - (CONTINUED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED)

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

Derivative financial instruments are reported on the balance sheet at fair
value. Changes in fair value are recognized either in earnings or as other
comprehensive income in the owners' equity section, depending on the nature of
the exposure being hedged.

The Predecessor uses interest rate swaps and caps designated as cash flow
hedges to effectively convert a portion of its floating rate debt to fixed
rate, thus reducing the impact of rising interest rates on interest payments.
The interest differential to be paid or received is accrued as interest
expense. The Predecessor's counter-parties are major financial institutions.

COMPREHENSIVE INCOME (LOSS)

Comprehensive income (loss) includes net loss and other comprehensive income
(loss) and is presented in the combined statements of changes in owners'
equity. Accumulated other comprehensive income is displayed as a separate
component of owners' equity and consists of unrealized gains (losses) on
derivative instruments.

FINANCIAL INSTRUMENTS

The Predecessor does not hold or issue financial instruments for trading
purposes. The fair value of financial instruments was estimated based on the
following methods and assumptions:

Cash and Cash Equivalents, Restricted Cash and Short-Term Investment, Student
Contracts Receivable, Accounts Payable and Accrued Expenses, Accrued Interest
Payable, Security Deposits and Deferred Income: the carrying amount
approximates fair value, due to the short maturity of these instruments.

Bonds Payable: the fair value of bonds payable is based on market quotes for
bonds outstanding.

Mortgage Notes Payable: the fair value of mortgage notes payable is estimated
as the present value of the cash flows at current rates through maturity.

Construction and Short-Term Notes Payable: the fair value of construction notes
payable approximates carrying value due to the variable interest-rate feature
of these instruments.

Derivative Instruments: the estimated fair value of derivative instruments are
based on calculations provided by independent, third party financial
institutions and represent the discounted future cash flows expected, based on
the projected future interest rate curves over the life of the instrument.

The carrying amount and estimated fair value of financial assets and
liabilities at December 31, 2003 are as follows:

FAIR VALUE CARRYING AMOUNTS
---------- ----------------

Financial Assets:
Cash and cash equivalents .......................... $ 5,227,191 $ 5,227,191
Restricted cash and short-term investments ......... 9,503,243 9,503,243
Student contracts receivable, net .................. 2,354,519 2,354,519
Financial Liabilities:
Accounts payable and accrued expenses .............. $ 6,268,373 $ 6,268,373
Accrued interest payable ........................... 2,179,711 2,179,711
Security deposits .................................. 1,885,760 1,885,760
Deferred income .................................... 7,318,411 7,318,411
Line of credit ..................................... 73,560 73,560
Bonds payable ...................................... 74,477,681 61,010,000
Mortgage notes payable ............................. 212,841,979 188,066,800
Construction notes payable ......................... 26,446,614 26,446,614
Derivative instruments ............................. 152,956 152,956

F-22

AMERICAN CAMPUS COMMUNITIES PREDECESSOR
NOTES TO COMBINED FINANCIAL STATEMENTS - (CONTINUED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED)

RECLASSIFICATIONS

Certain prior-year amounts have been reclassified to conform to current-year
presentation.

3. INVESTMENTS IN AFFILIATED STUDENT HOUSING PROPERTIES

Student housing properties at December 31, consist of the following:

HISTORICAL COST
-----------------------------
2003 2002
----------- -------------
Student housing properties:
Land ............................... $ 35,433,720 $ 35,885,240
Building and improvements .......... 175,436,207 174,719,348
Furniture, fixtures and equipment .. 6,672,482 6,507,358
Construction in progress ........... 22,960,761 5,050,115
------------ ------------
240,503,170 222,162,061
Less accumulated depreciation ...... (17,596,602) (11,930,467)
------------ ------------
Student housing properties, net ..... $222,906,568 $210,231,594
============ ============

The Predecessor acquired Callaway House for $25,476,718 and Science Drive for
$24,618,096. The acquisition of both properties was accounted for using the
purchase method of accounting and the results of operations for both entities
are included in the results of operations from the date of acquisition. The
following table presents the allocation of the purchase price, which includes
approximately $119,000 and $67,000 in acquition costs for Callaway House and
Science Drive, respectively.

CALLAWAY HOUSE SCIENCE DRIVE
-------------- -------------

Land ......................................... $ 4,725,890 $ 4,673,489
Building ..................................... 18,903,560 18,693,953
Furniture, fixtures and equipment ............ 1,299,458 326,400
Net fair value of tangible assets acquired and
liabilities assumed ......................... 547,810 924,254
----------- -----------
$25,476,718 $24,618,096
=========== ===========

Additional selected information includes:

SQUARE
PROPERTY LOCATION UNIVERSITY FOOTAGE UNITS BEDS DATE ACQUIRED
- -------- ---------------- ----------------- ------- ----- ---- --------------

Callaway House ................... College Station, Texas A&M 145,068 173 504 March 30, 2001
Texas University
Village at Science Drive ......... Orlando, Florida University of 288,288 192 732 November 15, 2001
Central Florida

On a pro forma (unaudited) basis, if these two properties had been acquired on
January 1, 2001, the statement of operations for the year-ended December 31,
2001 would have included approximately $4,794,000 of additional revenues,
$2,437,000 of additional operating expenses, $781,000 of additional
depreciation and amortization, $1,169,000 of additional interest expense, and
would have resulted in an increase in net loss of approximately $407,000.

In May 2003, an arson fire destroyed a student housing facility under
construction. The construction project was insured at limits in excess of the
cost to rebuild and the related lost income. Reconstruction commenced in June
2003 and the Predecessor has received insurance proceeds

F-23

AMERICAN CAMPUS COMMUNITIES PREDECESSOR
NOTES TO COMBINED FINANCIAL STATEMENTS - (CONTINUED)

3. INVESTMENTS IN AFFILIATED STUDENT HOUSING PROPERTIES - (CONTINUED)

totaling $4,000,000 as of December 31, 2003, and additional $1,000,000 in
January 2004, $1,000,000 in March 2004, and $1,750,000 in April 2004. While the
ultimate outcome of the settlement of this claim is not determinable at this
time, management believes the remaining costs will be fully reimbursed under
the insurance contract and anticipates no material loss or gain on the claim. A
receivable of $3,750,000 from the insurance company is included in other
current assets at December 31, 2003.

4. STUDENT HOUSING FACILITIES SUBJECT TO LEASES

The Predecessor has entered into facility and ground lease agreements
("Leases") with certain state university systems and colleges (the "Lessor")
for the purpose of developing, constructing, and operating student housing
facilities on university campuses. Under the terms of the leases, title to the
constructed facilities is held by the Lessor and the Lessor receives a de
minimus base rent paid at inception and 50% of defined net cash flows on an
annual basis through the term of the lease.

Pursuant to the Leases, in the event the leasehold estates do not achieve
Financial Break Even, (defined as revenues less operating expenses, excluding
management fees, less debt service) the Lessor would be required to make a
rental payment, also known as the Contingent Payment, sufficient to achieve
Financial Break Even until the facilities received investment grade ratings.
Future net cash flow distributions would be first applied to repay such
Contingent Payments. Beginning November 1999 and December 2002, The Texas A&M
University System is no longer required to make Contingent Payments under the
Prairie View A&M University Phase I, II, III (University Village) and Phase IV
(University College) leases, respectively, as the facilities received
investment grade ratings.

In the event the Company seeks to sell its leasehold interest, the Leases
provide the Lessors the right of first refusal of a bona fide purchase offer
and an option to purchase the lessee's rights under the lease.

In conjunction with the execution of each ground lease, ACC has entered into a
separate five-year agreement to manage the facilities for 5% of defined gross
receipts. The five-year term of the management agreement is not contingent upon
the continuation of the facility lease. Upon expiration of the respective 5
year management agreements, the agreements continue on a month-to-month basis.

The Predecessor's student housing facilities subject to facility leases at
December 31 are as follows:

HISTORICAL COST
COMMENCEMENT/ -------------------------------
LESSOR/UNIVERSITY EXPIRATION 2003 2002
- ----------------------------------------------------------- -------------------- ------------ ------------

Texas A&M University System/Prairie View October 6, 1999/
A&M University ........................................... August 31, 2038 $ 37,368,145 $ 37,133,325
Texas A&M University System/Texas A&M October 6, 1999/
International ............................................ August 31, 2038 5,889,125 5,880,036
Texas A&M University System/Prairie View October 1, 1999/
A&M University ........................................... August 31, 2039 23,366,292 19,852,580
University of Houston System/University of September 27, 2000/
Houston .................................................. August 31, 2041 17,863,469 17,833,515
------------ ------------
84,487,031 80,699,456
Less accumulated depreciation ............................. (14,773,679) (11,503,128)
------------ ------------
Student housing facilities subject to leases, net ......... $ 69,713,352 $ 69,196,328
============ ============

STUDENT HOUSING FACILITIES SUBJECT TO LEASES -- SOLD AND HELD FOR SALE

The Predecessor entered into facility lease agreements with the Texas State
University System in 2000 and 2001, obtained the construction financing and
constructed two phases of student housing on the campus of Lamar University, at
a cost of approximately $10,439,000 and $12,567,000, respectively.

F-24

AMERICAN CAMPUS COMMUNITIES PREDECESSOR
NOTES TO COMBINED FINANCIAL STATEMENTS - (CONTINUED)

4. STUDENT HOUSING FACILITIES SUBJECT TO LEASES - (CONTINUED)

Shortly after the completion of construction and fall openings in 2001 and
2002, the facility leases were sold to a foundation affiliated with the
university and the related construction debt was repaid. Gain on these sales
was not material. As these leaseholds were held for sale from inception, no
depreciation was recorded on them. Simultaneous with the sale of the leases,
the Predecessor entered into facility management agreements with the owners.

During 2003, the Predecessor entered into a ground lease with Weatherford
College, obtained construction financing and constructed a student housing
facility which opened in Fall 2003. It is anticipated that this leasehold will
be sold to Weatherford College and the related debt repaid in early 2004. The
leasehold is reflected as Student housing facility subject to lease -- held for
sale and the related construction loan is reflected as Note payable secured by
leasehold held for sale in the December 31, 2003 balance sheet and is included
in the student housing rentals segment (Note 7). No depreciation has been
recorded on this facility.

5. DEBT

The Predecessor's debt is as follows as of December 31:

2003 2002
---------- ----------

Short-term notes payable .............................. $ 73,560 $ 790,157
Construction notes payable ............................ 26,446,614 1,166,586
Mortgage notes payable ................................ 188,066,800 189,884,187
Bonds payable ......................................... 61,010,000 57,864,824
------------ ------------
Total debt ............................................ 275,596,974 249,705,754
Less short-term debt and current portion of
long-term debt ...................................... (11,403,392) (3,817,065)
------------ ------------
Total long-term debt, net of current portion .......... $264,193,582 $245,888,689
============ ============

SHORT-TERM NOTES PAYABLE

On May 1, 2002, Predecessor entered into a line of credit facility maturing
April 29, 2004 bearing interest at prime plus 1.00% (5.00% at December 31,
2003). The line of credit is limited to 66.7% of forecasted annual cash flow
with a maximum of $1,000,000. The facility is secured by reimbursable
development and acquisition costs and leasehold distributions. At December 31,
2003, $73,560 was drawn and $876,854 was available under the line of credit. At
December 31, 2002, $421,657 was outstanding under the line of credit.

On December 16, 2002, the Predecessor executed a note payable in the amount of
$368,500 bearing interest at higher of LIBOR or 5.00% (5.00% at December 31,
2002) maturing on December 1, 2003, to finance the acquisition of land to be
used for future development with a university system. On August 19, 2003, the
university acquired the land and the loan was repaid.

F-25

AMERICAN CAMPUS COMMUNITIES PREDECESSOR
NOTES TO COMBINED FINANCIAL STATEMENTS - (CONTINUED)

5. DEBT - (CONTINUED)

CONSTRUCTION NOTES PAYABLE

At December 31, 2003, the Predecessor has the following five advancing
construction notes payable secured by student housing properties constructed or
being constructed by the Predecessor. The construction notes payable require
interest only payments through maturity.

BALANCE AT MAXIMUM STATED INTEREST RATE AT
DECEMBER 31, LOAN INTEREST DECEMBER 31, MATURITY
PROPERTY 2003 AMOUNT RATE 2003 DATE
- -------- ------------ ------- -------- ---------------- --------

Village at Temple ................. $ -- $33,200,000 LIBOR +2.25% 3.43% 10/29/05
Village at Temple (mezzanine) ..... 5,196,949 6,550,000 18.00% 18.00% 10/29/05
Village at Fresno State ........... 8,279,762 12,925,000 LIBOR +2.25% 3.43% 9/30/05
Village at San Bernardino ......... 4,890,198 19,800,000 LIBOR +2.25% 3.40% 7/31/05
Coyote Village (a)(b) ............. 8,079,705 8,332,921 LIBOR +2.30% 4.00% 9/5/04
----------- ----------- -----
Total/weighted average rate ....... $26,446,614 $80,807,921 6.46%
=========== =========== =====

- ----------------
(a) Loan is secured by a facility lease with Weatherford College. Under the
terms of the facility lease, Weatherford College is purchasing the
facility lease and this note will be repaid with closing proceeds, which
is expected to occur in early 2004. (See Note 4)

(b) Rate is subject to a floor of 4.00%.

MORTGAGE NOTES PAYABLE

Mortgage notes payable at December 31, 2003 consists of 12 notes secured by
operating properties or leaseholds consisting of:

INTEREST RATE AT
PRINCIPAL STATED DECEMBER 31, MATURITY
PROPERTY OUTSTANDING INTEREST RATE 2003 DATE AMORTIZATION
- -------- ----------- ------------- ---------------- -------- ------------

Cullen Oaks (a) ......................... $ 17,286,918 LIBOR +1.90% 3.05% 11/17/08 30 years
Village at Boulder Creek ................ 16,758,163 5.71% 5.71% 11/1/12 30 years
River Club Apartments ................... 18,703,602 8.18% 8.18% 8/1/10 30 years
River Walk Townhomes .................... 7,763,690 8.00% 8.00% 9/1/09 30 years
Village at Alafaya Club ................. 20,661,945 8.16% 8.16% 8/1/10 30 years
Village at Science Drive (b)(c) ......... 19,500,000 LIBOR +2.50% 4.85% 12/10/04 Interest only
Village at Blacksburg ................... 21,573,785 7.50% 7.50% 1/1/11 30 years
Commons on Apache ....................... 7,749,306 7.66% 7.66% 6/1/09 30 years
Village on University ................... 4,826,056 8.32% 8.32% 12/1/05 30 years
Village on University ................... 21,832,188 7.95% 7.95% 12/1/05 30 years
Village at Riverside .................... 11,468,130 7.35% 7.35% 1/1/11 30 years
Callaway House .......................... 19,943,017 7.10% 7.10% 4/1/11 30 years
------------ ----
Total/weighted average rate ............. $188,066,800 6.85%
============ ====

- ----------------
(a) Floating rate was swapped to a fixed rate of 5.54%.

(b) Note has two one-year extensions, which management expects to exercise.
Consequently, this debt is classified as noncurrent in the accompanying
balance sheet.

BONDS PAYABLE

Bonds payable consists of three issues secured by student housing
ground/facility leases, with interest and principal paid semi-annually and
annually, respectively, through maturity. Covenants include,

F-26

AMERICAN CAMPUS COMMUNITIES PREDECESSOR
NOTES TO COMBINED FINANCIAL STATEMENTS - (CONTINUED)

5. DEBT - (CONTINUED)

among others, budgeted and actual debt service coverage ratios. The bonds are
nonrecourse to ACC. Payment of regularly scheduled principal payments is
guaranteed by MBIA Insurance Corporation. Bonds payable at December 31, 2003
are as follows:

PRINCIPAL REQUIRED
------------------------- WEIGHTED MONTHLY
MORTGAGED FACILITIES DECEMBER 31, AVERAGE MATURITY DEBT
SERIES SUBJECT TO LEASES ORIGINAL 2003 RATE THROUGH SERVICE
- ------ -------------------- -------- ------------ -------- -------- --------

1999 University Village --
PVAMU/TAMIU $39,270,000 $36,415,000 7.71% September 2023 $302,000
2001 University College --
PVAMU 20,995,000 20,270,000 7.49% August 2025 158,000
2003 University College --
PVAMU 4,325,000 4,325,000 6.05% August 2028 28,000
----------- ----------- ---- --------
Total/weighted average rate $64,590,000 $61,010,000 7.51% $488,000
=========== =========== ==== ========

SCHEDULE OF DEBT MATURITIES

Scheduled maturities (reflecting automatic extensions where applicable) of
debt, for each of the five years subsequent to December 31, 2003, are as
follows:

SCHEDULED DUE AT
PRINCIPAL MATURITY TOTAL
----------- ------------ ------------
2004 ............... $ 3,250,127 $ 73,560 $ 3,323,687
2005 ............... 3,473,820 31,174,163 34,647,983
2006 ............... 3,360,905 27,579,705 30,940,610
2007 ............... 3,596,289 13,169,960 16,766,249
2008 ............... 3,784,122 15,971,618 19,755,740
Thereafter ......... 73,428,712 96,733,993 170,162,705
----------- ------------ ------------
$90,893,975 $184,702,999 $275,596,974
=========== ============ ============

Payment of principal and interest were current at December 31, 2003. Mortgage
notes (except for Village at Science Drive) and bonds payable are subject to
prepayment penalties.

CERTAIN OTHER INFORMATION

The following table reconciles the carrying amount of long-term debt for
January 1, 2001 to December 31, 2003:

YEARS ENDED DECEMBER 31,
---------------------------------------------
2003 2002 2001
--------- ---------- --------

Balance, beginning of period ...................... $248,915,597 $ 234,448,941 $ 178,277,318
Additions:
New mortgage loans ............................... -- 17,000,000 76,787,421
New bond issues .................................. 4,325,000 -- --
Draws under advancing construction loans ......... 25,280,027 30,968,591 1,207,357
Deductions:
Repayment of construction financings ............. -- (31,009,362) (20,153,121)
Scheduled repayments of principal ................ (2,997,210) (2,492,573) (1,670,034)
------------ ------------- -------------
$275,523,414 $ 248,915,597 $ 234,448,941
============ ============= =============

F-27

AMERICAN CAMPUS COMMUNITIES PREDECESSOR
NOTES TO COMBINED FINANCIAL STATEMENTS - (CONTINUED )

6. INTEREST RATE HEDGES

In connection with construction of a student housing facility, the Predecessor
entered into an interest rate swap on September 26, 2001 (effective November
26, 2001 through August 25, 2002) that was designated to hedge its exposure to
fluctuations in interest payments attributed to changes in interest rates
associated with payments on its advancing construction note payable. Under the
terms of the interest rate swap agreement, the Predecessor paid a fixed rate of
2.82% and received a floating rate of 30 day LIBOR during the construction
period of the loan. This swap contractually expired on August 25, 2002.

In connection with the 2001 acquisition of a student housing facility the
Predecessor purchased an interest rate cap effective November 16, 2001 through
December 10, 2004, for $52,000. The rate cap pays interest above LIBOR of 7.5%
and has been designated to hedge the Predecessor's exposure to increases in
cash outflows for interest payments on a variable rate loan in the amount of
$19,500,000. The rate cap is reflected at fair value of $-0- and the decrease
in fair value is recorded in other comprehensive income in the accompanying
combined balance sheet at December 31, 2003.

In connection with the December 2003 extension of a construction note payable,
the Predecessor entered into an interest rate swap on November 19, 2003
(effective December 15, 2003 through November 15, 2008) that was designated to
hedge its exposure to fluctuations on interest payments attributed to changes
in interest rates associated with payments on its advancing construction note
payable. Under the terms of the interest rate swap agreement, the Predecessor
pays a fixed rate of 5.54% and receives a floating rate of LIBOR plus 1.9%. The
interest rate swap had a fair value of approximately $173,000 at December 31,
2003.

The Predecessor does not expect to reclassify a material amount of net gains on
derivative instruments from accumulated other comprehensive income to earnings
in 2004. Ineffectiveness resulting from the Predecessor's hedges is not
material.

7. SEGMENTS

The Predecessor defines business segments by their distinct customer base and
service provided. The Predecessor has identified three reportable segments:
Student Housing Rentals, from student housing properties and student housing
facilities subject to leases, Facility Development Services, and Facility
Management Services. Management evaluates each segment's performance based on
operating income before depreciation, amortization, minority interest in losses
and allocation of corporate overhead. The accounting policies of the reportable
segments are the same as those described in the summary of significant
accounting policies. Intercompany fees are reflected at the contractually
stipulated amounts.

YEARS ENDED DECEMBER 31,
--------------------------------------------
2003 2002 2001
---------- ---------- ---------

STUDENT HOUSING RENTALS
Rental revenues ................................... $50,765,396 $48,984,486 $39,907,217
Other income ...................................... 40,964 114,207 213,911
----------- ----------- -----------
Total revenues from external customers ............ 50,806,360 49,098,693 40,121,128
Operating expenses ................................ 23,329,370 22,286,527 17,511,297
Ground lease ...................................... 584,153 664,228 631,710
Interest expense .................................. 17,851,913 17,231,965 15,449,611
----------- ----------- -----------
Operating income before depreciation, amortization,
minority interest in losses and allocation of
corporate overhead ............................... $ 9,040,924 $ 8,915,973 $ 6,528,510
=========== =========== ===========
Depreciation and amortization ..................... $ 9,502,331 $ 8,771,602 $ 7,163,304
=========== =========== ===========

F-28

AMERICAN CAMPUS COMMUNITIES PREDECESSOR
NOTES TO COMBINED FINANCIAL STATEMENTS - (CONTINUED)

7. SEGMENTS - (CONTINUED)

YEARS ENDED DECEMBER 31,
---------------------------------------------
2003 2002 2001
--------- --------- ---------

Total segment assets at December 31 ...................... $291,178,043 $286,159,876 $277,599,130
============ ============ ============
CONSTRUCTION MANAGEMENT AND FACILITY
DEVELOPMENT SERVICES
Development and construction management fees ............. $ 7,938,796 $ 5,074,420 $ 2,878,409
Other income ............................................. 25,118 337,317 77,993
------------ ------------ ------------
Total revenues from external customers ................... 7,963,914 5,411,737 2,956,402
Operating expenses ....................................... 3,794,850 3,774,390 3,321,901
Interest expense ......................................... 59,214 160,258 106,890
------------ ------------ ------------
Operating income (loss) before depreciation,
amortization, minority interest in losses and
allocation of corporate overhead ........................ $ 4,109,850 $ 1,477,089 $ (472,389)
============ ============ ============
Total segment assets at December 31 ...................... $ 34,639,318 $ 13,807,052 $ 7,766,648
============ ============ ============
FACILITY MANAGEMENT SERVICES
Facility management fees from external customers ......... $ 1,189,294 $ 793,835 $ 772,959
Other income ............................................. -- 150,832 258,576
------------ ------------ ------------
Total revenues from external customers ................... 1,189,294 944,667 1,031,535
Intersegment revenues .................................... 982,880 929,972 728,463
------------ ------------ ------------
Total revenues ........................................... 2,172,174 1,874,639 1,759,998
Operating expenses ....................................... 1,522,674 1,674,894 1,062,808
Interest expense ......................................... -- -- --
------------ ------------ ------------
Operating income before depreciation, amortization,
minority interest in losses and allocation of
corporate overhead ...................................... $ 649,500 $ 199,745 $ 697,190
============ ============ ============
Total segment assets at December 31 ...................... $ 614,750 $ 261,200 $ 326,313
============ ============ ============
RECONCILIATIONS
Total segment revenues ................................... $ 60,942,448 $ 56,385,069 $ 44,837,528
Elimination of intersegment revenues ..................... (982,880) (929,972) (728,463)
Unallocated corporate other income ....................... 46,120 69,627 145,765
------------ ------------ ------------
Total consolidated revenues .............................. $ 60,005,688 $ 55,524,724 $ 44,254,830
============ ============ ============
Segment operating income before depreciation,
amortization, minority interest in losses and
allocation of corporate overhead ........................ $ 13,800,274 $ 10,592,807 $ 6,753,311
Depreciation and amortization ............................ 9,800,511 8,975,598 7,356,753
Net unallocated expenses relating to corporate
overhead ................................................ 4,959,801 3,786,845 2,445,484
Minority interest in losses .............................. 15,550 30,189 109,711
------------ ------------ ------------
Net loss ................................................. $ (944,488) $ (2,139,447) $ (2,939,215)
============ ============ ============
Total segment assets ..................................... $326,432,111 $300,228,128 $285,692,091
Unallocated corporate assets ............................. 4,134,348 7,430,235 9,945,381
------------ ------------ ------------
Total assets ............................................. $330,566,459 $307,658,363 $295,637,472
============ ============ ============

F-29

AMERICAN CAMPUS COMMUNITIES PREDECESSOR
NOTES TO COMBINED FINANCIAL STATEMENTS - (CONTINUED )

8. RELATED PARTY TRANSACTIONS

The Predecessor borrows funds from certain of its owners to fund short-term
working capital needs. These notes are unsecured and accrue interest at 16%
compounded monthly. Borrowings under these arrangements totaled $1,020,000 and
$606,800 for 2003 and 2002, respectively. There were no balances outstanding at
December 31, 2003 and 2002. Interest expense on related party notes payable for
2003, 2002, and 2001 totaled $35,826, $72,221, and $99,445, respectively.

Pursuant to an employment agreement with a former key employee of the
Predecessor, the Predecessor is required to make periodic payments and provide
certain other benefits through the earlier of 2005, or if and when certain
future capital events occur. The present value of future payments of
approximately $1,023,000 has been expensed during the year ended December 31,
2003, and is included in accounts payable and accrued expenses in the
accompanying combined balance sheet.

An affiliate of Predecessor has an ownership interest in Dobie Center
Properties, Ltd. which owns Dobie Center, a student housing facility. Pursuant
to a management agreement with the Dobie Center, the Predecessor receives
facility management fees representing 3% of gross receipts and 6% of qualifying
capital projects, and commercial leasing fees of 4% of commercial leases. Such
fees totaled approximately $335,000, $356,000, and $385,000 for 2003, 2002, and
2001, respectively. The management agreement began operating on a
month-to-month basis upon expiration in May 2002.

9. LEASE COMMITMENTS

ACC entered into a sublease for corporate office space beginning August 15,
2002, and expiring December 31, 2010. The terms of the sublease provide for a
period of free rent and scheduled rental rate increases and common area
maintenance charges upon expiration of the free rent period. Concurrent with
the sublease of the new office, the Predecessor sublet its existing office
space through the expiration of the lease in October 2003.

The Predecessor entered into a ground lease agreement on October 2, 2003 for
the purpose of constructing a student housing facility near the campus of
Temple University in Philadelphia, Pennsylvania. The agreement terminates June
30, 2079 and has four six year extensions available; however, the university
unilaterally may elect not to extend. Under the terms of the ground lease, the
lessor receives annual minimum rents of $100,000 and contingent rental payments
based on a defined formula.

The Predecessor also has various operating and capital leases for furniture,
office and technology equipment, which expire through 2008. Rental expense
under the operating lease agreements approximated $550,000, $470,000, and
$370,000 in 2003, 2002, and 2001, respectively, net of sublease income of
approximately $89,000, $28,000, and $-0-.

Investments in leasehold estates at December 31, 2003 include approximately
$103,000 (net of $66,000 accumulated amortization) related to a capital lease
of technology. Furniture, fixtures and equipment at December 31, 2003 include
approximately $410,000 (net of $154,000 of accumulated amortization) related to
assets under capital leases.

F-30

AMERICAN CAMPUS COMMUNITIES PREDECESSOR
NOTES TO COMBINED FINANCIAL STATEMENTS - (CONTINUED)

9. LEASE COMMITMENTS- (CONTINUED)

Future minimum commitments over the life of all leases subsequent to December
31, 2003, are as follows:

OPERATING CAPITAL
--------- -------
2004 .................................. $ 568,697 $160,584
2005 .................................. 573,156 150,667
2006 .................................. 492,262 101,177
2007 .................................. 465,198 57,399
2008 .................................. 471,308 20,825
Thereafter ............................ 7,911,140 --
----------- --------
Total minimum lease payments .......... 10,481,761 490,652
Amount representing interest .......... -- 80,572
----------- --------
Balance of minimum lease payments ..... $10,481,761 $410,080
=========== ========

The capital lease obligations are reflected in other current and noncurrent
liabilities in the accompanying combined balance sheets. Amortization of assets
recorded under capital leases for the years ended December 31, 2003, 2002, and
2001 was immaterial.

10. CONCENTRATION OF RISKS

The Predecessor has a significant student housing facility presence on a single
university campus, which represents approximately 21%, 22%, and 24% of the
Predecessor's combined revenues for 2003, 2002, and 2001, respectively, and
approximately 60% of student accounts receivable at December 31, 2003. The
unlikely event of significantly diminished enrollment at this university could
have a negative impact on the Predecessor's ability to achieve its forecasted
revenues and profit levels.

11. COMMITMENTS AND CONTINGENCIES

In the normal course of business, the Predecessor is subject to claims,
lawsuits, and legal proceedings. While it is not possible to ascertain the
ultimate outcome of such matters, management believes that the aggregate amount
of such liabilities, if any, in excess of amounts provided or covered by
insurance, will not have a material adverse effect on the consolidated
financial position or results of operations of the Predecessor.

Guarantees

Pursuant to certain third party development agreements, ACC provides guarantees
of alternate housing for students if the project is not completed on time for
reasons other than force majeure. These guarantees are limited to the related
development fees (approximately $4.5 million) and are offset by general
contractor liquidated damages and budgeted operating expenses not incurred due
to the facility not being open.

ACC also provides project cost guarantees, subject to force majeure. These
guarantees are also limited to the amount of the aforementioned related
development fees. The development budget consists primarily of costs included
in the general contractors' guaranteed maximum price contract ("GMP"). The GMP
obligates the general contractor, subject to force majeure and approved change
orders, to cover cost overruns. In addition, the GMP is secured with payment
and performance bonds.

In 2002, on a project not included above, ACC provided a guarantee of all
performance obligations of the developer, limited to $4 million. This project
was completed in 2003. On another project, in addition to the alternate housing
and budget guarantees listed above, ACC has guaranteed losses up to $3 million
in excess of the development fee if loss is due to any failure of ACC to
maintain, or cause its professionals to maintain, required insurance for a
period of five years beyond completion of the project (August 2009).

F-31

AMERICAN CAMPUS COMMUNITIES PREDECESSOR
NOTES TO COMBINED FINANCIAL STATEMENTS - (CONTINUED)

11. COMMITMENTS AND CONTINGENCIES - (CONTINUED)

Except for the $3 million guarantee related to required insurance, these
guarantees expire upon completion of certain developer obligations of the
related projects, which are satisfied approximately one year after completion.

At December 31, 2003, all projects were on schedule and within budget. The
Company has estimated the fair value of guarantees entered into or modified
after December 31, 2002, the effective date of FASB Interpretation No. 45
Guarantor's Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others, to be immaterial.

Letter of Credit

Performance under the sublease of office space (Note 9) is supported by a
letter of credit in the original amount of $291,600 ($97,200 at December 31,
2003), which may be drawn in the event of the Predecessor's noncured default.
The letter of credit reduces monthly by $48,600 beginning September 1, 2003
through February 1, 2004. No amounts have been drawn to date on the letter of
credit.

12. INVESTMENTS IN REAL ESTATE

Following is certain information related to the Predecessor's investment in
real estate as of December 31, 2003:

COST
INITIAL CAPITALIZED
PROPERTY ENCUMBRANCES COST SUBSEQUENTLY
- -------- ------------ ------- ------------

FACILITIES SUBJECT TO LEASES
University Village, Prairie View, TX ......... $ 31,584,000 $ 36,505,582 $ 862,563
University College, Prairie View, TX ......... 24,595,000 22,649,755 716,537
University Village, Laredo, TX ............... 4,831,000 5,843,771 45,354
Cullen Oaks, Houston, TX ..................... 17,286,918 17,641,633 221,836
Coyote Village, Weatherford, TX (Held
for sale at December 31, 2003) .............. 8,079,705 7,975,713 --
STUDENT HOUSING PROPERTIES
University Village at Boulder Creek,
Boulder, CO ................................. 16,758,162 15,826,096 348,402
Village at Boulder Creek, Boulder, CO ........ -- 181,390 8,652
River Club Apartments, Athens, GA ............ 18,703,602 23,132,817 531,250
River Walk Townhomes, Athens, GA ............. 7,763,690 9,636,185 225,985
Village at Alafaya, Orlando, FL .............. 20,661,945 25,638,510 366,920
Village at Science Drive, Orlando, FL ........ 19,500,000 23,693,844 (1,497)
Village at Blacksburg, Blacksburg, VA ........ 21,573,785 25,981,359 953,327
Commons on Apache, Tempe, AZ ................. 7,749,306 9,535,581 776,512
Village on University, Tempe, AZ ............. 26,658,245 36,772,068 871,089
Village at Riverside, Austin, TX ............. 11,468,130 13,822,063 115,021
Callaway House, College Station, TX .......... 19,943,017 24,928,907 355,285
Callaway Land, College Station, TX ........... -- 650,634 2,007
STUDENT HOUSING PROPERTIES
UNDER CONSTRUCTION AT
DECEMBER 31, 2003
University Village at Temple,
Philadelphia, PA ............................ 5,196,949 8,875,745 --
University Village at Fresno State,
Fresno, CA .................................. 8,279,762 7,737,628 --
Village at San Bernardino, San
Bernardino, CA .............................. 4,890,198 9,537,390 --
------------ ------------ ----------
Total ........................................ $275,523,414 $326,566,671 $6,399,243
============ ============ ==========

DATE OF
TOTAL ACCUMULATED CONSTRUCTION/
PROPERTY COSTS DEPRECIATION ACQUISITION
- -------- ----- ------------ -------------

FACILITIES SUBJECT TO LEASES
University Village, Prairie View, TX ......... $ 37,368,145 $ (9,092,154) 1996-1997
University College, Prairie View, TX ......... 23,366,292 (2,732,688) 2000, 2003
University Village, Laredo, TX ............... 5,889,125 (1,444,510) 1997
Cullen Oaks, Houston, TX ..................... 17,863,469 (1,504,327) 2001
Coyote Village, Weatherford, TX (Held
for sale at December 31, 2003) .............. 7,975,713 -- 2003
STUDENT HOUSING PROPERTIES
University Village at Boulder Creek,
Boulder, CO ................................. 16,174,498 (673,526) 2002
Village at Boulder Creek, Boulder, CO ........ 190,042 (16,470) 2002
River Club Apartments, Athens, GA ............ 23,664,067 (2,516,143) 1999
River Walk Townhomes, Athens, GA ............. 9,862,170 (1,053,327) 1999
Village at Alafaya, Orlando, FL .............. 26,005,430 (2,139,471) 2000
Village at Science Drive, Orlando, FL ........ 23,692,347 (1,100,952) 2001
Village at Blacksburg, Blacksburg, VA ........ 26,934,686 (2,023,741) 2000
Commons on Apache, Tempe, AZ ................. 10,312,093 (1,477,627) 1999
Village on University, Tempe, AZ ............. 37,643,157 (3,709,549) 1999
Village at Riverside, Austin, TX ............. 13,937,084 (999,555) 2000
Callaway House, College Station, TX .......... 25,284,192 (1,859,773) 2001
Callaway Land, College Station, TX ........... 652,641 (26,468) 2002
STUDENT HOUSING PROPERTIES
UNDER CONSTRUCTION AT
DECEMBER 31, 2003
University Village at Temple,
Philadelphia, PA ............................ 8,875,745 -- --
University Village at Fresno State,
Fresno, CA .................................. 7,737,628 -- --
Village at San Bernardino, San
Bernardino, CA .............................. 9,537,390 -- --
------------ -------------
Total ........................................ $332,965,914 $ (32,370,281)
============ =============

F-32

AMERICAN CAMPUS COMMUNITIES PREDECESSOR
NOTES TO COMBINED FINANCIAL STATEMENTS - (CONTINUED)

12. INVESTMENTS IN REAL ESTATE - (CONTINUED)

The following table reconciles the historical cost of the Predecessor's
investment in student housing properties from January 1, 2001 to December 31,
2003:

YEAR ENDED DECEMBER 31,
-----------------------------------------
2003 2002 2001
---------- --------- ---------

Balance, beginning of the year ....... $222,162,061 $200,885,736 $145,588,031
Additions ............................ 19,265,850 21,276,325 55,297,705
Deductions ........................... (924,741) -- --
------------ ------------ ------------
Balance, end of the year ............. $240,503,170 $222,162,061 $200,885,736
============ ============ ============

The following table reconciles the historical cost of the Predecessor's
investment in student housing properties subject to leases from January 1, 2001
to December 31, 2003:

YEAR ENDED DECEMBER 31,
------------------------------------------
2003 2002 2001
---------- --------- ---------

Balances, beginning of year ......... $80,699,456 $80,303,689 $65,678,405
Additions ........................... 3,787,575 436,793 14,625,284
Deductions .......................... -- (41,026) --
----------- ----------- -----------
Balance, end of year ................ $84,487,031 $80,699,456 $80,303,689
=========== =========== ===========

Depreciation on student housing properties is computed using a forty year life.
Depreciation on student housing properties subject to leases is computed over
the contractual term of the leases. Depreciable lives for furniture, fixtures
and equipment range from five to seven years.

The following table reconciles the accumulated depreciation of the
Predecessor's investment in student housing properties from January 1, 2001 to
December 31, 2003:

YEAR ENDED DECEMBER 31,
-----------------------------------------
2003 2002 2001
---------- --------- ---------

Balance, beginning of the year ..... $(11,930,467) $ (6,848,857) $(2,724,403)
Additions .......................... (5,666,135) (5,081,610) (4,124,454)
Deductions ......................... -- -- --
------------ ------------ -----------
Balance, end of the year ........... $(17,596,602) $(11,930,467) $(6,848,857)
============ ============ ============

The following table reconciles the accumulated depreciation of the
Predecessor's investment in student housing properties subject to leases from
January 1, 2001 to December 31, 2003:

YEAR ENDED DECEMBER 31,
-----------------------------------------
2003 2002 2001
---------- --------- ---------

Balances, beginning of year ......... $(11,503,128) $ (8,351,269) $(5,667,774)
Additions ........................... (3,270,551) (3,151,859) (2,683,495)
Deductions .......................... -- -- --
------------ ------------ -----------
Balance, end of year ................ $(14,773,679) $(11,503,128) $(8,351,269)
============ ============ ===========

F-33

AMERICAN CAMPUS COMMUNITIES PREDECESSOR
NOTES TO COMBINED FINANCIAL STATEMENTS - (CONTINUED )

13. QUARTERLY FINANCIAL INFORMATION -- UNAUDITED

2003
--------------------------------------------------------------------------
1ST QUARTER 2ND QUARTER 3RD QUARTER 4TH QUARTER TOTAL
----------- ----------- ----------- ----------- -----------

Total revenues ........................ $15,646,842 $14,082,818 $13,657,419 $16,534,394 $59,921,473
Operating expenses .................... 7,334,623 7,483,546 8,624,535 9,227,231 32,669,935
Nonoperating expenses ................. 6,952,980 6,960,583 6,941,321 7,356,692 28,211,576
Minority interest in (earnings) losses (11,832) (9,297) (3,862) 40,541 15,550
----------- ----------- ----------- ----------- -----------
Net income (loss) ..................... $ 1,347,407 $ (370,608) $(1,912,299) $ (8,988) $ (944,488)
=========== =========== =========== =========== ===========

2002
--------------------------------------------------------------------------
1ST QUARTER 2ND QUARTER 3RD QUARTER 4TH QUARTER TOTAL
----------- ----------- ----------- ----------- -----------

Total revenues ........................ $14,447,291 $12,651,948 $12,389,518 $15,868,633 $55,357,390
Operating expenses .................... 6,266,370 7,211,771 8,217,584 8,966,586 30,662,311
Nonoperating expenses ................. 8,032,330 6,001,786 6,479,019 6,351,580 26,864,715
Minority interest in (earnings) losses 22,204 23,667 (10,912) (4,770) 30,189
----------- ----------- ----------- ----------- -----------
Net income (loss) ..................... $ 170,795 $ (537,942) $(2,317,997) $ 545,697 $(2,139,447)
=========== =========== =========== =========== ===========

F-34

[Inside Back Cover]

[12 PICTURES OF STUDENTS]

[COMPANY LOGO]
THE STUDENT HOUSING COMPANY
WWW.STUDENTHOUSING.COM
- ----------------------

[PICTURE OF UNIVERSITY VILLAGE AT LAREDO]
UNIVERSITY VILLAGE
LAREDO, TEXAS

[PICTURE OF THE VILLAGE AT SCIENCE DRIVE]
THE VILLAGE AT SCIENCE DRIVE*
ORLANDO, FLORIDA

[PICTURE OF BEAR CREEK APARTMENTS AT WILLIAMS VILLAGE]
BEAR CREEK AT WILLIAMS VILLAGE*
BOULDER, COLORADO

[PICTURE OF UNIVERSITY VILLAGE AT TOWSON]
UNIVERSITY VILLAGE
TOWSON UNIVERSITY, TOWSON, MARYLAND

[PICTURE OF THE VILLAGE AT ALAFAYA CLUB]
THE VILLAGE AT ALAFAYA CLUB*, ORLANDO, FLORIDA

[PICTURE OF CULLEN OAKS]
CULLEN OAKS, HOUSTON, TEXAS*

[PICTURE OF THE VILLAGE AT BLACKSBURG]
THE VILLAGE AT BLACKSBURG*, BLACKSBURG, VIRGINIA

[PICTURE OF RIVER CLUB APARTMENTS]
RIVER CLUB APARTMENTS*, ATHENS, GEORGIA

[PICTURE OF THE CALLAWAY HOUSE]
THE CALLAWAY HOUSE*, TEXAS A&M, COLLEGE STATION, TEXAS

[PICTURE OF CARDINAL VILLAGE]
CARDINAL VILLAGE - LAMAR UNIVERSITY, BEAUMONT, TEXAS

[PICTURE OF THE VILLAGE ON UNIVERSITY]
THE VILLAGE ON UNIVERSITY*, TEMPE, ARIZONA

*OWNED BY AMERICAN CAMPUS COMMUNITIES

[COMPANY LOGO]
THE STUDENT HOUSING COMPANY
WWW.STUDENTHOUSING.COM
- ----------------------

805 LAS CIMAS PARKWAY, SUITE 400
AUSTIN, TX 78746
512-732-1000

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

[LOGO]

-----------------

PROSPECTUS
, 2004

-----------------

JOINT BOOK - RUNNING MANAGERS
CITIGROUP
DEUTSCHE BANK SECURITIES

-----------------

DEALER PROSPECTUS DELIVERY REQUIREMENT

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 31. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following table itemizes the expenses incurred by us in connection with the
issuance and registration of the securities being registered hereunder. All
amounts shown are estimates except the Securities and Exchange Commission
registration fee.

SEC Registration Fee .................................. $ 35,046
NYSE Listing Fee ......................................
Printing and Engraving Expenses .......................
Legal Fees and Expenses (other than Blue Sky) .........
Accounting Fees and Expenses ..........................
Blue Sky Fees and Expenses ............................
Federal and State Taxes ...............................
Title Insurance .......................................
Property Research and Consulting Fees .................
Media Consulting Fees .................................
Miscellaneous Consulting Fees .........................
Total ................................................. $ 4,000,000
===========

We will pay all of the costs identified above.

ITEM 32. SALES TO SPECIAL PARTIES.

None

ITEM 33. RECENT SALES OF UNREGISTERED SECURITIES.

None

ITEM 34. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Our Charter contains a provision permitted under Maryland Law requiring us to
eliminate each director's and officer's personal liability for monetary damages
to the maximum extent permitted under Maryland Law. Under current Maryland Law,
the directors and officers are liable to us or our stockholders for monetary
damages only for liability resulting either from acts of active and deliberate
dishonesty established by final judgment as material to the cause of action or
from the actual receipt of an improper benefit or profit in money, property or
services. In addition, to the maximum extent permitted under Maryland Law, our
Charter and bylaws require us to indemnify our directors and officers and pay
or reimburse reasonable expenses in advance of final disposition of a
proceeding if such director or officer is made a party to the proceeding by
reason of his or her service in that capacity. These rights are contract rights
fully enforceable by each beneficiary of those rights, and are in addition to,
and not exclusive of, any other right to indemnification. Furthermore, our
officers and directors are indemnified against specified liabilities by the
underwriters, and the underwriters are indemnified against certain liabilities
by us, under the purchase agreements relating to this Offering. See
"Underwriting."

We have entered into indemnification agreements with each of our executive
officers and directors whereby we indemnify such executive officers and
directors to the fullest extent permitted by Maryland Law against all expenses
and liabilities, subject to limited exceptions. These indemnification
agreements also provide that upon an application for indemnity by an executive
officer or director to a court of appropriate jurisdiction, such court may
order us to indemnify such executive officer or director.

In addition, our directors and officers are indemnified for specified
liabilities and expenses pursuant to the partnership agreement of American
Campus Communities Operating Partnership LP.

II-1

ITEM 35. TREATMENT OF PROCEEDS FROM STOCK BEING REGISTERED.

None

ITEM 36. FINANCIAL STATEMENTS AND EXHIBITS.

(A) Financial Statements. See Index to Consolidated Financial Statements and
the related notes thereto.

(B) Exhibits. The following exhibits are filed as part of, or incorporated by
reference into, this registration statement on Form S-11:

EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- ------------- ------------------------------------------------------------------------------------------

1.1* Form of Underwriting Agreement among American Campus Communities, Inc. and the
underwriters named therein.
3.1* Form of Certificate of Incorporation of American Campus Communities, Inc.
3.2* Form of Bylaws of American Campus Communities, Inc.
4.1* Form of Certificate for Common Stock of American Campus Communities, Inc.
5.1* Opinion of Willkie Farr & Gallagher LLP, with respect to the legality of the shares being
registered.
5.2* Opinion of Shaw Pittman, L.L.P., with respect to Maryland law.
8.1* Opinion of Willkie Farr & Gallagher LLP with respect to tax matters.
10.1* Form of Partnership Agreement of American Campus Communities Operating Partnership LP.
10.2* Form of 2004 Incentive Award Plan of American Campus Communities, Inc., American
Campus Communities Operating Partnership LP and American Campus Communities
Services, Inc.
10.3* Form of PIU Vesting Agreement
10.4* Form of Indemnification Agreement between American Campus Communities, Inc. and its
directors and officers.
10.5* Employment Agreement between American Campus Communities, Inc., American
Campus Communities Operating Partnership LP and William C. Bayless, dated as of .
10.6* Employment Agreement between American Campus Communities, Inc., American
Campus Communities Operating Partnership LP and Brian B. Nickel, dated as of .
10.7* Employment Agreement between American Campus Communities, Inc., American
Campus Communities Operating Partnership LP and Mark J. Hager, dated as of .
10.8* Form of Non-competition Agreement between American Campus Communities, Inc. and .
10.9* Form of Non-competition Agreement between American Campus Communities, Inc. and .
10.10* Form of Servicing Agreement between American Campus Communities Operating
Partnership LP and certain option and excluded properties.
10.11* Form of Revolving Credit Facility.
10.12* Contribution Agreement between American Campus Communities, Inc., American
Campus Communities Operating Partnership LP, American Campus Communities Services,
Inc. and the parties ascribed thereto, dated as of .
10.13* Contribution Agreement between Titan Investments II, LLC and American Campus
Communities, Inc. dated as of .
10.14* Construction Management Agreement, by and among American Campus Communities,
Inc., Reckson Strategic Ventures Partners, LLC and Reckson Asset Partners, LLC.
10.15* Option Agreement for the Dobie Center, by and among American Campus Communities,
Inc. and Reckson Strategic Ventures Partners, LLC.

II-2

EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- ------------- ----------------------------------------------------------------------------------------

10.16* Option Agreement for the Village at Riverside, by and among American Campus
Communities, Inc., Reckson Strategic Ventures Partners, LLC and Reckson Asset Partners,
LLC.
21.1* List of Subsidiaries of the Registrant.
23.1* Consent of Willkie Farr & Gallagher LLP (included in Exhibit 5.1).
23.2** Consent of Ernst & Young LLP.
23.3* Consent of Shaw Pittman, L.L.P.
23.4++ Consent of Rosen Consulting Group.
23.5++ Consent of Peterson's.
24.1++ Power of Attorney (included on the Signature Page).
99.1** Report of Rosen Consulting Group.
99.2++ Consent of Scott H. Rechler to be named as a proposed director.
99.3** Consent of R.D. Burck to be named as a proposed director and Chairman.
99.4** Consent of Cydney Donnell to be named as a proposed director.
99.5** Consent of G. Steven Dawson to be named as a proposed director.
99.6** Consent of Winston W. Walker to be named as a proposed director.
99.7** Consent of Edward Lowenthal to be named as a proposed director.
99.8* Resignation of Mark J. Hager from the Board of Directors (effective as of the
consummation date)

- ----------------
* To be filed by amendment.

** Filed herewith.

++ Previously filed.

ITEM 37. UNDERTAKINGS.

The undersigned registrant hereby undertakes that:

(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.

The undersigned registrant hereby further undertakes to provide to the
underwriter at the closing specified in the underwriting agreements,
certificates in such denominations and registered in such names as required by
the underwriter to permit prompt delivery to each purchaser.

Insofar as indemnification of liabilities arising under the Securities Act of
1933 may be permitted to our directors, officers and controlling persons
pursuant to the foregoing provisions, or otherwise, the Company has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than our payment of expenses incurred or paid by a
director, officer or controlling person of the Company in the successful
defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, we will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.

II-3

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant certifies that it has reasonable grounds to believe that the
registrant meets all of the requirements for filing on Form S-11 and has duly
caused this amendment to the registration statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of Austin, State of
Texas, on this 14th day of June, 2004.

AMERICAN CAMPUS COMMUNITIES, INC.

By: /s/ William C. Bayless, Jr.
---------------------------
William C. Bayless, Jr.
President and Chief Executive Officer

II-4

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints William C. Bayless, Jr. and Mark J. Hager, and each of
them, with full power to act without the other, such person's true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign this registration statement, and any and all amendments
thereto (including post-effective amendments), and to file the same, with
exhibits and schedules thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing necessary or desirable to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, as amended, this
Amendment to the Registration Statement has been signed by the following
persons in the capacities and on the dates indicated.

SIGNATURE TITLE DATE
- ------------------------------- --------------------------------- ---------------

/s/ William C. Bayless, Jr. President, Chief Executive April 23, 2004
- ------------------------- Officer and Director (Principal
William C. Bayless, Jr. Executive Officer)

/s/ Mark J. Hager Executive Vice President, Chief April 23, 2004
- ------------------------- Financial Officer and Director
Mark J. Hager (Principal Financial Officer and
Principal Accounting Officer)

/s/ Brian B. Nickel Executive Vice President, Chief April 23, 2004
- ------------------------- Investment Officer and Director
Brian B. Nickel

II-5

EXHIBIT INDEX

EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- ------------- ------------------------------------------------------------------------------------------------------

10.10* Form of Servicing Agreement between American Campus Communities Operating Partnership LP
and certain option and excluded properties.
10.11* Form of Revolving Credit Facility.
10.12* Contribution Agreement between American Campus Communities, Inc., American Campus
Communities Operating Partnership LP, American Campus Communities Services, Inc. and the
parties ascribed thereto, dated as of .
10.13* Contribution Agreement between Titan Investments II, LLC and American Campus Communities,
Inc. dated as of .
10.14* Construction Management Agreement, by and among American Campus Communities, Inc., Reckson
Strategic Ventures Partners, LLC and Reckson Asset Partners, LLC.
10.15* Option Agreement for the Dobie Center, by and among American Campus Communities, Inc. and
Reckson Strategic Ventures Partners, LLC.
10.16* Option Agreement for the Village at Riverside, by and among American Campus Communities, Inc.,
Reckson Strategic Ventures Partners, LLC and Reckson Asset Partners, LLC.
21.1* List of Subsidiaries of the Registrant.
23.1* Consent of Willkie Farr & Gallagher LLP (included in Exhibit 5.1).
23.2** Consent of Ernst & Young LLP.
23.3* Consent of Shaw Pittman, L.L.P.
23.4++ Consent of Rosen Consulting Group.
23.5++ Consent of Peterson's.
24.1++ Power of Attorney (included on the Signature Page).
99.1** Report of Rosen Consulting Group.
99.2++ Consent of Scott H. Rechler to be named as a proposed director.
99.3** Consent of R.D. Burck to be named as a proposed director and Chairman.
99.4** Consent of Cydney Donnell to be named as a proposed director.
99.5** Consent of G. Steven Dawson to be named as a proposed director.
99.6** Consent of Winston W. Walker to be named as a proposed director.
99.7** Consent of Edward Lowenthal to be named as a proposed director.
99.8* Resignation of Mark J. Hager from the Board of Directors (effective as of the consummation date)

* To be filed by amendment.
** Filed herewith.
++ Previously filed.