ACC - Earnings call transcript Q4 2017 | American Campus Communities Inc

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Operator

Good morning, and welcome to the American Campus Communities 2017 Fourth Quarter Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. At this time, I'd like to turn the conference over to Ryan Dennison. Please go ahead.

Ryan Dennison

Thank you. you and the year thank XXXX Campus and quarter fourth end morning for American joining Communities Good conference call. is widest release access press furnished X-K Form The to to the possible audience. on provide those the Company accordance the measures measures In the directly G has GAAP requirements. release, comparable Reg non-GAAP reconciled financial to with in package. an release Company which includes package the on Investor and posted materials supplemental in the Relations the earnings press section Also website you a financial will find both, call which one We're can live hosting for today's the for a the on available with month. you website webcast access replay

you Our disclosure would are making may be supplemental same. like the the in within Exchange XXA Private that historical and in Reform Management following during analyst XXXX, package, be package be not and Litigation slides made of will and Act the and of Management forward-looking our may deemed Section amended by conference as press in XXXX. meaning release, statements facilitate of Securities are Act which webcast XXXX Webcast SEC financial to XXE the the filings. this call, along. certain of the one to Securities statements Securities supplemental presentation today advanced as and forward-looking Act of you statements by facts inform the of in Section the referenced

Investment expectations obligation are uncertainties. The based Although with actual expectations the release and Company's Company the can could assurance Company assumptions, may cause time results of Company reflect release. periodic reasonable SEC. on now Senior actual are filings Having to vary. introduce are circumstances date said Beese, and to Perry, and undertakes in Factors materially events to be members that, update Chief Accounting any statements after Bill press Talbot, William call Jennifer expectations Bayless, results the Officer. like that Officer; in they President; for call. remarks. to advise our Operating Financial Officer; no us will and or reflected from or statement Hopke, opening believes the the turn his the and differ Bill? to that risks detailed the the The Officer; I'd the Executive from to that, forward-looking provide Chief time Daniel over Bill I'll forward-looking to risks Officer; Management Jim any achieved subject economic joining for Kim in its of this Voss, Chief With Chief no Chief

Bill Bayless

discuss full Ryan. results. Good Thank and we year all quarter fourth you as financial morning you, and XXXX and joining our thank operating us for

As you saw in last had night's the a strong to release, we end year.

our consecutive to exceeded As offered and like QX property expectations operating the in delivering growth for discuss, A I'd testament flows growth prudent slightly results and income. investment. current beating rate, our cash XXth fundamentals year a the by of quarter net the full stability Jim team of the our year. $X.XX same-store rental and for housing Campus rental student by revenue to in operating streets the both, will resulting American consensus thank

these with global distance now valuations. market discuss, walking increasing fundamentals interest rates continue foster range. assets the X% and of to to to rate institutional Cap and in cash strong mid from universities, continue and private to within drive major will William to stabilities compress, As cap volume transaction continue located trading core particularly record investors flow regard Tier-X

via the conditions. the it William then opportunities turn over from provide market highest market discuss portfolio focused valuations. capital our being that, get review started. value them year-end Giving risk-adjusted harvesting market and/or from ventures funding current However, pursue like significant aforementioned current results to our private is between XXXX strategic to an on our recycling most stock to joint us recycling Daniel streets, on the our through return two the significantly selectively currently disconnect valuation update assets and core the dislocated we existing valuation will and strategic initiatives financial intend public applied With capitalizing quarter-end capital Jim guidance will I'll assumptions. of to also our private underlying the and dispositions, activities. on the only

Jim Hopke

NOI Bill. growth quarter the year marking of achieved pleased report year our and IPO in since to revenue Thanks, again XXXX. fourth rental year full results, in our rates, We're consecutive same-store now internal both, growth XXth rental and XXXX and every

on expenses a the X.X% and increase quarterly supplemental, X.X%. G&A, property a control year targeted of in generating by on operations primarily [ph] Page delivered payroll, reductions of solid and seen SX RnM the The almost to controllable As the expense operating and in of decrease X.X% revenue, finish in expenses same-store X%, NOI team increased categories. out

largely asset category Additionally, this to reduce by while initiatives utilities help are non-controllable, broad management X.X%.

revenue the NOI increase and a a X.X% X.X% in full same in For on XXXX, year expenses. increase increased -store X.X%

with been our hurricane growth directly only would associated X%. Excluding X.X% have have repairs, would growth NOI and expenses expense been

range. approximately XXXX approximately We of stated full in in at since initial NOI coming our that in year results report equivalent XX% X year are margin $XXX goal is pleased operating of expansion three value. and $XX excess our NOI also of margin to million a achieved XXXX to the X our This to portfolio million XX.X% level year in

pursue further to management and operating initiatives continue drive that will create asset efficiencies leverage. We additional

for our XX Overall, XX spread in represent a supply; XX% XX being versus ACC's long-term the of located to portfolio, X.X% Turning beds new slightly X.X% new XX,XXX approximately of projecting average. well of we're enrollment the are across markets. our markets. over reduction deliveries The owned below new XXXX

also and based growth. markets we into which occupancy significant rental significant years; revenue of projecting activity where on for have a growth we presence are X.X% combination portfolio-wide a Austin, the XXXX-XX up lease We monitor experienced to same-store supply account X.X% continue recent have rental College new Taking in specifically. closely three of rate and Station to-date, leasing Tallahassee, to

XXXX growth X.X%. to X.X% projecting growth of of we're X.X%, full growth NOI same-store to X.X% X.X% year outlook; Turning on of based to and revenue X.X% to our expense

RnM growth revenue the always, of aggressive expense XXXX expectations impacted outcome several our execution and with up, summer out residential to backfilling relatively with taxes G&A approximately same-store benefits are at very our of result negatively categories projections flat, projected projections. two X%. NOI coming are a and low REITs, expected claim growth revenue asset of the high our a up. largely management be practices lease overall for our Growth lower insurers reflect which of short-term guidance growth growth other in quarters levels marketing increase is by risk areas of lease to at leases, other As property off initiatives Consistent respectively in markets fall and in X% is of to expected of [ph], projected in our of income leasing in ends initiatives, due reflect and insurance continued coming fall's XXXX and payroll, elevated year growth two these XX% in last approximately However, first XXXX. assessment our

the our our to to We the year as lease QX progress updating now activity. year. discuss over We through I forward William up call look reflecting in XXXX-XX the reaccelerate market will turn to to expect investment assumptions. we NOI growth academic

William Talbot

Thanks, Jim.

continue the when for student the and year of of highest annual highest of transaction assets strong with recapitalization billion sector CCG compress. continues Turning demand the vibrant to cap and level investment during transactions in first $X.X be our representing to According volume student XXXX overview, overall another over of for in for Streets housing; to transaction experienced excluding year, housing traded Corporate to product rates market the XXXX. second Harrison CBRE

non-pedestrian cap between For causing rates cap basis over to double XXXX, pedestrian the relatively spread been to multi-family. basis assets versus CBRE XX rates. Cap an rates pedestrian rate in to and compress, non-pedestrian continued spreads non-pedestrian student additional has stable for point only asset cap X points, the spread largest the XX almost compressed have overall assets have to remained points while an housing tracking for pedestrian

mid either sector continue X% investors housing institutional row. at the student a student long be investment achieving and for and value their international, participants anticipated university and for of capital widely mile, with student continue that strong. the investor major housing are assets, trading campus range. cap recycling cap reflected consists the below consisting entirely consistently rates to desire distance with survey, campus market. continues valuations valuations. in is cash at of remain should investment facilitating that to the annual of core private the in a increase assets It will pedestrian in activities. that According five the Buyer a of private XXXX student on over to in The now X/XX levels on in to assets housing pricing strong the exposure has transaction appetite have XXXX. stability major to almost in of XX% Overall, portfolio pedestrian of almost of that investor While markets core of rate fund CBRE's and strong year our median to assets fundamentals flows investment execution housing demand produce half a portfolio volume located universities or runway in from consistent X% all power ACC's of remain profile of second market to

groups, of provided the to in to highly ventures; announce in the strategic of have core in for mid minority we'll the the with offers fund documents process that the and expected the a an non-binding X% creative made of we market of rates that joint consistent at existing With quarter valuation in cap achieved market mentioned due The and investment on development rates regards the in time. our final numerous quarter's recycling; high to in to our to on and order progress global quality interest pipeline. capital negotiation pleased portfolio and for pedestrian selling expect we assets. Turning are dispositions private call economic initiatives ventures XXXX, core to assets previously close second sheet term with after is update range explore is similar in-line cap range the the partnership of significant subject competitive on diligence, provide with we last venture we to we and stage JV our received joint leading negotiation are our by a

Moving the profile transactions California the on in project to have their of California the is the we're housing The activities; will high over on-campus Riverside beds. first largest campus. on development expected to selected be and exceeding been pleased in been an $X to in several camp industry-leading of of as third-party the in years having year. build awarded of XXXX of beds X,XXX part next expected history construction award our phases QX manage including and with This this University PX anticipated University project by X to completed XXX-bed be over nation's housing on-campus multiple phase start to billion initiative

is second consists also The ground currently in which of expected development XXXX phase beds. approximately X,XXX early to is in break

expect in in $X additional phase. fees phase and earn the We million on on second to the first $X.X million fees

will joint communities. university with conjunction services of in We the both these management provide for

are beds we In to addition, feasibility the manage earning fees, campus partnerships million State scope, identify for the on to of full project PX goals for change. have been quarter XXXX. of total a of periods are yet announce the both and schools not in help fall subject the universities community efficient project to The to anticipate opportunities The attain We continue we'll into fees completion. and pleased construction development of in public robust on awarded and significant are possible. colleges expected XXXX, we'll as and University. the XXX the the third-party XXXX Heading $X.X we awards and manner deliver to finalized Delaware for commence is related private in the a second upon to housing advantages most remain new their

either core own major student to pedestrian we in on-campus universities. to continue to assets housing of pipeline development located Turning quality now Tier-X or our development; make progress

strategy allocation and owned cost taking pre-sale capital in solely discussed on consideration of our previous current opportunities. is focused calls, into our capital As development current equity

We million are our on construction under which making development totals XXXX $XXX pipeline costs. XX and projects, beds, and progress in great X,XXX

beds, the our addition, features the two diversifying our For added pre-sale With primarily by stadiums and the for delivery X additional X.X% all and the further development center will development in XXXX owned pedestrian now $XXX X bedroom in are or Florida and a XXXX X total the in universities to and either configurations and more X,XXX Tier-X product million developer on-campus discuss communities' quarter pedestrian development yields the our constructed I'll point X% State reflecting pre-sale appropriately are XXX pre-sale located Daniel major located price to phase our be year. turn million X% now targeting and Florida out developments risk cost; development bed project this and of to an lower offerings The affordable the between XXXX, projects, University. located of these to and stadium the developments unit financial to yields State. it for results between transactions. original of X.XX%, $XX.X inter blocks we over

Daniel Perry

Thanks, William.

quarter we XX.X% the representing $XX.X increase earnings For in of per million the reported share or total XXXX $X.XX a XXXX. share of fourth win fully FFO over per fourth quarter diluted

FFO diluted new fully share the primarily XXXX. the $XXX.X full the expense the was the same-store also operating compared assumed fourth share both, the end fourth The final million X.X% Both revised our targeted last guidance of higher discussed. want win decreases in occupancy to than of year for in expected are improvements worth as other also giving midpoint by quarter for our and years. of outperformance million expenses We of the the income, season, actually expenses. year noting guidance and $XXX.X to expenses three year NOI per we $X.XX in not as and our reduction growth finished the due results as controllable the leasing same-store flat at in expectations, same-store our compared only per but slow the $X.XX operating than X.X% when to that following It's reported full XXXX both, operating over share in the above in guidance Board FFO targeted slight and than quarter for We in or XXXX. expected fourth growth per of revised initial results driven of same and management as better profile beginning or the well that quarter better operating better acknowledge cognizant our of revenue the in than reductions year and store were to last Jim expenses quarter Directors operating

we However, we the have our our believe portfolio, period significantly of platform, improved operating during sheet. this and quality balance our

rating And the $X.X business and significant development We financial have premium of to NAV approximately average and an sold over from S&P. next-gen raised range assets, non-core our human over lowering X prompting billion equity Moody's capital to and into our X.X%, and billion leverage our an invested in systems of increase mid-XX% at both, the credit ongoing in intelligence the mid-XX% platform. range from in

developed student billion years housing high X $X selectively these property. over we've pedestrian of acquired During also quality core and

ultimately our delayed doubled that approach differences strategic and in have earnings our a While that last of timing few XXXX races in and more rate the positioning create believe years, of in to by long-term capital deployment share per our delivered up our growth the compounded capital earnings value the consistent lease in XXXX in that dispositions return to IPO preserve we of expectations will compound a the Company shareholders, and in X.X%. our annual is for growth earnings result XXXX from growth and with the through we

EBITDA was value December debt total to debt X.Xx. XX.X%, Moving was was run the of as Company's to XX, XX% to asset value enterprise debt net the capital to XXXX structure, and rate

back we EBITDA anticipated asset XX% and With to Xx. down the the net that to quarter in debt joint to bring of to debt venture below able be to below transaction second close expected time XXXX, value

debt the debt through at mid-teens of rate repayment to expected floating stands the debt the from be rate floating outstanding total to XX% which is proceeds the reduced also transaction. Our with of currently

of our Finally, XXXX turning our FFOM guidance XXXX to $X.XX range provided outlook; we to initial our in earnings $X.XX. release for

the X.X% XXXX X.X% by as to to operating NOI turn to each are driven same-store SXX growth increase complete is property of the revenue supplemental the X.X% X.X% can to earnings to assumptions expected of to guidance on and You our expense SXX Pages X.X% but and X.X% get components details of growth. follows; major

As Jim insurance in municipalities many to operating properties, as our obviously hurricane as of XXXX. mentioned, cap as student is rates use expense increases in lower housing growth much property to taxes increases expense, assessing values expected due in in well same-store to due for continue difficult the very property season

date a spaces which With the share to XXXX reflects on those $XX.X million the to there million XXXX, buyout partner venture anticipated core added joint joint closing joint we portfolio end quarter. beginning the no be second the FFO joint venture guidance have and on transaction $X.X approximately assume the to portfolio. from page is of of in venture detail We XXXX on structure a the the venture the estimated phase leverage this assuming ranging line will be to from placed new currently that

Third-party $XX.X in $XX.X decline million fee the in in small from a million of is representing recognized income guidance XXXX. included million to the range $XX.X

I'll the the ongoing With the start loan of the throughout the to we quarter operator that, of question-and-answer used $XXX in to a it to to loan third-party use a mortgage year best for term acquisition expense pay-off XXXX this XXXX, used in us finally, record development year. as back into midpoint fund earned $XXX would The bond we fourth second secured revolver fees the transaction to of assumes awards portion the proceeds a joint pipeline call. maturities pipeline out the in turn on and our full expected we term the year complete represent XXXX record million development was the And to the fund continue and third-party million from offering our portfolio balance to and to core close interest that anticipated venture year. range the have spaces

Operator

Instructions] first our [Operator Nick Citi. from Joseph question And with comes

Nick Joseph

your assets be particularly recognize expected for if what on an many negotiations, be to color JV ACC's will looking provide, the store in be are that ACE but included included, then I can additional ownership and will just JV? deal any how the you there

William Talbot

assets at existing six [ph]. about portfolio We're looking not campus off ACE

We are XX%. position it get but would want minority currently to be into under in negotiations so necessarily don't a details

Bill Bayless

would joint be control of maintain venture XX%. partner The we'll minority,

Nick Joseph

from expect terms Do it margin And trailing then, the portfolio; over expansion is there just to the Is that the continue on NOI a operating little further you opportunity? of looks XX months in a like XX%. here?

Bill Bayless

the asset management in in also are who up you there us. terms in across going inherently the table, many the estate part, the initiative, Hopke to for cases a for have real transaction like opportunity. so that in a in leads exempt look going very fact opportunity more exist the in Nick, Obviously, does are H-transactions, we're I'm But forward used more that we Jim the early going as typically bit in that I think natural target little have say do taxes, of utilities that also also I additional or is pick we example, initiatives consumer that As upside overall we hitting pleased other that structures regard. believe in little from see purchasing

year there. the year terms increases given Of make about in heard is improve the we're of will a him Jim this to course increases the he of battling talked this talk hard about you what dynamics in bit that insurance little which taxes

Nick Joseph

What's the in same-store mentioned on up. growth lease December first same-store quarter impact half on based year quarter revenue? you the of second lower expected Finally, these the the leases on first the and a of

Daniel Perry

over range in the XX XX what It's about that we've last seen which XX to is typically of years, bps. couple bps

basically but being the -- hall, December by that of in now as the with that it the when spring approach much semester. properties fall-off. majority tend from a and them you as coming the modern being spring in move the is semester regards semester in from with they with to the backfill And previous this ending and for to portion freshman, is to been for that all the move or all student of more out these a that's residence range. to to some internships, to possible But University's from of leases in you Also driven in-line of what bigger kids the all, that from let XX a with co-ops fall the on-campus to XX consistent of co-op to of leases fall the we pretty lot try residents leases have their leave back which bps semester as students day where portfolio do that being are the is

Operator

of Merrill Lynch. comes next Sanabria with Our from Bank Juan America question

Juan Sanabria

year could Just if talk to traditional targets And XXXX-XX the development you the not with going your occupancy about experience for kind expect you for I forward? to in regards of because kind and XX-plus missed year, deliveries going any of initial those your year school guidance your think last given your assume assuming what itself pipeline does of are repeats just haircut that initial kind projects. last yield you new or

Bill Bayless

service in to projecting the assets at in campus; include the on XX in regard core, collectively XXXX and above. XX% we those that development, stabilize William development the pre-sales, are which ACE mentioned X will X projects or With off-campus assets X then that of coming fall X new

minimum of in target quarter. the And X we our meet expect on those deals to so

Juan Sanabria

the is you're statistics update year; And I provide? you seeing that I drove total pre-leasing saw the can guess to upcoming data for And you that? you on next expectations what some that bumped revenue us of your used school in any that give

Bill Bayless

Yes, give a and accurately you than you as reflected. going not other of course, we're update to velocity

growth of leasing analysis will in from done to XX we're the we're talked behind Champaign that the look -- look terms about of when associated comment running X.X% I now, in components that we [ph] at look renewal Also, already guidance store activity then the at ahead year properties; well have, last we when are revenue is indications which us season course is going the at is same-store behind first a through new by that we development but getting new not do the starts you If property property largely with process, rental X.X%, up growth lease at the Lambs XXXX-XX that to ground-up of our there [ph]. year three monitor, in markets we the need we trending last comfortable. that XX%, RIIT to and are new got portfolio closely places carefully were also to looking you look the year last which excellent and and we're in we at those we you that the mitigate of where and only and watching see feeling Lubbock, feeling

the represented occupancy. ground-up, our rental you X.X% from the from to rate So see of growth perspective revenue in X.X% that combination and

Juan Sanabria

Just about one question slip the follow-up Nick's to post-December.

So the X% are to a saying of final point XX in typical basis you that you revenue that I finished to XX XXXX-XX, slips relative XX kind about that occupancy X.X% slippage? dip to think with growth;

Bill Bayless

correct. that's Yes,

William Talbot

attrition the we transactions those that we program traditionally love, products a the the we've ACE has I down for does fall is When surprise highest of you all said, part flows a also that 'XX Daniel of housing how have halls and explanation it's most and evolved transactions those incoming risk-adjusted the something of residence was the they greatest cash The as over you in this want on-campus is particular of replacements largely investments operate before model address halls; look I Daniel entering XXXXs level those how the represents drill at house of one years, been bit the from to on-campus housing and we about university and think the to related that first-time residence that it's spring, me and on equity since drill XXXXs talking little day which make. because underwrite that down, can when of you important. stability talked freshman let lowest it's transactions and and group from it's the positive to about all love one.

type shape assets operates. residence a which any off-campus first-year that in variance negativity so housing what up of how an of reality whether performance on-campus ended the There that And of itself is or escalating are. is perform, no-way the also those you're of scale in terms on based hall the and as an asset

premier when like no XX.X% example, area; spring. when institutions the Callaway traditional residence a So our halls, residence into we you that in because hall it's year University beds, of those well the University XX.X% designated a honors high deals right do demand, halls to fall on and life fall-off of But that's that's you and Texas, small those for prepared you of number this behave ASU and of [ph], the very the in attrition, backfill. had deals, occupancy it's they we no basis on-campus underwrite is which points that at from the that's to colleges XXX-bed year get look colleges; take we're now, love typically it honors fall, see example, this by Also, entering off-campus you it's for spring, you the it's normal have doing for look Manzi in and those hall how a House House was have most at in XXX how -- see that you Toker at students Barrett consistently academically for from are residence us college, and in program, so you when look to for XXX fall very fall-off cycle. at how look college, population honors we you NAU also -- to traditional and and honors easy Barrett one residence housing Arizona, it's little

just is necessarily how those negative, a not characteristic is something flow. it cash of So, that's that a

[ph]; U.C. the and in to for where deal that administering aspects have to process wrestle that of periods. We also program them take master example, the a they Rezlight do first-year State do those don't guarantee lease through the it of performance in look the step-in all [ph] a lot we all a hurdles so announced, if of a XX% themselves, leases to When couple but of of Arizona Berkeley the control they that protect them we at of things is we that those ourselves; floor a hit agreement in got we University wanted assignment you can over. that we have ground

And it's negative, just type not so, normal and in the again it's part of operating necessarily a the of system a it's that product. the ordinary cash and flows flow way

Operator

with comes Our Corak from next FBR. question B.Riley David

David Corak

aggregate 'XX supply I share it's a you it with bed bit growth to for range school enrollment of but and the down looks the Can gave as differently. actual of deliveries? XXXX-XX supply, appreciate middle last year; the the it delivery, wanted of how three-year and you compare the maybe kind to 'XX like expected lower maybe a approach commentary And percentage of us 'XX slightly previously, that year? in does for portfolio actual is your little

Bill Bayless

When XX data 'XX. we let's so operating markets we're each to of years that currently the those talk at to take about XX and projecting and 'XX, one from look that forward they're

look which 'XX 'XX, you at first X.XX% beds of had year; was by to we XX,XXX in If XXXX enrollment.

beds look you exceeded was portfolio of year, the if Now in. it actually that the number growth at coming same the in enrollment XX,XXX, across

or and at growth look it enrollment -- was XX,XXX, X.XX% X.X%. you 'XX, was If X.X%, was XX,XXX

the X.X%, those we're actually entered which had the XX,XXX looking beds going the years a supply X,XXX. because in so them, months with look of demand forward, you roll a to When X.XX%; demand So past in in usually increase those growth enrollment which at when takes numbers the you is years. right of 'XX back delayed couple assemble in-line projecting last actually had an you getting it falls you that together, two of university

a the total Now, and place demand the story beds talk of and campus this believe in where equation, out only supply XX% about is that of new is decade of supply it we the and to the to story though, one don't XX% last is. when the being real taking supply off-campus point that's modernization has still the never what we for always like being housing been years pedestrian we now next only is next thing XX and

cap has you modernization XX years. been on you've of to at of growth X.X% seen X.X% percent really there last to we the that Austin a up place, years, come been because the trend when thousands see always Austin over time as as year for enrollment supply we XX to about continue so, like a look to in enrollment tens entire and which of so consistent again, the XX has And in talk no speaks of enrollment a to and beds that --

have theme but offset even nominal in that had growth that we so enrollment see seen been X%, We where of the have not by enrollment you continuing. modernization markets it's growth, about

you barriers haven't we significant see numbers in have space And see in, so seen interest coming the even to entry, supply continue those moderate we investment the continue to you and numbers though ultimate to because good and those towns new the natural new groups new or college not come it's limiter to able barriers those these entry because are supply but up, the interested exist in it's being that to that on in in. supply pick

David Corak

Do kind of still up enrollment same a that gotten enrollment last data lease of specifically the to share the to [indiscernible]. X the it last last student X international was as turning data not some did I but together small sized from then drive you we enrollment you've relates sample year? were And pieces or such more kind weeks groups, the international there of assume students; that time

Bill Bayless

No, it did not.

our is firm up XX international markets numbers of We X.X%. enrollment the have and in of XX it

so continues of system and X% resident Fair thing Security three is Housing. look an it's that a the so can't is our buy last; from not of consistent RIIT across a really [ph] it we only origin and to and the were, not and and be this we year when about our Levick, we was you driver base the Social track country indicator nationality, by we to system where of Champaign is it again in the not was indicator look that student at that markets we which of The international an something talk, have shortfall think in portfolio. do an which don't one number or was the at when not do And residence when issues

Operator

Austin from Wurschmidt Capital comes Markets. question KeyBanc next Our with

Austin Wurschmidt

just the several if us wondering update little give what could backlog And deals? awards; stacks on-campus for on like an years? bit the was then, a versus you about that up on-campus just I competition looks talk how for the last

Bill Bayless

the very companies see public were as A, the EDR being partners some been would strong hopper pipeline We to entrant continue transactions Street Capstone, decades. number stability has public real The consistent, of continue X X transparency that you up we also deals success over we them plus X long we do given rival a a of the you so we last on-campus in provide. and tracked has only two time to on-campus them had with with the have see are had in the that heard and transactions, the pretty good do is, in new very year It's third-party; and who well and of that that long-term provide our pleased, seen the in awards we've XX still two that being won year, they arena their last a yesterday being X you've the battled that in work. for partnered with one mention Capstone Harrison really

barriers [ph] the entry characters. experience so picking that get of of the from entry though long developers to game that of very into a that benefiting much see expertise, continues to partners operator, them same would capital that and the which significant the we these partnered number and to that that capital with a operator there cast that is space HarStreet so be continue is is for the and the the specialized pretty in to long-term have of been for and was more and credibility that's truly And credibility for even into decades are time the love universities colleges up developer looking small

Austin Wurschmidt

kind [ph], be mandate won So you particular? to is looking you're to? that the attrition think those guess is it of where would -- temp in what that increased universities at that in I And go deals seeing and assets them it you that

Bill Bayless

And invest cases do many where terms we -- of we of we investment. as equity time and in analysis the in of our an selective we on-campus very an We're off-campus go the type deals ACE through most lose deal that in same the that we only the won year couple we their because folks not invest investment willing to our a on and won as were lost it to that a did they were and criteria. based this equity, propose we deal third-party do willing where equity

that have you to We that and so as people may us terms do model real regard ground all make of to other true have things lease, things. times at to the in also hold works that for have terms that that we estate; length valued a willing we of buyout in provisions, the other be

we've continuous of universities, Carl work all we to two tend positioned best-in-class are you're Now the well; -- in seen they the that that we best-in-class I appropriately feels awards the like the University the Berkeley's, like think ACE; the continue do and said their folks certainly I to both we very too think that that companies Randy that we EDR announced arena. Princeton, feel last well and well with XX yesterday the Arizona fair do do think so win State months to seeing Arizona's, I what want share, in you've that when -- are company, to the

Austin Wurschmidt

other system? third-party lines, what us is running along deals for guess potentially can outstanding on the then in are any the with ACC system ACE And the today? And you I or mandates just update from U.C. give an the U.C. same future

Jamie Wilhelm

Cal them the system, looking continue housing development to their needs. there U.C. are prepared of private to several of at U.C. we both on nothing but at PX very as both, a look details -- that Yes, different are the the to as the are give with system, positioned certainly market and pending, we're system, well assist we the believe procurements today well State them that lot we're to that track sector closely to

Austin Wurschmidt

Any be the any for would what mandates at sense future those? either soonest of announcement

Jamie Wilhelm

that of we We and pending specific really continue don't there really take comprehensive -- on we a I through on we is predict very have. really degree don't their can and certainty compete, comment time to that their to process, universities putting know schedule; qualifications any a have deliberate that on

Operator

Baird. question W. Robert Next from Babin with comes Drew

Drew Babin

be flattish for with at obviously fees; expecting we next increase of Should end go. 'XX 'XX good end and awards I'm fees or expense to couple business or corresponding just a pretty we the cost growth think times number as of that far maybe as the of Question model an sort that should years? on and third-party of inflationary of the as will development

Daniel Perry

business lot that obviously fee the our a is by deals are that here as business; third-party as reality they infrastructure both, or business pursues or third-party of the same fee third-party of ACE The expenses transactions as to that the those and related to ACE us get fee one awarded driven third-party well a lot and deals. either are corporate as

platform, we about item that see the overall expect should money little just third-party expense continuing business would that you as with G&A remarks, our you that's next-gen inflationary which prepared as -- to in overall we're tends money well relatively the in as adding on systems, a our in on our so intelligence like the -- than business it line follow And grow expense make spending in-line growth scalable company now spending see talked to bit to just more things right but line to to and long-term, I well growth. our this been G&A as do

Drew Babin

based As this cause you from guidance to pre-leasing ultimately than turnover to out the pool. model things is what might occur looking different it at X.X% that some the something on guess look pre-leasing XXXX the same-store in same-store pool kind 'XX the become acquisitions maybe January other your entering I that us to of to X.X%, might year development, natural same-store? either guidance that in XX, ranging from direction for

Bill Bayless

was grouping store again on that there that that well XX.X%, there in you did When that that is the that and upside look comments significant my leasing and into were XXXX there. properties roll mention at the portfolio was going new I

provide that a so and they further should regard positive in a only negative. And not

Drew Babin

sort are Then portfolio next one point Austin, things and much many how the go new already Station Tallahassee, there supply? you similar where bout a standpoint, [ph] decent being in a just is amount the markets home much pretty guess at for pre-leasing to in your good assets from especially one, across mentioned pretty of Callaway where already academic that like when I are this year; Bill last of pre-leased College

Bill Bayless

why rate. be My anymore give a don't every be answer property concert lot time table want because on to forward to we leasing that left question is with don't regard to in this we that with would we of the money portfolio means first the updates it in

don't but markets success earlier do like and you're is earlier coming comment to to we as we in that diminishment things as want And so properties strategically measure fill where early as as can we in we supply. full very appropriate think your a of and new whole being because

we feel that would And a so to systems so the decision asset-by-asset we in but sorry, to that maximize part I exact is is market-by-market when of and make -- the an give regard answer asset-by-assets, rating and combination on our that occupancy. make based that of can't you strategic of decisions to revenue market-by-market like use the

Operator

[Operator Goldfarb Sandler from with O'Neill. Instructions] Alexander comes question Our next

Alexander Goldfarb

exclusivity have future this of over partner will JV's? there a or JV is JV, some row that the [ph] or on dispositions First, sort

Bill Bayless

make William we certainly the when the done. will so formal that negotiation we and documents are aware said, of and the on comment final is beginnings transaction any but the won't in As of market provisions

Alexander Goldfarb

hesitant from experienced. some of of players, developments soaps more for you leasing assuming private you because developments in have XX% just some heard that also -- to the plus, other is Bill, think still and everything that one There you students you've comments do is of the your are yield. and that said delays -- basically, been you're or guys the day that I of some the mentioned X.X underwrite [ph] XX%

issues occurred one over may the the and development balance XXX% going guys delivered, years the basically you up of to have some day overcome who that in no issues? you're of be challenges do your to hesitant how So that of that or students be -- confident lease are so still running, because projects new

Bill Bayless

will year stabilize were comments XX% that leasing properties do believe that and My this the of that we to we're XX group specifically collectively above.

first one when ACE, those are building who students it Let me the on-campus are in bringing is not One, high are that down such development school, market question the in in into especially categories. University. and answer by benefits being we year residence of we're still of the as are the hall that assigned leasing

and risk which And because that have lot assignment you on issue hall of again perception ACE mitigates so residence of zero up of year. -- the risk how X leasing of a so products there. and make the virtually in a on-campus those this the the Of the transactions broader that XX right work, portfolio

and really been Alex, product a been we As misses, had assets really to it in overcome assets I'll though the issue, to market was there risk gangbusters have that the has felt to have other some the go the not going and and year burnt, exception. or weren't say construction Last to in that no that it -- the able there market reputational it. case even you demonstrating we that where we market second was a we bad [ph] was Baylor to relates one you market-by-market say, issue. had year mentioned

what how mitigate and Now attempt things. a to is we we do it couple of

be that it getting to in it model if It's near but so and that concerns and of the regard. take center thing in the students was typically that thing an that showing and what where open community that we center we was Clemson, get you town mentioned that completely it, Oxford and construction we done actually first missing there that also; we and your pay had knew of a space, in concern do and do to openings The and tell that type to -- so community that last we in to have can't any to that have and demonstrate offered confidence more where absolutely year did we the going harder have two have the the we're our construction community so can have not the be you never a in we our on example we're center; model, chance going have if the depends it, ready, where you're rise they touch that. everything it in one that was it terms on full clubhouse overcome you can get weeks so it, regard high the competitor whatsoever had a and individual a opening, leasing opening strategic for to in because that little a we'd we marketing to to front feel you in done property, the CEO model we do actually a construction we one in no of it's we're -- is a $X,XXX are building of they for see make sequencing new model guarantee Mississippi, next the completely knew little

stabilizing going X-year to the transaction look two or elimination and at should that And all love about in year a we that year ACE it's believe type the reason you what's implement; is completely that take so the we deal way times type a over stabilize things look and those are one, that on-campus you year even typically, the -- are we of hold. of may it risk there environment but of that a that if things more in versus IRR do bps that to of we on look going we're we're the if to it's it a impact another will at at XX two than why look underwrite you

so X.X. investment it to you that so you way X, a that's how your and XX going underwrite making think what's a your become we way, happen, may about. But if know, become And X.X may know that decision and

Alexander Goldfarb

Daniel, X like is over years; shift acceleration. mentioned and the I sounded the in slow growth FFO past and management the aware that should that's board it comments think we to think you in your the of about going

future does is? you way as just you you gross that assets how to or don't back would many perspective. dial dilute maybe this are about So just And have sell could given to you development, stock that where thinking especially bit where that mean if so the stock current a accelerating provide trades; more the given then,

Bill Bayless

of want in the we terms take let give because be and Alex, me that certainly, statements. bit do part of context to little a reflective historical of those first

want were future look where very very you well that real in the competitive share that be our at the saw and needed, and company and said strategically grew the they go we strategic where then expense you done you the think more Directors company, we of at has the of 'XX, XX-years the growth, I'm invest of it great typically raising at company to of of business was when the in portfolio we generation intelligence that mismatch X in public and positioning portfolio, very NAV run at our certainly we given strategic for a the years that sorry, timing in the as dilution really refine and per low XXs been capital much platform aggressive is so some we those in when and X%, we're operating component XX% that strategic -- now we now estate in through X of creating the was If averaged long-term return, dispose, where the play. to 'XX more moment. the refinement XXs dormant. is to we another the to to look which and hit look $X.XX, as XXXX they those into do next that per and $X.XX, next-gen for first this Board that earnings, recycling growth the earnings is the X.X%. XXXX decisions place, a go-forward Well revenue in knew believe in development; earnings It certainly assets taking to 'XX was terms share had We capital XXXX an -- is on ordinary, were glorious initiatives a most as job then last and revenue think in improve in -- were coming of of years made we operating we've mid-XXs of also Daniel up taking in from the and into with that and into down decades; at those delevering in but to critical continue we disconnect couple went was we at terms in that

of NAV the had and just the talked in we're hope But where long-term; have make As that will to foremost, share, we come look forward, and go, that the X me that from earnings 'XX earnings we market arrow will going very sensitive formats can prudent I really and that decisions pleased we we that to the place to drive look cycles to wish shame earlier, market's I want position in we look we've go, that to shame have aware we'd allocators we we're made and 'XX pleased what it to 'XX, us, about company for sure and long-term we are do to to and at making the of that both the JV is years, want at the for be capital market and growth to and need now per our said. in we're to the in continue back it years to it decisions that understands done continue, strategic going first on quiver. the lack come that and roadmap on be -- these in we're the going and

Alexander Goldfarb

is that now so that to I'm and to about sell going have you're you capital. development the of mean does Bill, your slow as much? just cost stock where But don't

Bill Bayless

not to can the private mid-Xs, do Well, to quarter the development. and put take your if answer valuations continue development into is the to capital, market development, recycle at yield not be X in and it we the do in answer that is

raise to be what it truly at again. development. and are don't find being you now able what conditions look capital we we'll conditions in all so alternative, ourselves position to market points And have yes, put into ways an various then right at constrain can capital, and advantageous time, created look the if private and us assets at harvest where the value that's in But slow the we would market put to it do down an are

Operator

to turn the Bayless conclude like I will Bill for any closing remarks. would conference back our over now session. to This question-and-answer

Bill Bayless

very a new is to new to take for proud so I'm yet little team this much. anniversary, a serve video to comments the the team, ask efforts a year Anniversary, pleased end at to my Thank foundation we're I'd what Also that what we you we've not doing the let's look by what on and very that XXth done as the a Again, the note. is do in team on company use them like thanking QX can of in American hopefully created. to but has American heights. use launch here -- as up producing positive year and their finishing Campus XXXX laying Campus's and And results excellent

do hope also future. the in we will And we us some that on our you Thank upcoming be with along you. next And that, look you April. and of forward the call talking that we hope for so to ride to investor with conferences at in

Operator

you now The presentation. concluded. conference today's for attending Thank has

disconnect. may You now

American Campus Communities (ACC) 22 Feb 182017 Q4 Earnings call transcript