American Campus Communities (ACC) 24 Apr 182018 Q1 Earnings call transcript

Company Profile

Participants

Ryan Dennison	SVP of Capital Markets & IR
Bill Bayless	Chief Executive Officer
Jim Hopke	President
William Talbot	Chief Investment Officer
Daniel Perry	Chief Financial Officer
Jennifer Beese	Chief Operating Officer
Kim Voss	Chief Accounting Officer
Alexander Goldfarb	Sandler O'Neill
Nick Joseph	Citi
Austin Wurschmidt	KeyBanc Capital
Juan Sanabria	Bank of America
Drew Babin	Robert W. Baird & Company
Vincent Chao	Deutsche Bank
John Pawlowski	Green Street Advisors

Call transcript

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Operator

Good day everyone, and welcome to the American Campus Communities 2018 First Quarter Earnings Conference Call and Webcast. All participants will be in listen-only mode. [Operator Instructions]. After today's presentation there will be an opportunity to ask questions. [Operator Instructions]. is event this note, being recorded. Please time, to Ryan this and Relations. I'd of like over conference Investor the turn Dennison, Markets to Capital At Senior President Vice Please ahead, sir. go

Ryan Dennison

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

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

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

Bill Bayless

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

our to stability global institutional will the and leasing from how and costs interest largely our activities it underlying our associated sheet assumptions. pursue drive continue flows results over discuss, will William also industry’s storms. for market balance as capital our increasing volume vibrant choose the cold QX to and related will academic provide of our comments ability the foster XXXX an then of will condition, with to line to fundamentals strong turn year. and transaction risk to with discuss reaffirm with QX will Jim status our alternative As expectations to winter adjusted get guidance our we recycling that, current operating continue results, further were provide opportunities. private private as extraordinarily only valuations. and we investors if to Daniel so conditions on Jim capitalize highest exception upcoming started. market and on prolonged I review related continue our funding and property strategic With update also the He in He cash return will financial then

Jim Hopke

Thanks, Bill.

first same-store of line largely in our unusually mentioned, cold operational associated winter Bill quarter and storms. expense related operating As were with expectations XXXX the our results the with exception in $XXX,XXX with

guidance in X.X%, the SX we a profile for operating with fourth As quarterly supplemental, the revenue, consistent our half the X.X% during by year flatter in an first on seen expenses that on XXXX increased quarter the the X.X% highlighted of and increase NOI of same-store discussion in property growth Page increase of call.

quarter Our revenue prior lease ‘XX results the up our year. compared ‘XX the increase year to reflected of the - for academic

country, the expect first our quarter was snow was of and We largely to in ‘XX maintenance This prolonged and conclude and ‘XX continue repairs the with moderate QX of repairs, which to we will expectations our much associated result utilities miscellaneous plumbing series exception for the exceed storms costs a recent of Expense other part the QX as - by combined and removal, affected weather. the year. that revenue our be the primarily budget of growth $XXX,XXX. increases excess approximately intense line growth winter winter of and academic the in with with in

growth Excluding would these same-store have expense been costs, our X.X%.

year prior by XXXX. our in were properties, tax driven growth the Adjusting for expected for largely assessments X.X%. would same-store to developed property the increases quarter and grouping property tax enter that these properties been compared our have that were Our recently

marketing was over our growth the the for prior in While quarter. first it $XXX,XXX quarter XX% reflected planned spends over the only year,

time, the call will the William, as look the year. remainder XXXX-XX turn lease We discuss within X.X% through activity. up. portfolio’s to opening at revenue of rental forward continues And are same-store leasing trajectory. expected we to reaffirming investment growth our trend activities this to the for of to for the updating I our we projection now our Our over X.X% leasing progress to market

William Talbot

Jim. Thanks,

resulted the market. continued investment investment the over first of years Turning in demand X global CBRE experienced of $X.X billion sector groups in overall student for first transaction to approximately XXXX. of XXXX quarter the the The quarter data. first housing the and in into for past for strong transactions domestic Demand

As that conference, outpace recent still funded capital long [ph] attendance investment the product levels execution interface recycling capital as facilitating at for are of investor almost produce of X to The saw the of Cap available to student X.XX% demand continuing valued universities a at Tier she for housing and people that continued record has sector sector our strong a to X.XX%. in chasing the significantly in runway investment of X,XXX activities. routinely rates position discussed demand to sale. core assets with

joint As partner fund a it term for in growth, we comprised minority interest our capital our executed a recycling relates our to non-binding with of existing activities a a sheet portfolio to assets. venture announced

expected with is cap previously line of rates range. As previously valuation range discussed provided the our the economic in mid-X% in

we partnership through in quarter [ph] close XXXX. As winter the to expect in documents, negotiation still and the largely due are second of the diligence we final stages of of

and totals $XXX approximately Turning construction of now under owned million to developments projects beds which on XXXX development, in costs. progress we and and XX our great development are pipeline presales XXXX making

our and in development development pleased [indiscernible] delivery of development at accelerating $X is or points of beds XXX and is which to point student a development presale million location presale between at to to impact. and apartment are shortly owned the materials price existing XXX-bed located community. XXXX the risk, to agreement providing addition, after with assets and basis presale we on-campus our totaled of well-respected and With the stabilized Oregon of and just [indiscernible] our price regards tier for markets. XXXX valuations leasing assets of $XX.X XXXX-XXXX X.XX% occupancy. representing communities developer directly for $X.X these and development. The million products, within attractive located responsible further stabilized announced of development offerings companies the elected fall into and located XXX is prominent and pedestrian pedestrian between now of initial X a announce $XXX X with conventional in the the diversification X.XX% in presale is For this marketing major The XXXX expected yields University million scientific Oregon. projects between to ACC communities retaining recently XXXX, the upgrades includes of All have our market campus and University operations specs billion-night ACC and and west universities pedestrian development to core purchase and we current yield X% are and entered are developments a to for targeting spreads either close for X.X%

[indiscernible] highly the of XXth XXX-bed begun part year to the with our University. pleased Turning partnership represents timing for to are development successful night development proposed University system. project pre-development announce third-party of scope, have finalized. completion project the our [indiscernible] on a full been management on have upon The our campus and feasibility, business, on-campus anticipates we fees not The Texas providing XX as of services our company we

our of We third-party University State predevelopment of The great and Goldman making Public Berkeley, of University. of Delaware are our Policy also progress University at California School on The developments California Riverside,

opportunities continue set pursue XX% to We totaling of over on-campus a deep projects.

results as We it I for Daniel to will turn continued we market over to the will year. financial now our make progress. update discuss the

Daniel Perry

approximately we reported reflected increased million diluted million of expectations our win win the property amounts X.X% to per total for fund $X.XX million weighted the acquisitions. an win million million of the $X.XX FFO of or as average shares first or to FFO half or XXX XXXX. quarter but per $XX.X William. FFO in ATM in $XXX share quarter outstanding from resulting share Thanks, for activity fully first in XXXX first $X.X XXXX met of per individual share of increase in results by as compared million diluted three $XX.X shares X.X fully

properties acquired portfolio interest in of million. developments Spaces partial a totaling XXX also four part transaction as million operating delivered $XXX for Core new XX and the We

XXXX, properties first from expense lost the million the XX FFO additional contributed $X.X dispositions. $XX.X offset growth NOI in to of by in compared million interest and As quarter

experienced discussed, the of quarter due NOI same-store the below flat winter year. part budget slightly first of storms Jim impact was which to for the in relatively associated contribution the As expenses excessive with was

and X the targeted value value EBITDA be approximately maturing down the pay in X XX.X% floating and to debt-to-run our times. quarter debt-to-EBITDA as net loan to back to term year down Moving Company's $XXX joint outstanding other We net from second and time expect rate XX%, capital the close use and was proceeds XX% bring of able March debt-to-asset below to intent to debt million venture that at times. XXst, structure, the this to value debt-to-enterprise was debt-to-asset the transaction was rate

total of below will XX.X% Our at the transaction. also be after debt reduced floating which rate debt currently stands XX%

demand and company further capital to the range of to As our our product to maintaining core mentioned, we housing opportunity execute the an given recycling William continue for also development and on our position strengthen to FFO previously significant guidance balance diluted per attractive to sheet pipeline. guidance, to student have stated in share. additional private the execute are we With on regards XXXX $X.XX fully market, $X.XX

factors fee the will For and income. property our annual performance, service fluctuations significant most third-party the balance of NOI results are the interest year, rate impact that

property million to NOI total XXX communicated For previously million. NOI, of we owned XXX

six the also vacancies costs is spring be final meet any operating year short-term the our in up. with property of positive assessments slightly lease additional negative that for in continued an dependent important as store year up remainder profile year of to reemphasized fall of NOI of for to first from due lease slightly growth well guidance. months in dispositions the we've Final the fall or guidance store and same second revenue dependent as leases. of the maintain ability NOI XXXX final to for our will our anticipated upon occur growth our expectation produced will XXXX due our expenses that anticipated the term ability in same also half upon that any with within the levels, success summer NOI the improvement growth be results excess backfilling increased months our including Our It's to to

only fee Phase party the $XX.X and income of assumed Our recognized $X.X project [indiscernible] expected commencing million to UC of half low third UC constructions. end the $XX.X to with commence of million start in commenced the have At be in assume million $X.X the we first and to guidance, producing from projects X party also third Delaware high-end guidance, income, fee Berkeley we while the State of also guidance riverside range development the at projects includes year. second the in the million range

in negotiation. the projects these feasibility document evaluation and of process of are All

pages actual statements. to SXX back our With of consolidated reconciling get of each complete reflecting In also in that, can quarter earnings our each the operator the component the results to guidance column to of refer financial turn question-and-answer components company's facilitate of added start the the SXX details You to it call. to supplemental and we've to year-to-date guidance. the I'll portion of this XXXX

Operator

Thank you.

now will [Operator We our Sandler today the will ahead. questioner begin Alexander Goldfarb O'Neill. Instructions]. first question-and-answer be session. And Please with go

Alexander Goldfarb

just questions. two have I Hey

dividend as public The saw so you obviously that the wants a not interface strong question, but it demand capital comments NAV the deliver growth, guys talked to for in. that's you investors Daniel can trying your as and tangible general growth. for for is we market not first in REITs outside who to market if the company, in you're there investment wants wants one, it's is the about the you just to invest attract but everyone assets metric trying which that growth,

and were more prospects originally you how can your how dividend against it not fact earnings have assets with growth hands at were you're -- don't are you there worth done funding you continue the balance guys then thinking the that how that they moment growth do they the a prospects, But and would diluted know So and in thing. match balance do and there to to balance I you but that's extent private the good going REITs those? yeah, grow do are flat investors left other when grow maybe

Daniel Perry

board standpoint. an from it's our And capital Certainly. a ongoing allocation we with conversation have

returns, deploy growth earnings we think good a when certainly to to a for benefit capital per standpoint. consideration things sense valuation NAV development shadow overall drive and And at able existing should those from and into yielding at harvest you're high it pipeline periods good to The both in Looking makes our That have improvement if of the share growth. with this allocation attractive is capital allocation assets right about doing developments. during it. being relative looking like from that to opportunities we're

and on, that So, you you consider, you timing. try have and that go you so that consider now match more to want may capital to growth do de-risk do well rates ahead move cap harvest or to

that’s an assessment ongoing so us. And for

sheet. to continue We try it will growth balance can drive while as much and we to certainly as managing our balance

Alexander Goldfarb

Fair. seeing is But issue development” we’re think part “value wiped mean recycling for I the gets I capital sector the on the side. that that away in creational of it

sell development. like yielding So, you cap niche here to low a it found to good fund higher guys seems

‘XX we’ll but opposed a we as I not that see growth hopefully to will of telegraphing mean see that is So you ‘XX forward year. think we growth I to as flattening. earnings unless know continue going you’ve should guidance the given are message hopefully flat

Bill Bayless

are spread undertaking higher that that portfolio certainly to a are obviously you the telegraphing for point private and made this valid very year’s significantly the going cap investments do having be Bill, is any for in point situation is market business with -- where we of made be much pipeline. you we not that development add acquisitions at the but that are in we rate, we’re into core came ‘XX, value the Alex valid the is that a the the better the dispositions with prior environment point going anything making would this We accretive recycling now where the

XXX XXX typically are looking mentioned and in to the spread development accretive in pre-sale the we of points his opportunities nature. script, are at basis As William

that market we an And is long be opportunity William and where seems market, so, [indiscernible] opportunities. to it the the the come now private private for go a when to to it cycles seems too the is as in in us area runway put with about, certainly mid-term talked advantageous right but near to consider that be

Alexander Goldfarb

looking developments, Okay. finding looking deliveries you question, up the second pre-sales dates are everyone you at their targets are June delivery, developers there’s mezz such targeting as deals all sort a May, the of August that now an sort it targeting pre-sale, And complete new that or where that you’re is time? a guys at the of of on still the for may some mentioned then you risk not moving

William Talbot

talk industry, Yes, focus it. Alex, in deliveries ourselves there��s Certainly, publicly the this and on-time you’ve the EdR is William. renewed been a on about heard

We are focus that seeing developers other as well. on

offsetting And to so, continually cost I accelerating balancing of think of delivery the risk they the delivery. are the

and own on [ph], pre-sales mezzanine our specifically we our do we So, agreements.

damages defined We dates. to have liquidated very it relates delivery as

risk occur. But So the the with and we are deliveries through delivery sure the to case. that stays more on-time that developer making more sensitive that in industry seeing

Operator

Nick go And questioner Joseph out today next with Please will Citi. be ahead.

Nick Joseph

Thanks.

question. getting developments, in one Just terms pipeline? of as your did following as up development Alex’s as dilution What’s high not it you’re in you funding obviously of and with on comes on it yield growing a your are the appetite, quarter existing you pre-sale

Bill Bayless

for those with very opportunity multi-asset great and selective. in. we yield in in Florida Nick beyond next markets cycle they want it’s you When Center State talking market going at about the and core long-term have the look holdings the at initial two we be are because Stadium are this very, at us initiative holdings that part are the to to that in of our is it the pre-sales

risk what of of much headline yield strategic not it market so, the the what ability the means look in to William pointed we're just looking more company in out have and mitigate efficiency is with that And then all selective and that delivery terms as risk the the context at of growth. and aspects of away. but in more the we're or that of mitigating and in presales walk development And also associated looking at terms selection those

Nick Joseph

on How potential included and many work JV. ACC's ownership retained are Thanks, then the assets and percentage? to be going

Daniel Perry

This is Daniel.

we've that would an maintain the for not And give interest the and properties. X exact would I maintained did ACC from about call last transaction, a think with control operational minority ACC interest the on include on it assets. be majority We would management talked partner. the asset percentage but

Nick Joseph

stream space? do Thanks, and on the domestic can first capital you entry and foreign the the another provide to color partners, any assets the own versus they and helping

Bill Bayless

we really out and the the we working the joint specify opportunities and on once those to we are institutional specifics. the call, global tight JV we one large from last the didn't a As with. the interest providing domestic. certainly, will when specifics lot is close more venture said But of brought partners certainly be who And we saw we both of we groups

closed. So, we specifics transaction the more don't give this time, any is to want until

Nick Joseph

finally to just XXXX And on thanks. now development the opportunity Did to or there is complete XXXX. add Alright, presales in there? an Oregon presales continue

William Talbot

that see now, already additional potentially do to at This to add came wanted being not is are we in be someone where their pipeline under something unexpected to any But this William it risk. flash is Yeah, this to difficult assume that development would you I cycle, presales for to would reduce point very presale in eliminate mean again. there pipeline. unless or I or stabilization 'XX projects construction the would who's a

Operator

Austin will And be KeyBanc ahead. go next today our Please Wurschmidt with questioner Capital.

Austin Wurschmidt

Hi, good morning.

supply on particularly and challenges some about talked Tallahassee. College side previously in like have Austin guys markets the You Station

or anomaly in maybe similar As that where season, Rochester at other any point last for there to preleasing this what is we are example? markets at unexpected there challenge similar been are year sit showing happened here the

Jim Hopke

hold vacant that to Austin the College the you've this closely, certainly out continue and Of year. have which obviously this pointed currently. that we watch we year able in diminishment softest revenues in flat this expect was not pretty doing last rental an Station. continue in the maybe And will now flat nation, both College still watched Austin, having of to where job is. basically an to the training the that in any our beds three how close absorbed markets this hold rates other new above. we to and Tallahassee. were slowing X.X% making last beds outperformed supply last market, XX% Austin probably above much occupancies again rental station markets rates incredible to is new Between market Austin the like [indiscernible] with closely on XX% The we right and are based company an that the is continue Tallahassee again. Tallahassee is supply to may about to three diminished as job as we be for and and market of candidly year, right the but And held the incredible fall. demand those rental year that's significantly and on In we team the be are in totaled And year people XXXX supply, XX%. down do done in year comment in strong to Austin indicator velocity expect to there team portfolio X%, doing as trending be we

we to watch So, continue those.

that rest the revenue in the we that Jim And properties the in confines X.X the look range time see to there. again, portfolio point within the terms half when last X,XXX the historically -- and we more you guidance X.X of of this are historical leasing, Lubbock gave overall of RIIT. the combined at the to those beds trend reaffirm seen us at Lubbock, trend is confident have in growth. of As don’t three Champaign being we of rental markets, There year commented, you than was in the saw with comfort

we developing manage. and that watch time we to continue the see do three identified in any at of we not and anomalies those so, And this point closely

Austin Wurschmidt

takes occupancy some more College of then do period Bill. level? there How peers think mean market that it absorption to the year. the you appreciate occupancy for get back I do what I you stabilized last as And your long think Station, to as far is? XX% You detail mentioned

Bill Bayless

growth up the gains. There XXX,XXX. is university Last enrollment growth enrollment I year a the take they a so one-year they been are and believe has the statement university’s XX,XXXs that intent and enrollment believe made X,XXX I low having prolific. has was now to to in

that the are think a lot College to think with folks hurt, so, of met, slowly. mean been of enrollment from development their kind Station some performance And not going campus. will do I get too growth mature I built far We has

probably may So, again, do very long-term XX buy great But it want be to the will it the are months. it a team to on the salute XX in next College I opportunity Station Station call be fine. publicly we the College is on proud. and really is growth and strategy our have history capabilities in a overall overbuilding diminish. management company’s and any and not having situation testament able to weather to it flat have our to in worse our to single been rate the rental investment what market

recently. us unsung as we for organization it’s So, probably had an accomplishment the best

Austin Wurschmidt

on cost impacted the next last curious to I particular six then that much appreciate upward construction are in you’ve months, just hurricane maybe by seen then how in you in if seeing And question, over three differentiation any markets? pressure and region that, particularly? period

Bill Bayless

certainly underwriting typically to deals construction, out, we bought in those ‘XX jobs ‘XX escalation and XXXX seeing risk the that. look beyond, in and we But rental the at X% Yes, have X% are fully a we pipeline are and don’t for as escalation.

pricing, tariff ranging which we what for steel look looking escalation some being too in high are that an to so geography surprised the make and the formas pressures and doesn’t some all-time and trigger is having all you pulling we are have certainly, and and that you versus on the deals on depending want. X% the we something and frame related discussions beyond is of we it pro sure yield underwrite impact see at road we appropriately as have seeing stick on down alternative. concrete can X% you As XXXX steel may regionally which escalation obviously wood buildings as an underwriting got based on between something But that’s heard

Austin Wurschmidt

you then that’s And geographically think differentiating?

Bill Bayless

Certainly, get concrete typically you your into is when steel. choice heavy construction, and

your high are get you getting into you for on you Southeast impacted of one yes decisions making And your the pressures commodities. absolutely of there. in those the the stick and frame, frame each local pricing on decision seeing into you wood the geographically have you're us the where yes Northwest and Northeast that’s traditional And and of Pacific and Southwest that was when norm. [ph] market-by-market construction based and the where type tradeoffs. in so, frame the those situations get And wood [indiscernible] those Yes, rising we construction when hurricane and obviously are wood -- still

Austin Wurschmidt

does as back Thanks And adjust into well for as about, make you've the that. as pay rent property case deals given these taxes well costs attractive kind of as that rising the pressure off-campus of ability property does construction that to talked and you combination targeted deal? the look you upward make your more to taxes out XXXX given the as on don't on and beyond than ground today

Bill Bayless

escalation, had absolutely, And [ace] and overcome doing inverse more see to the more versus do the flexibility them each real residents to land dance and estate halls it it of a on No, owner. the our transaction the you to material in specially specifications not potential estate you hugely most in estate of land, benefit market University's of cost a transactions But related give valuation spec tower the of challenges is certainly to product advantage the tend yield. real acquired private expectations is always the for a that of the have ivory institutionalized you've you offset the on-campus the commercial in is first-year with private the by having terms the do real of taxes. negotiation, taxes. that transactions That's

XX [ace] this and you the so, being transactions. year seen X pipeline And with have development

Operator

Juan And Bank with questioner will our of Sanabria America. ahead. go be today Please next

Juan Sanabria

the Hi thanks time. for

Just a couple of questions for me.

timing you're slipped asset with On if NOI latest is you back much What's remind that, asset little a the the handing back bit. how and the that the and anything us to associated with why could lender.

Daniel Perry

this Juan is Yeah Daniel.

with middle been for So working and of right that on that receivership lender assets we've And last since year. now. the

lenders, once most them with As over. I assets own long to don't they the actually take want

to it think The when to in their it improvement of see they the I off of to $XXX,XXX hoping $X was the about are So, they flip back amount NOI of to million try coming it. some a property maximize year. lease to up a take out evaluation

of that. rate a that's very disposition with loan effectively cap low million terms $XX.X in away So, a going it's about

effectively So that's sales the price.

Juan Sanabria

the weather and Okay colder and were then expected took I that’s the or floating than just higher bit storms. higher you little the from mean from And weather you'd hit rates maybe on guidance. a earlier that the guidance least would presumably unchanged with of kind Were more other or are year. on positive your any at kind be the there of low gives comfortable the color kept Any end. to there in you fantastic. I the

Daniel Perry

positive were the when expense the XX look the every in, points. basis on overall impact year, expectations expense insurance points. And so still on you being property on it same notable operating for is basis finalizing impact XX which the for or about completed assessment can our to of side, been But tax for $XXX,XXX with quarter Obviously, you're expenses. those operating XX have winter May. at store certainly a No, about operating guidance still renewals negative coming talking about the storms the growth

for change point. enough us this operating on material expenses, at wasn't to it guidance our so, And

on dial be a that more. expenses information of in other more we'll components we the larger to little bit able As get operating

proceeds rate venture the side, a prepared we're interest we the second the the debt quarter. expense of the lot as going about remarks, paying to On be in that from joint down during floating talked with

interest increases rates that of at had reduces for our in expectation a with our that there we in to-date offering with another up and rates. that’s we what in assumptions included guidance exposure fourth during so pretty even component the with and our that line and is are looking to run Obviously, lot regards bond interest much to did And the was. we’ve pricing allow quarter

the offering bond positive in on some as Although rate increase the seen it thing additional side we offset we rates, impact. at could on certainly is to some see spread of certainly the an have if increases continue equation. be The in the point

overall rates. that’s so And helped maintain

Juan Sanabria

And of a the Oregon excuse pre-sale the just on comment University and little University a there? and earnings mezz Oregon kind earnings loan, of rate there. background what’s require just mezz deal of on you one from what Could your loan, me, like the -- that does and the there, suppliers on just why last me of Oregon your in

William Talbot

Sure is Ron, this William.

of few we are out not is of than other subject we development on a tracking are that beds on, the there that RFP east development XXX are next There net any for other side in the development working the that campus campus off campus is of years. potential on we all, First also a about reviewing.

significant seen the And recruiters, state side about the made enrollment not hired stay of enrollment. supply. by on that have very other a to of X,XXX then concentrated the lot university So next out the in a of actually eight over enrollment, improvements has on actually grow effort years

So demand the pretty on supply positive metric. side

to off not loan seen are just others netted that at used attractive [indiscernible] spread to at from a achieve. developers with monthly rate on LTCs like that we project paid be to -- able -- construction closing we the the that and get the XX% Specifically, still closing, say but interest accrued have but LTVs wide loans or with price. did the they this mezzanine able to The

that what significant stack putting to spin complete bridge amount capital got are But fair with in from is mezzanine a And of get still reduce and available so, higher project. standpoint game they the a equity so to equity. loan the they’ve us they as little rate help in XX% to are attractive utilizing to bit

Daniel Perry

is Ron, this And Daniel.

caught clarify, to accrued you William the know don’t I on the mezzanine investments, the the at closing. netted Just is paid purchase price if what against That said and there on XX%. interest

interest does So, statement. it’s of bases reduction in a our and flow not through the income income on

Operator

Company. & questioner Babin And ahead. Baird Robert W. go Please is next our Drew with

Drew Babin

I Spaces morning. as that that been that point end to up of know that scatter in have in research Circling back a maybe acquired, seeing in Core Alex existing Alex’s I assets that’s year portfolio your proves near this In profile good of be quality beginning, that like asset? at average could up your out acquired in you also recently anything the to Hey, of the in touched able signs [at that there on are more the to terms really this the these behind full is some de-leveraging have point has assets from term your some been portfolio of think can might are those past kept in assets growth at some question for assets things growth, there go that. outsized growth think also that has check, growth exceeds that come of up kind lower stage I least] any that yielding and you full

Bill Bayless

we're Obviously, be to not going add.

year's and this finished rates. lease we finalized So, up those occupancies and

to assets. close rate at able the build time housing years see fact in the this on averaged that child, and Seattle the in in So, turn ability, certainly be the America. We're metrics point student it's X%. limited. We'll demand what last on X-X our you based like is has poster of cap point lower those the X% assets we're outsized based not to we are that those to in just we're But market offer to is underserved going Austin on and That believe initiatives where so our purpose all which able similarly those on market. acquire to anything develop most we our to supply over returns undertook all first based all of

to period over call in outsized X think the we it metrics those offer market returns so, XX-year the areas. And substantial

those we point case in them. upon so, aspect is seek And certainly the that studies our [ph] have materialized undertaking But based certainly successful transactions. as to we'll entering those and

Drew Babin

And would is attribute initially. A&M. more it Texas obviously rates it to things to. location leverage steady, that specifically you Okay, properties than maybe aggressive helpful. your do holding of is a attractive supply… on that's and the little with question thought have What's one you looking leasing, just relative more more on attitude towards

Bill Bayless

American one of We look at early late-XXs all pedestrian my the at basically the assets the certainly and land market. Station. brought comments you in saluting the investment started College XXXX we're And that to Campus and parcels we're campus. early back companies philosophy. team When in our really larger Investment And the

And at the so, the products that we right low built street there basis. frame, very a were X-story across stick

you're in metric of are proved of the Athletics. also, the market staying plans Texas in by the high-rise about have We sponsor of built per saw areas. equal where price And and and and began sudden, type properties A&M unit of and or be $XXX in an number construction typically ours also was with there really one because marketing those of bed become As that's provided for talking that pricing mid-rise the scale to newer official we out in the stand came locations product our power. with that the point we not classes your value again of of we're markets that than a masses built significant developments have and the beds post-reach sports heavy all worse escalation a smaller $XXX premium to more it

to in in staff brand we else one a give has And couple the market stadium. is year phenomenal. outperform out. me one been I've the our And the of and of the and of as Stadium, that baseball Station Football incredible then personnel sign in years so. competition And corporate as pull the so presence always our that been in probably recognition over also, and so, College given have [ph] in ideas got deadrock many anywhere team just we year continues

Operator

next questioner Bank. our Chao today go Deutsche Vincent And ahead. with Please

Vincent Chao

a of couple everyone. good just morning Hey quick ones here.

outline costs think in early well at anything very April of guess know I impacted in you're first will there obviously just expenses, that that there winter notable the is is quarter. of any extended April. for the there terms next you few curious being clearly is a point? quarter. there be in if I I aware storms this Just as was

Daniel Perry

that we norm are melting time not right for while of Certainly, you saw that aren’t on were not also when first as much relative that much. from snow as with few have weeks been only keeping chartered We're normally they hearing again year, they we non-extreme to because more hear. certainly for as [tight then now an storms to are comfortable than around And a quarter. in lot tell of quarter extreme, enough problem. we been The Not here. on facing than timeframe this the what February typical side, temperatures second hearing the the quickly. later properties it were in unexpected, we we've in have be but that rates] will the the eye I a

So …

Bill Bayless

winter The jacket I and afternoon get is other thing the we I as get to end in QX will into is which a and Texas know mild of late June translate get do middle the to the into weekend go April. a had in summer. odd of hopefully into mild we that this

part summer that. those of have will wait little you benefit hot nature mild get have extremely throws But a mother to over second the but line. see May, that to carry within how hopefully So June rather and curve see don’t this temperatures an we will from we will we

Vincent Chao

of past. in I few three that just And then like healthy that as XXX,XXX any the know Okay, behind side, little you had expense may the bit there the you framed general play years was expense or up. because and I you’ve some forward? bit though, whether sounds least or just overruns little demand marketing there ago any you on you had you that going and a provide elevated catch you’ve thanks. markets just marketing budget. expenses these other I remain am maybe supply highlighted it over But they can color any outside guess can and is curious color ahead mean Are curious where you to of are is there today am on a out at or marketing in provide, situation not I markets in I begun a

Daniel Perry

behind got marketing a do to where had in in we portfolio the of this years part XXXX. we so of lease quarter acquired had lot in of period early the of a season, we spend the we try leasing associated as excess where Yes, up few saw we’d remarketing in second integration ago that just up. to the our had speaking to was half XXXX efforts what kind with post catch as a actually We and because

Bill Bayless

XXX we on bps were we are historical the year of one we outside And we within completely this behind, year. that was commented it cycle were a

Daniel Perry

more different it’s Where the One, and rate, some strategic renewals really this early as to of we are in out are of in part trying much in in all get really earlier along achieve season we then markets standpoints. and a as is markets can, from to occurring where we trying also where of we much effort get couple that to trying as our can. push as

in to there execute in really in window markets start that tight around want the market we [RIT] to through from Lubbock, to a that Champaign trying making those in a turn last have in certainly good sure so to markets. then year We we off and that. are on get where And

the dollar and spent been like are prudent…. the seeing feel So, it’s we we from progress

Bill Bayless

a small number. it’s And Yes.

we over is mentioned planned for just quarter $X which our only bed. Jim over As the spend per are $XXX,XXX

being spent And the so the and XX% near highest in well that context historical category. really number really nominal dollars looks certainly at biggest not the in nowhere but

Vincent Chao

in And until quarter being that on the line doesn’t item sort side. the your that XX% to insurance for you talked I happen then expense that clean year? last one range know it. is the Last Got just up May about be of guess I will expectation question up plus XX%. renewal

Daniel Perry

at looking are to there we try control Yes, that. and options some

look we to premiums. ever would whether on our renewal. increase manage the We deductibles and the finalizing rate increase still are We at

and a and making well risk go would analysis more claims cost associated to through we and with the and do control will off. are get increased tradeoff look be which worth growth for deductibles we kind we trade how there and maintenance then your and there what had are insurance historical taking You it much of repairs

that finalizing our you still to but that that from think going cover guidance certainly side. So is

Operator

Please next with Green our And Advisors. Instructions]. Pawlowski John questioner [Operator today will go ahead. Street be

John Pawlowski

this capital interest Thanks. I understand robust on in comments your product the space.

your pricing a quality? XX%. the expect you X that as on to in in bottom see quality seeing or bottom weakness in curious you lowest Are portfolio, Just any segment number take

Bill Bayless

cap No. miles look now, of you is rate properties bottom at largely your our There towards also. bicycle or half portfolio the portfolio your compression the the would we're done drag continued be of we more mile portion to all to what properties. And in with when of was refer that through area

that's so to the X.XX in X.X. And probably today

it product to is bps ago. continues where category it that vibrant a be to months probably was XX from bps to to so, And XX down another XX XX

John Pawlowski

mentioned over on. their years number then to perhaps X universities Bill and housing And currently Okay. talking stock, the deals you head higher? does hopper, the development needs in to meaningfully past, the outdated assess you're in that next an on-campus you the XX as pipeline, housing Curious working XX roughly had

Bill Bayless

at on The used commented to we've time tracking calls transactions we ago. working probably X XX say thing and was seem now always about The it's XX. has. to It a numbers be

that the can more replacement again and seeing in. age average markets operate we of age operate the B currently older existing is we're and anything on-campus more XX first the well beyond And age the housing the in go stock housing. A markets currently that With we average of years. the year the transaction, of

to this living the EdR. that is key like do about the estate so, which business companies, is does ability one to environment sector real creating learning have it's opportunity not and the highest continuing of for about our to vary continue is entry American the Campus just universe and expand. barriers and university to understand And because have That the for

for years. And the do it and those stable would a not company. so, we the expect regard, see in as shrink opportunity that to numbers over growing And

Operator

ahead, Joseph be question a further with Nick And actually no, Please at have up follow this, to do Citi. it sir. go we from questions looks no

Nick Joseph

Hey wire. just [indiscernible] Its the Michael under

Unidentified Analyst

I Do on commensurate understand the you a why of continued you're the the but to funding proceeds? is external at get development Great. needs, capital? joint sitting overall new evaluate you it pretty lifting are that assets. to inherent sizable you pause your I can the of equity your point Bill growth the match of initiatives guess funding that more And commit on just wondering discount fact I'm to that given you've a some the And button disposition the when aggressive to not quarter, development pipeline. value when equity, some be without working trading growth at the this but so, venture committing issue presale

Bill Bayless

Absolutely.

pursuing how presale at that make when And it's that the risk-adjusted development ace opportunities scale only the to of is think talking sure back think off-campus reverse that. I in look in about you're you growth we best order, way priority highest, regard. you the do

accretive of so. powder and mentioned always environment we do make match forefront done term only of do we have the the we also. needed comments a are faucet The the to on off-campus non-accretive brand where I diligence objectives opportunity capacity on there job opportunity dispositions But our the make to cautious great a from when that are And that’s we the one match my selective very related that that go and want fund are do is when we have with the we make prudence opportunities transactions Michael long-term prior we off terms sure to do maintain that to after preserve the in something pre-sale to and good we and the is have, that that thoughts we turn pretty through Board. we slowing best-in-class and we in strategic certainly, when where that opportunity of our of to need faucet is there, sure to developments looking the to And organization. have the funding, as down and that the discussions that’s take on-campus sure that pursue on the very undertaking makes As Oregon and given the we business. the those it’s pre-sale that longer sense absolutely easy it

Unidentified Analyst

your the that in assets you the on sort why side for scale when something pretty year or be the the nine capital position venture doing already bucket where doing right, the last sheet And or committing that of new you question not increasing not capital to a price months, significant front? I is did about box. The stock joint disposition pre-sale increased put a elevated. telling you have won’t a scarce, development leverage more I really forward large should understand balance like think this on into last aggressive and working ace you to I being disposition accelerate guess you why is are you acquisition much, haven’t people put don’t disposition this been

Bill Bayless

not Lessons do of dilution but as is penalty that. fund. the going the execute certainly, the pay is we and to that talked back an pan take a rather to go being to from at hindsight And closing dispositions. talked it what beginning made on match in that in the box accretive look the a we that the out about, The the William disposition from it’s the lesson there to quickly good we news There with in you opportunity certainly that the and with box about. is did very after was timely decision learnt Core, be the at time disposition, learnt of the were announcing Core through perspective given in though

disposition, quickly. on related an will at would that opportunities to at, are something right and ability development, the in So, be environment that additional pre-funding we see so we to look we fortunate and pipeline the extent through it to through is execute have looking do that now seriously we that if choose to consider

Unidentified Analyst

at vicious assets the cycle. you -- is so, of a stock And you high buy little bit to six it probably own new right? want just becomes where of be your into it your issue can back equity, leverage trading rather you too if and are a Arguably portfolio but caps, your place sort to your would would want than would buy you bringing on,

Daniel Perry

that. our will I that’s shadows Board that’s out figure ongoing you be to have we don’t we comparing to the alluding have that. external conversation an we consider you that to given what have as reality And it’s executing regards as referenced in up conversation for mean to to for against continue to going have with we buybacks, a that and persisting on pipeline also stock growth you opportunities. with want The to look at issue the on have. whether leverage with also you the execute Understood, a But we options Board

that most selective. with deal of the point the said University as where make are that think is Oregon I to Bill is place we that a

We and that. are allocation whether understanding we without opportunity we not adding of an all manage But builds considering the with justified fully point, capital think it's have balance risk. standpoint from board given on how your the our dialogue and there to the return really is a ongoing sheet

Unidentified Analyst

Yeah. sure bigger making And a by and capital levering the portfolio But I'm of and have have have do not apartment. with conscious lifted love that all us larger up to the it. have -- would economy to

ventures. and appears have raise really not time? the you're to the of why down thought X push two on as capital going there to pleased time doing this taking go Had do as attractive having and the things. is you you brain is joint versus In discussions through all interest not and very you're pull so, foreign the capital on ventures joint be there why well of extraordinarily stuff, the ventures. of always attractive cap domestic on the all maybe this damage And that with joint nature road the if Once about doing what

Daniel Perry

joint think venture didn't known, to would that at both we both really so We is pretty out. And of also something great partnership alternative University in the ran profile. that we've driving as the balance or as is simultaneous with balance and deal raising we what when Yeah. that and opportunities prudent we're or processes well that on pursuing managing improve the sheet to route we venture capital we comfort available growth trying that have us work as additional knowing we're be earnings have the dispositions we knowing can a to managing saw one the to options joint us have while of use capability. And Oregon to much given simple and it's I full and available looked other that widely that fee as actually this discussed interest process sheet we have that

Bill Bayless

appetite from as This that. a one-off transactions. as rather have joint picked venture. we But a was this approach selected the Mark we the joint in undertook that announce a first QX joint think partner. pleased be not much partner of same comment will And an be process is Michael talk strategically venture of look to the view and That quite I venture folks it what it. we're very ran perspective I that and to are we quality we've about. about talking this here When who at a for numerous and could they position how And and done with certainly in we

a one-off So, venture while be in put this it nor not is joint will transaction. a single that a together was the conceive context

Operator

this I over our like Bill conference the back to closing would concludes question-and-answer Bayless now And turn session. any remarks. to for

Bill Bayless

that, With of with closing now a to beginning activity. into We're the quarter heading heading last X X not lot know pretty Turn. the with forward we leasing the entering as and months you and months straightforward a our of of summer

at want so much. Campus forward for I call. And activities. next Staff conferences you to talking all summer and thank the their American QX Thanks we our look to to on again So, all

Operator

Thank for attending conference concluded. the you presentation. now And today's is

now You your disconnect may lines.

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