American Campus Communities (ACC) 23 Oct 182018 Q3 Earnings call transcript

Company Profile

Participants

Ryan Dennison	Senior Vice President, Capital Markets and Investor Relations
Bill Bayless	Chief Executive Officer
Jennifer Beese	Executive Vice President and Chief Operating Officer
William Talbot	Executive Vice President and Chief Investment Officer
Daniel Perry	Executive Vice President, Chief Financial Officer and Treasurer
Juan Sanabria	Bank of America Merrill Lynch
Nicholas Joseph	Citigroup
Samir Khanal	Evercore ISI
Alex Kubicek	Robert W. Baird & Co.
Alexander Goldfarb	Sandler O’Neill + Partners, L.P.
Austin Wurschmidt	KeyBanc Capital Markets Inc.
John Pawlowski	Green Street Advisors

Call transcript

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Operator

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the American Campus Communities Incorporated 2018 Third Quarter Earnings Conference Call. Today’s call is being recorded. At this time, all participants are in a listen-only mode. Instructions]. [Operator to this like recorded. is everyone remind would conference that being I Investor Campus would the President Senior and turn like of for over Markets I to Dennison, conference now Communities. to Ryan Capital Relations American Vice Mr. Dennison, ahead. please go

Ryan Dennison

non-GAAP In to comparable posted with the for Investor directly has provide measures which Reg Thank Campus the the release G find widest access company the call. includes accordance financial press to measures in package, Communities thank press on reconciled will and those GAAP furnished in audience. earnings conference you American requirements. on release quarter the Relations joining is you. a materials both the third package. Form an and company supplemental Good The Also morning, section, website the release, you financial the XXXX X-K possible to

today’s live on for a hosting the are with webcast one the website access We which available replay for you can month. call,

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

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

Bill Bayless

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

in XXth pedestrian growth detail opening following. the occupancy; QX year; of development consecutive by XX% of further awards. positions at for regard under us over rate, rental year quarter NOI; prior the same-store completion revenue stabilized on-campus X.X% during the assets the fully successful lease highlighted internal the high-quality our up, the of to the growth and with will of call, rental XX team NOI The the for was delivery budget core and As quarter progress same-store on-time, of strong in XXXX which and successful

Housing participants the NMHC recent market. at reported lease Beyond transaction another Student American performance Conference, a and successful up Campus’ industry vibrant

XX.X% to assets with campuses, decrease XX.X% their X% same-store prior portfolio, based with rental supply mile a XX new expects from more nationally, within increasing the year, of decline Axiometrics starts supply in by which they industry consistent with respective Axiometrics enrollment. core pedestrian solid XXXX reports XXXX historical half new than of rates and Additionally, the fundamentals located bps for XX% beds X.X%. supply track regarding a we’re in ACC XXXX nationally with increasing with of X.X% for fall on to fall fall new materialize. representing how levels, tracking In to approximately of markets, also actual construction of XXX,XXX

supply over new that XX% the XX,XXX number versus of top While smaller important for XX% that a next our new we’re supply which only note XX year’s into XX, XXXX versus is beds XXXX also our new tracking approximately markets versus noting anticipated NOI. worth year, year’s represented NOI translating of markets top of XX to fall, beds markets it’s spread XX,XXX fall of XX this represent of It’s new our per this market. in this

over the Additionally, next short-term. new do We expect XX supply in State the for markets continue supply significant of received impact to no XX Florida the new XXXX. in market fall new to supply

operational in occupancy broad to Jennifer healthy, fundamentals of forward Officer, X,XXX up to online successful Beese, additional XX% to in to our for the in online new reaching remain X,XXX with color we scheduled XXXX, another fall. only lease came With academic overall I’ll fall are it XXXX-XXXX the the look the XXXX this that market beds of results. As addition on in beds come turn fall Overall, industry over provide Chief that, year. our fall and to Operating

Jennifer Beese

Thanks, Bill.

our with As XXXX operational line were third our quarter in Bill mentioned, expectations. same-store results

consistent quarterly X.X% calls. the supplemental, increase by revenues with operating X% same-store on in quarterly S-X increased Page profile seen As and the prior of property growth in decrease a NOI in on outlined a of expenses X.X%

and a academic quarter of XXXX-XXXX reflects XXXX-XXXX third increase revenue the years. combination X% Our

the in in majority our or largely line expense Our third of was growth. with profile with savings expectations, the expense our showing category quarter inflationary

both expense benefit our LED well continue positively power purchasing of and expense cable phases We national as impacted from QX with initiatives, controllable and leveraging focus utilities, such our of lighting X.X%. with for are by in our only controllable items These results been as asset management have as Internet categories, we the growth our X.X% and very additional year-to-date providers. quarter on expense pleased where resulting with will to our savings year-to-date, controllable of

Turning to leasing.

Bill an our projections track our year, have team properties now to to our expected of XXXX long-term XXXX-XXXX on ranging to are our increases. guidance rate are of pleased our portfolio we both level the same-store look job and our will expectations. specifics our stabilized. lease September I long-term driven academic to XXXX over this our Since to for producing ACC revenue up returned Based the the will rental by same-store presale be on outstanding activity. did and revenue to we X%. updating development approximately new XX. results, forward and at The properties the rate our an opening growth from of We with of finished investment fully William XX% expect were rental discuss As and record occupancy occupancy of XXXX initial on call setting growth properties produce majority this call market average next turn fall to XX%, highlighted, opening our portfolio XXXX leasing occupied the once industry-leading again X.X% consistent with our especially

William Talbot

Jennifer. Thanks,

these owned Development X,XXX starting presales totaling fall yields on-budget, Turning of excess above fall projects product. successfully investment delivered assets cap of XX delivered XX%. this top remains for first with XXX $XXX and rates priority almost and in basis market to were we occupancy beds cost. million and our development, on-time All with points similar in current

the of community the delivery build our million targeted represents owned future continue the California execution System developer University of campus State. for construction project started with housing community Francisco private of State XXXX. the We on The the in the apartment and developments PX fall within to is first San on-campus deliver lease and to ground owned $XXX XXX-bed

XXXX developments presales. under We with are X.XX% X.XX% and and owned X.XX% million, six for construction currently for for XXXX projects presales $XXX yield X,XXX all between and beds to to in developments and X.XX% totaling on nominal targeting delivery

Disney development this in break final subject campus we In and are World on our million of QX on addition, to project XX,XXX-bed, the permit. final year, of schedule of on $XXX receipt Walt feasibility ground to

of of May XXXX fees. to the of we third-party X.X% construction Irvine, Illinois, on upon to XXXX, University will phase on-campus all progress deliver in completion University the State, phase $XX.X California final first in open to yield. projects on nominal the University regards in million continue of a of we Chicago are targeted four The campuses development With and in achieve development, the generate expect the under Arizona, XXXX and our Delaware to and fall projects four

in XXXX. project to a to on of are have predevelopment University and the deliver expected We of the campus California announce development pleased awarded is The been is in fifth Irvine. we

Turning to the investment market.

see to interest private in investor sector. continue We this tremendous

that both transaction the HFF $XX.X to was sector Greystar With in billion, completed over annual EDR BAML third of totals the Blackstone of the sale third according all-time market to September, quarter the investment volume in volume update. to quarter and eclipsing the

under significant financial quarter to investment brokers are on are the discuss over With strong results. to transactions Daniel contract, turn I’ll of market that, a most the With our fourth of anticipating amount activity. now it

Daniel Perry

Thanks, William.

approximately closing quarter second – the FFOM in of for income FFOM were total million, resulting third noncontrolling to XXXX NOI higher interest line Compared per X% quarter diluted with million third Results $X our fee quarter $XXX third XXXX third-party fully in or in the completed and with the was development. in expectations. of $X.XX reported, quarter the million activity XXXX, recycling million quarter quarter UCI for As capital the $X.X of and due forward of of XXXX, the lost $XX.X share. declined to of approximately associated the of in

in NOI discussed, As expectations. at strong operating same-store our line results but Jennifer with growth, were also X.X% our

XXXX of As revenue to a a of third year operating XXXX-XXXX the beginning coming With academic achieved the includes very mix fall Accordingly, the growth expenses X% off the two the growth the for quarter. months quarter. same-store years, always, lower of academic summer expenses, is both influence and the regard of revenue up. growth the for quarter reduction XXXX-XXXX year, the we quarter of same-store X.X% final the same-store that lease the third revenue academic

significant we third initiatives as prior the benefits in hurricane have As of to as we the quarter savings year well discussed management generate expenses asset the year, cost expected due quarter. this program, incurred our in expense to associated with the throughout control

initiatives September was value asset run debt XX.X% balance sheet of value rate started to to control was expense enterprise the XX, quarter to As From a and as the an to debt total Debt company’s given XXXX, reduction X.X X.X% phase was perspective, materialize. a achieved EBITDA XX.X%. we look times. to of fourth that we current the some in expenses quarter operating operating XXXX, our expense same-store when fourth in increase growth, expect of do of we the in of net

Our floating XX.X% now total debt at of debt. stands rate

As years. expected to late phases our $XXX Page the project will you projects. which plan development fund $XXX be announced developments cash Disney have our flow joint XXXX expect two in capital S-XX million available Housing costs, long-term the Francisco of throughout of of reflect XXXX, see have presale capital State we disposition approximately have we completion of venture owned last debt, a development, we updated to and and of current on million on and reinvestment and for XXXX allocation the XXXX quarter. and/or supplemental, San mix with the in of commencement first the XXXX, million And with additional funding and in incorporated ACE the the over equity XXXX development development XXXX $XXX outside our next Student the first Disney and delivered now hand, Including to we to cash

markets of we capital capital’s of student the of are see attractive from our we recycling the core access very As housing continuation globe of we annual to perspective in take cost maintaining balance With the with seeing an both a around focus weighted mind, demand in a we of from time look cost until and this the improvement capital through that advantage private always, throughout program. equity, monitor a high will our sheet. sources average our environment and on the period, health capital for the will of most

Pages $X.XX consideration the expectations well quarter, the maintaining year, overall our the the question-and-answer of S-XX Turning we NOI and XXXX $X.XX now it diluted and detailed and to fall neutral third changes as With the midpoint per midpoint the the share are range FFOM back were to guidance of total NOI, into per of operator our to the the XXXX lease portion performance the All the outlook. XXXX FFOM to share. Taking of to operating to of start earnings results same-store remainder components the are for guidance as net fully through I’ll S-XX expected and on of supplemental. previous to turn tightening that, of up $X.XX call. earnings and

Operator

now will [Operator begin We session. Instructions]. the question-and-answer

The today go Please from America. Bank of question with first comes Juan ahead. Sanabria

Juan Sanabria

Hi, good morning.

ACE developments? lease be you one, It could there And those stabilizations? drove for it possibility if targeting Just basis those a that think it just like up, anything, developments. yield more lowered Is there’s next looks target question of you’re having on to high-end is a the stabilized year’s so if could you if or is the comment two-year year school be the XX by if X.XX%. skewed that higher points to particular, your costs, in you

Bill Bayless

a the come that XXX in down pointed key the you at high-end five had probably of most doing as rates there out. points. are it that over we’re for would make transaction that, basis range, point if I really part, X.XX%, cap you time we’ve X.XX%, between large of And years. Juan, The the are ACE when have X% of percentage higher there coming is in look last Yes, in point that at look you

of And second the cap cap development expanded. X%, X.XX%, accretive spread so being at X.X%, to question. rates that market yields the those – to have between to look of development from current when rates targeted spread you significantly Also part X.XX% your the

year the year, believe we of in developments the that saw stabilize just to fall saw current come we that targeting at in are all do will online this as come portfolio one you XXXX you XXXX As XX%.

Juan Sanabria

spend with I we if and have at what And that would look million other years, loaded, for the per that, $XXX per million and it next total, few your about or be Great. couple $XXX the a $XXX dispositions then roughly Is years? uses, you Disney of developments in about spread the sources ratably sources. given guess, being year, funded, should some on it’s just you about million front-end that of year of the think over out

Daniel Perry

Generally, needs it of said, could got be the XXXX. as look ratably XXXX, being That XXXX throughout $XXX throughout think, funding million we’ve about spread you of I and at needs.

to be targeting for reinvestment, hand would in $XXX that and/or debt If and free to dispositions. flow cash we’re million the be debt you mix $XXX EBITDA, or leave at on about of the in look debt about and cash equity that to available $XXX mid-XXs short-term million million dispositions. that asset funded from a high-Xs would If debt value, low-Xs, in

So over that to next implying million that, in $XXX be years. the still we million $XXX couple of would

at to to sure valuations. take attractive outlook for at choose the the is given it course, we into of our do expectation any consideration, least, monetize we the to rate will and cap on outlook as Of make environment we earlier or something that not whether

Juan Sanabria

Thank you very much.

Bill Bayless

Thank you, Juan.

Operator

from with go Joseph Citi. question comes ahead. The Please next Nick

Nicholas Joseph

Thanks.

for you already uses the or committed what’s Just outlined current S-XX, to? what sources appetite beyond on deals presale you’ve acquisitions given and your that

Bill Bayless

developments script, accretive this profile, at also. in think, at focus Nick, to X.XX% I investment. attractive getting depending and the But it our as certainly, on one priority it continues in Yes. our upon mentioned company. developments point number to Certainly, absolute time, presale are to market growth William, relates highest the and as can own developments be only of be yields X.XX% the his

Nicholas Joseph

December your how last for to And percentage then year? that occupancy does of academic this leases? XX% the year, beds are And ending Thanks. what compare

Bill Bayless

last relatively It’s par with year. on

the December ending up more portfolio, on with XXX entire we I ended leases. think,

concern fall off that in us traditionally from gives material more to fall be occupancy And our spring of terms would than so it anything nothing is.

Nicholas Joseph

think just overall And rate? is growth its longer-term you growth Thanks. that occupancy midpoint finally, long-term to revenue a is X.XX% now back that good average. rental Do rent run

Bill Bayless

that has Tallahassee, on headwinds No, that. that of I a drag bit think, a mentioned little a have perhaps more little year this you bit in we

of supply say a is a more the I But I this drag bit long-term. to is X.X%, new historical my script be little her numbers. comments rate the with more will year what Tallahassee, in, a which going that Jennifer think comp little of closer to X.X I continues on would in is think, X.X%, is I a overall, your coming bit mentioned XX%, I of run forward average revenue think historical as still mentioned the to XX.X%. in be as tough our

got something basis comparable X.XX% rate And XX that you’ve so potential really of averages, our with that with. to we’re points occupancy growth, coupled historical

Nicholas Joseph

Thanks.

Operator

go Samir ahead. Khanal from Evercore. with comes question Please next The

Samir Khanal

Hi, morning. guys, good

As talk any be at markets your of standpoint of there’s that you the from sit there sort risk of State? mean, the this College some Tallahassee, kind I Austin, Station, may are like in beyond can a that’s at we, other you here Florida today, about time? ones radar supply

Bill Bayless

as mentioned XXXX. supply we in a From better Yes. next comments, perspective, in the actually even feel going about supply than year my I

While I across also mentioned, XX those it’s beds year, had XX that’s of last nominally XX portfolio XX versus development no up last X,XXX the is markets in year.

online Austin to focus go overall Certainly, the X% down than Station, really continue the tougher so the into a we was the that space to as year. what mirrors we be enrollment, barriers up team, positively. we’ve markets rates Tallahassee was of is and thought since from about a have be has from NOI a that good which challenging being continue been we’re there continued Nick the year, I only kudos what public. mentioned in next a last entry last comment well to average at and the Tallahassee set portfolio. again, And contribute little bit – the And supply market tough to the But expected. to – the there, X.X% basis people one year, prudent. as natural XX-year to we mentioned while on as is perform of went same-store to new coming College going XX%-plus occupancy Austin in the year XXX points drag going little in growth

was to the the year, Last whole pleased reach also XX%. Station as in College it low-XXs. market We’re see a down

as have in top you’re growth so And some in. that the NOI. across to mentioned, prior I see we’ll And kick enrollment markets XX, absorption year’s our of in all starting other the XX% of the

more seen as so and content. you’ve through And normal ordinary historical supply it’s

think pedestrian other do the will dynamic absorption for tranche that, pressures. market – supply a really we’ve growth high supply we don’t that Tallahassee than have I curve short-term seen of last the consistent that you we good supply So demand not out have just than shy that year on coming school given think XX, more a years. point it’s is enrollment the there next when normal of But in XX space it’s another versus

Samir Khanal

Okay. Thanks, Bill.

Operator

Baird. Babin go from Next question comes Drew Please ahead. with

Alex Kubicek

Good Drew. performed the do to perform space morning. expectations? Alex you is in core how on looking This them for assets XXXX-XXXX Kubicek acquisition in expect how some And up? lease Generally, for the on color your XXXX-XXXX

Bill Bayless

than occupancy Yes. guidance portfolio, in with of in say, guidance, would expectations. the Four to given expect with operate XX%, right we average, XX% by specific that. our – about but I’ll at haven’t we which line subcomponent is less that right the I midpoint the came And

of XXX for improvement So there, I that. into bit occupancy, room basis of say, would a points build little

Alex Kubicek

That’s Great. helpful. really

XX% supplemental? breaks those tougher for in rate-driven, more you more are is push up lease Do that of occupancy guys given outcomes occupancy provided the kind XXXX-XXXX you rent hesitant buckets on that expect are threshold? you properties growth occupancy the assets, the the until rate of then comps. And similar to assuming distribution the a given under So

Bill Bayless

rate on at you look that out from question. That’s point the were look at – properties or XX% And currently before that our this would year, if bucket. the year supplemental. breakdown first that And on a category of in growth. great I properties the contributed greater Tallahassee Page S-X the all of X.X% if where rental that were you

beds going in above now the of low. the that currently And in was that X.X% median portfolio our of there. potential that the is strong XX% well into a this XX% of next the average. makeup is portfolio, the bucket. XX% including the growth higher up in XX,XXX category above I year little Tallahassee Tallahassee year, say consists pricing in Well, the or what bucket And lower has because or of of would being than greater so That so last

that we bucket of this rate that. is rental up is the about headline hung As any rental where In is get below, it relates form with to number not, what that, and revenue. or one all do the maximization it’s fashion, in on XX%

about But occupancy, believe mentioned up will X% we for in by of the that always Tallahassee. XX% market ended I setting rates below we’re down so that market come in market, we targeting year it. up we that category on And we next bps to and in Tallahassee, about currently. XXX occupancy make market in got

growth- look contributor X.X%. you it this rental when being with rental sorry, I’m the that so was rate growth And at revenue category year, with greatest

And to how really agnostic were materializes. so ultimately as growth that we

that this of that saw we had portfolio it year the on same page type us of up rental in. The hey of occupancy it’s see terms growth. as category through last portfolio this us you good not also in in which that year unusual that GMH. we years, much rate that rental you that had which when saw that, foundation time a we with bought being we so that off gives a to where to And potential opportunity with in back group leased as produce of to into you And XX.X%. that moves see you’ll great XXXX see going was in down you category with XX.X%. future that It make, grow year this saw in rate at And for metrics

that a you’ve that see consistent seen yes, you’ll management in previously. So of category occupancy probably rate versus

Alex Kubicek

up ACC distress were year’s if opportunities road? exist the lease Thanks. exposed And for whether the of to more That’s indications private question or amongst down We really me. any any might whether some those so, One of seek acquire developers. this properties curious helpful.

Bill Bayless

NMHC Here’s quote – all of at by Street. Chris asked There panel. Student Harrison the the there in asked you that comment Conference, they of the Merrill Housing one one thing was visited questions a – was on us if to any my

their of company’s history, had turning lot we’re from influx periods. been a merchant flip horizon. the those – a developer hold developers where and the now what operate at the they more And stabilize to have properties that. with have merchant in on one candidly, now available time or them capital, And in into have to are a of two-year the that old You for three and properties global they equity first into to space, looking going longer three to five-year two years now they

it Our in in years. play into for back operating and creates us were we have when acquisition the attempting in When and the to greatest get come occupancy. an growth cycles and the that we do the were mode past that opportunities create have larger acquisition people opportunities that platform upside portfolios, for consolidation do build don’t to

start the putting three over next, seen you’ve call see in five in the three so those that stabilization had place year portfolios that think are And maybe that to in seven years to seven folks taking cycle, will years years And to funds shorter-term the merchant together the offer with those let’s of you those two the are last see I market. it, some flips. to the in first two going portfolios than to with years to three developers what more operational to come upside cycle, been

we’re the but and will and do upside. potential long you’ll larger do so growth we’ll will for over industry be an of opportunities operational back be come think where And to point game the have we a time there I out And acquisition those cycles see I think organically as And at the plan, us will the investment from road M&A again, consolidator. moment, perspective integrate in go completely trend have and the that opportunities strategic down we that the decades more in.

Alex Kubicek

all for help. Thanks the

Operator

Sandler from Please O’Neill. ahead. comes Next question Alexander with Goldfarb go

Alexander Goldfarb

morning good down Hey, there.

Bill Bayless

morning. Good

Daniel Perry

Good morning, Mr. Goldfarb.

Alexander Goldfarb

I and are the your? how [ph]. Hey, Bandit] the [Smokey appreciate

a just So here. few questions quick

topic quarter’s balance certainly for after you XXXX ability the a grow in was guys and to of on last guys have was portfolio done repositioning. One the you things call sheet the

efficiency, saves. just So this two can cost Daniel, you talk items, but hurricane positive cost also a about some quarter, mentioned, as one, we the was

on cost the how have next X.XX% be going key like sounds So going just rate on two, saves the are that yields where bond we handles capital rather revenue? NOI given side be sense can get to than of a disposition front, like expenses markets would but then driving that midpoint year? are curious you’re for much on dispositions – to cap the assume And sort any operating assets. to higher It

as So XXXX in about if you earnings could we those of just growth? provide a little two comment think on

Daniel Perry

a know share as per certainly to see would we. would like to the normalized that we return more Sure. market growth earnings Obviously,

are ready the we rest exactly next throughout the be point As out. on the of get to assessing call, the here give things that guidance we’ll you as year

the On laid NOI the growth, is side out. same-store revenue

in this from is with lease the generating growth. revenue you’re to months, seasonality the come two X.X% the high-Xs X.XX% revenue that you next up the terms The for the When fall have those just of referenced something that growth. bring you in opening up of You together impacts going and fall. summer

is So of side. the expense equation what the the other NOI we operating can on do side

that, is initiatives. think this over XX% at long-term consider there that. of asset property year expense seen budget. hard determine will this have the from not of are that to you continued benefits the point. or operating of Whether relative management benefits when a lot generate We to those Also taxes We our are additional savings

your same-store keep If X% of operating to of to expenses have around you’d taxes, expense controllable growth to the your you’re kind have growth X%. in X% more rest property growth seeing in X%-plus operating

the we can’t real that’s So, mover that property unfortunately taxes. control the

will So do in and on handle a thoughts we’ll the better for come next our the end for what year here, as of we that year assessments to get guidance. and

the The what second equation we mentioned, front? As we on bond are part where your today. you do is know of yields capital

sources As out our that have at other or we look rate to capital might that bonds debt, floating debt we can of use long-term term impact. an

So managing And we of, interest market to trying for And to also at lastly, idea growth. on generate triggers rate earnings to with exposure dispositions. will the long-term, look the but there. our want pull the obviously, we then what

We manage earlier Whether go about very $XXX is to what more rate though are through the talked can earlier or that reasonable I do the not today swing can certainly earnings. to range. question, to of year we able we needs, looking we the be is or decide XXXX. could of of certainly on that dispositions ahead where do at types on not million is As being whether X.X% a about to in we Those cap But million to assets recycling. that would the like and earnings. want do $XXX and it an have impact environment X% assets any of funding monetize which to

think time that lease of for now come year terms And will a to we’ve – dispositions. always in right we are ahead through how up going that capital this what of the completed and we portfolio we seen drive of in. the harvest the with at markets we So go it’s and the guidance time much out full will assessment

still the to or we about think And whether people a of our $XXX starting part decent about. $XXX will that look guidance. next I call about to give million then we not do is point talked year million going that last think on or $XXX million we’re as for and the

Alexander Goldfarb

on issue. X% negatives growth markets year, an I are Tallahassee, would go At sort and then the pre market that at it’s What the revenue your the X%. lot some of of for is some the Okay. of X% Bill. more the the versus a it’s on X.X%, there’s less there you always improving, over expectations What but next in of to year, school only describe to that impacted. every – something the X.X%? the understand, revenue the to if X.X% that’s low-end, NOI question be range? cause outlook Bill, scenario for spread And a where is second supply

Bill Bayless

the occupancy end up you occupancy on and a minute at throughout outcomes collectively properties lease-up a could I small markets. numerous lower based of you on mean, up in portfolio on the just variations XXX variation, Yes, the as Alex. all at marketplaces, look finish potential of

it’s your those on just situation perspective haven’t to And rate in that level, happen. realistic throughout follow so where range both rare and outcomes. that occur have we a knock very all be to potential rate fall the you’ve occupancy seen wood diminishment would certainly It a seen low part portfolio, instances a of of would from that of

a rate And upon is so, that your rental predicated occupancy, her is XX% the the X.X% with lease are is the that in variation comments to that throughout variation something mentioned much Jennifer X% as pretty up. –

And versus percent those XX% markets as we so, this only mention, supply year the XX the top the XX%. did of is in portfolio of NOI

terms being in with a that is realistic profile one comfortable very within. range so And can we’re X.X% X% we overall to of operate that that the

Alexander Goldfarb

Thank you, Bill.

Bill Bayless

Alex. you, Thank

Operator

Please ahead. from KeyBanc The next go Markets. question Capital Wurschmidt Austin comes with

Austin Wurschmidt

Hi. guys. Good morning,

Bill Bayless

morning. Good

Austin Wurschmidt

a at my consider transaction environment, touch today, existing about extent your a deals probably markets is some rate, cap after to in assets six with implied presale you trading it growth. on the you given to would little the a I’ve right you of with right buy stock the something type wanted number were just to on off got they evaluating bit and selling the the development But talked move stock? trading the start to additional side. today’s the yield higher And I curious allocation capital portfolio, potentially back approach

Daniel Perry

top pipeline an We not through development historically, pipeline that but address. have around you we’ve certainly, got And we was the development obviously you on we’re environment we’ve the to the comment drops first the in, that priority made there Bill presales. tell developments, size remain the a in talked had would priority. that do completely about, The to XXXX, need I list. as in-place

leverage fund And position where back first pipeline. a putting that. assets a complete recycling position recycling to using development make we up get capital so, drive to to from stuck would the sure to in strong be in want would stock We we’re have ourselves a where and then don’t priority our we’re to be to in buy situation, our

focused manage we persistent buybacks discount the And persist you’re will balance health is a we’re is making on pipeline strategy. So, sure the how to develop, fundamental to position the stock that to something of have talking be something to which create on question go going that price. to like about sheet that stock where the in we development a you your to in is always place, your going years when we’re the several it’s and for value. complete can you in shift until see be But going make

Austin Wurschmidt

there. comments seems from Alex’s revenue occupied, your a properties environment, current range growth ranger XX% even you’re were it to the X%. year I’d the that to very like is comments, question, your with to in comfortable appreciate And with, and X% the I thanks. above achieved this speaking X.X% Okay, and regard Bill, say, of

market few little a the of bit preleasing come softer that a this And ultimately, so, that little couple that there than more bit like I towards Tallahassee about in you had in did and setting years. you market will and that prior something, think a the guess, a seems How year range given bar conditions lower like challenged evaluating expected a was the range, reassessing of reasonable that’s you season? versus a of the ultimately it of fairly end little times

Bill Bayless

market up we and moving upon given when It lease actual look to that’s conditions our do reassessing of Yes. for next that opportunity years X.X% very is basis a the something how at in and We believe X% last guidance in those through is year we we’ve the Certainly, current that very we is conditions perform. current range are and the based the outcome. good are two with. comfortable realistic where to market believe – realistic, the real part, being gone in just

Austin Wurschmidt

Okay. you. Thank

Operator

with John comes go Street Please question from Green Next Pawlowski Advisors. Instructions] [Operator ahead.

John Pawlowski

Thanks.

Just sticking with the guidance for next year’s lease up.

process growth X% numbers growth short. to that question supply Just on Axio’s midpoint? curious that the at do short about is, is through X% went supply just and in embedded the forecast you you take Axio’s the The

Bill Bayless

that they our through. have No. in our to to absolute to you everything relation consolidated an in have statements their Axio And take the but projections in-depth industry terms I’ll is example that look and with market you markets that we sure that I just fundamental in in in portfolio. own very operate of mean, certainly, we Axio utilize that a that market data we if give we here, – make rock we by share make, solid data

place assets that XX. we growth particular that what So may rental you is assets in Marcos, State is to that we of mentioned in at and rate our rate the where rental you be look at Most the properties coming and By pedestrian evaluate taking of that competitive our top contrast – velocity own comps which taking San and of the development that ability we campus in those direct at is that Florida close impact and marketplace on look development if place current Florida leasing. in State proximity core is the at Florida are State.

drive street. the core developed a properties more candidly that of of across of bicycle, versus a being coming long San is more in, our of development All pedestrian portfolio Marcos in

by so own week is just year different of throughout mentioned may rates setting week, as velocity. completely markets and of what assets validate the assess the in in impact how process. it decisions program they were our we the impact initial individually two in day And new development LAMS that strategic to of managing last Then those making terms I the utilize by off we day for

the markets is more impact on down and versus operating for that Axiometrics assess market. competitive just with own level environment. great the We our the the intimately the we’re broader determine macro So drill to direct much data in

John Pawlowski

direct you ring this versus set process Is same for competitive you Thanks. in competitively? processed the drawn last that terms it around year year of properties is that wide the how

Bill Bayless

be talked our still did we – year. well you we marketplace. comps. Yes. is three commenting most people They’d the And go the that rate the a we’ll that terms for It where is a solid comp markets one rate to up part is greatest Syracuse year the the next toughest happening our competitors, in And examples last to – they’ll Syracuse. they’re had is of lease where of down that intimate the – we and the what meeting we schedule there’s direct done Jennifer, perhaps how virtually me with our with it in portfolio through – probably That tell in four metrics process Jim that’s EDR Syracuse on the process in with variation rental of end of team markets comes public. if We��re – do. direct And year, most competitive. one one of at was as This the at in will challenging of our competitive the or very times and Syracuse versus analyzed what of we concerned it are is most because setting the that and look candidly, of opinion very or about.

really is it so by assessment. market market And a

why the intelligence and always gives in and Campus data study and this growth. the the at. At points day of to calls tougher end is at where look bit human your and the little that see to is business the you you a data day, Your the subjectivity consecutive making American But to of come has XX years there the of markets. of into end

John Pawlowski

Syracuse, as the at on-campus debating sophomores an Okay. University even And mandates as on-campus. junior mentioned, the push example with just for you for of

Just living currently on-campus on-campus curious – classes? are mandatory upper for they evaluating any of schools, your other

Bill Bayless

far have that public, – been the situations – years and those few those we’ve Not if you look to between. over been XX

in perform this that properties And comparable further well legacy we’re those hurt But is, very campus – that criteria so to are out you’ve is those place. the on-campus are Syracuse housing those the in paramount. that that pedestrian well. people seen are core now across so. initiatives are take sometimes that as housing. are from don’t and location getting our why And is where And doing Syracuse investment we’re we doing if And selection assets in sites because looking are

freshman, policy driven housing a all no from in on-campus us went investment to expectation on-campus. ASU by see our you example, For of largely for

like whether target increasing Community, Campus requirement have housing market a general and own mind year. any first investment University And we at to said focus tenant a a is off-campus a always does. large we likely to the year would our have academic on thing an if an where most I where see on-campus. don’t emulating statement environment we American University so each very even the an We year don’t sophomore just is are on-campus American we and as one the properties base, the like in one it in say it’s because live or that, Campus, first having number Those

previous that so this on-campus. residence we we year more policy, opened adding hall an of see an change residence hall than And was a example, X,XXX for institute, at X,XXX-bed that transaction, we a beds the facility if University, was It on-campus ACE to in but beds Virginia Commonwealth was that there brought online. number were

going a every of off-campus have because we prospects X,XXX those complexes year. year beds to have variation extra Long-term, beating occupancy that three assets this their year we off-campus three in those own off-campus a beds better every owned of of also apartment on. bit We those brought X,XXX because little are

right location. And own the in necessarily so not the a thing when that negative universities that’s assets do if we right

John Pawlowski

Bill. Thanks, Okay.

Bill Bayless

Thank you.

Operator

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

Bill Bayless

to for to I joining Campus us did discuss a our Yes. results. you team. American we QX thanks We do as thank the give want to want special

XXth again As again we’re anniversary. industry led and delivered celebrating all and always, once you this it’s our the also fall

And out we the time. so Thanks with November so We the you with look best-in-class thank put hard you’ve want rest that made of company. decades opportunities much. forward talking that work to in for visiting at Campus have the to NAREIT that you American forth at I and have the of about you

Operator

Thank has concluded. for This you attending today’s now conference presentation.

disconnect. now may You

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