ACC - Earnings call transcript Q4 2018 | American Campus Communities Inc

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Operator

Hello and welcome to the American Campus Communities 2018 Fourth 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] Please note this event is being recorded. I would now like to turn the conference over to Mr. President Markets Vice Investor Senior Dennison, of and Capital Relations. Ryan ahead, sir. go Please

Ryan Dennison

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

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

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

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

Bill Bayless

operating on now the joint completed rates some which partnership further attract has multi-family. income Ryan. Good first by our growth Housing Operating our growth thank construction also that cap both XXXX year our and one as continue globally. full Overall, Student Industry on Thank the and all provide William fourth will as the and we that capital the company, the attractive prior morning venture Program, at values up the color a a remain to creating recently turn results. brought financial value making start over after our the another you, revenue for we to it to rental and us the within we stability Jennifer of on drive operating sector believe we stability will in strategic quarter to economy, ACC year our forward net make business industry. of NOI and of of to the most the revenue successfully you development and the our during commenced cash with opportunity core evolution billion Housing for year in consecutive demonstrated XXXX rate, of I'd over pipeline as now like I'll accelerating joining and Disney one results. our for rental to despite year. of discuss year testament $XX Officer institutional Transactions look globally. healthy continues to and of for to Student same-store to IPO. the within opened as par and team Allianz XXth in exceeding our thanking The source XXXX housing investors uncertainty discuss our Beese, we College year domestically that, flows record With with during Chief the fund operational growth sought XXXX fundamentals compressed macro investments consistently since another are have for we reached the

Jennifer Beese

Bill. Thanks,

now of pleased growth the since growth our another the IPO rental marking rates, year and are to internal revenue, consecutive report NOI. We rental XXXX year same-store of XXth in

S-X a reassessment several revenues markets. supplemental, increase an in and property same-store increase by property operating expenses X.X% by anticipated increases in page in quarterly taxes was due increased of driven X.X%, in on seen As primarily of NOI the to X.X% which on

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

controllable management efforts Our asset of resulted in X.X%. operational annual expense growth and categories approximately for our

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

for place end lease takes term end up. academic well lease projections into guidance of the Our the revenue as as our XXXX-XXXX XXXX-XXXX year our leases for account

academic the store and year fall revenue growth for to based same of occupancy XXXX-XXXX growth. projecting the are rental rate We rental of opening on X.X% X% combination

other out of growth the always lease fall initiatives and our income up risk low ends short some execution coming guidance revenue our leases, reflects leasing high term As are backfilling projections. of our and

X%. in categories. Property expense continued the of are side same taxes, growth than the expense level in XXXX On budget The in our at as in lower inflationary roughly to to contributor of XXXX expense we driver of in same our the largest our expense meaningful is largest reassessment most the store was our anticipate the increases expense XXXX. XXXX seen category XXXX. growth majority growth expectations not do It be growth

Turning to what supply, remains we rate consistent on call. environment QX with new the our discussed

or much XX those what fall line Of enrollment was fall this supply supply no For are the XXXX, with of XX,XXX of markets XXXX. with this XX in delivered concentrated we our X.X% new significant new long-term last ACC we year new in totaling projecting XX markets The markets beds less approximately in new than in is year, had supply XX year. are supply tracking average.

market NOI supply markets as new receiving versus progress represents total largest to last I the ACC’s is to average will approximately now updating turn number expected impact XX% discuss from year. year. over XX% of market XX% year’s call a supply We new concentrated as the year. last activity. from we the beds decrease investment XX NOI of supply to to perspective look As through the forward our less per an is This new new also William

William Talbot

Jennifer. Thanks,

the final phases expected be ground May delivered the lease first Turning with beds will community delivering square amenity but the a $XXX the and development are bed development, years College that five include square Program. multiple will completion May over The following of million will executed Education nominal XX one first and broken produce will Center. development our upon to Disney foot The X.X% have of phases XXXX is we foot XX,XXX to stabilization. yield in on XXXX. in in project and ground deliver centers participants phased XX,XXX two to first the phases, excited Disney XX,XXX phase Subsequent expected of the serve XXX

executed construction and California, sheet under regard Calhoun third first relied the on now expected has California a to time X.XX% first Irvine; this beds With developments pre-sales X developments on all our for year. X.XX% third are between their continuation to ACC-owned additional redevelopment to XXX California, for since targeted The phase of deliver balance The X.XX% progress in All The are campuses to ground a State, students between this also on Arizona, With of XXXX. has The University which Riverside; to that in lease first to in bed deliver and owned XXX upcoming on-campus XXXX is expected our currently bed, began University with XXX under academic currently and X,XXX yield. Illinois, communities excess phase we projects or Hall nominal XX% projects community Health stabilized traditionally five highly at Sciences residence year. opening of XXXX. million in are the We program X.X% year University of preleased we $XXX the XXXX other achieve between to an is for XXX housing. party of for progress, the developments, and construction the The housing and their yield Southern the the February five year. $XX deliver occupancy own of honor to totaling and persons Chicago; a ground year five all with the waitlist academic honors With the excellent ACE million in XXXX campus. fund Fall successful third in University, construction party are targeting new is development The lease-up University three expected development, Delaware break regards house seen to Drexel developments used currently to and will academic Drexel expected bed pre-sell we've the on XXXX. to party ACE time of an average project second is on development. University The on had of project phase of

XXXX for investment Turning report, to XXXX volume increasing continued rates. acquisition a CBRE’s I'll to remains into investment year It XXXX our quarter Housing fourth venture product that, According very assets Daniel totaled over despite rates noted a billion three trading resource the existing widely Greystar economic of Student with to of in the interest student sale that of at be financing the year-end and minority Housing during if by in core cap for in interest a rate, cap on Student to joint available. record properties Greystar year low abundant X.X% X.X% cap discuss to results Investor guidance. economic to remains strong sale rate. our is housing turn financial rates over it With at compress interest strong range, and continue should a in assets to XXXX numerous Blackstone the the X% produced including XXXX, rate transaction our transactions highlighted $XX pedestrian EdR. market, Cap sector. of another compress cap of

Daniel Perry

the quarter Thanks, William. our reported FFOM for $XXX.X of results diluted $XXX.X share, million of full FFOM or was line midpoint or share. Last night, per XXXXincluding we the fully fourth final company’s $X.XX million fully This of year diluted and guidance. per financial updated in with $X.XX

X.X% same-store beginning guidance a XXXX strong that As X% revenues and in new of store was acquisition XX XXXX NOI for the Jennifer in the expenses XXXX increase fall X% guidance with new resulted this XX NOI properties growth Their original in the midpoint store With our results end by and opened of in development the year. was was to same-store original high presale which in leasing same-store our year discussed, above our within at basis of performance driven the group. of regards, fully development our increase properties to properties, total combined points provided for stabilized. development and

expect in both an to higher and look see acceleration relative we lower to by same-store NOI we driven to As XXXX. operating growth expense revenue growth XXXX,

to Moving capital structure.

rate As XX, debt was X.X value to the net times. enterprise to was XXXX, debt total of run was XX.X% company's EBITDA XX.X%, debt and value the asset December to

capital As ratio refunding We Disney our remaining anticipate through commenced capital, the be as debt, phases million next assets S-XX. development update XXXX a to the three funding high-Xs project we see and S-XX and available to net supplemental, development well will delivery $XXX the and debt The the for the reflect you XXXX venture reinvestment, on construction on page funding EBITDA we of over years of funded of plan in total additional on ratio long-term with allocation and/or have for of mix projects. through mid-XXs own equity cash on delivery joint the a as the and remaining earnings page maintaining debt million $XXX the our in disposition low-Xs. to in development to pre-sell in additional

to in million million completed million of of credit properties. term-loan million Our a and The half approximately the includes the line interest increase to in and of from year. the in in close $XXX anticipated plan existing for proceeds $XXX XXXX $XXX billion capital our already joint dispositions a sale minority from $X new second venture $XXX to

continue XXXX. on the risk early for likely We an into To size. half have to offering, treasury expected that have unsecured we also XX-year in plans interest issuance issuance, on most rate bond entered swap mitigate a

to range have of an our outlook, we guidance XXXX earnings turning $X.XX. Finally, $X.XX provided to FFOM

accounting You up can turn each historically certain operating under is earnings item forward and These year-over-year the be guidance. show of to approximately to One our have that sure you billion not and of to in earnings $X are lease is following, complete consistent of specific get on our have which standard impacting expected to new new going the S-XX were S-XX components initial guidance supplemental I'm marketing our all details the leasing that capitalized. been we and will XXXX costs in expenses store XXXX. expenses in starting that expense

costs X.X% in NOIs our driven line X.X% expense street with Excluding consensus. revenue been Other X.X% have are as to to the property and guidance operating midpoint assumptions at share X.X% FFOM X.X% some to growth increase that outlook the $X.XX of follows. would major X.X% to in by growth. per than Same-store are expected these

growth fall midpoint the the fourth summer rental for semesters experienced, X.XX% we XXXX-XXXX range achieved same-store to from which contribution finally, of quarter seasonal revenue and first to XXXX as to And academic will past targeting lease-up. Our revenue the X.X% our revenue third part third our lower and second typically second we expect quarters. see contribute the impacting rental lease-up year a the growth quarter revenue into growth quarters. we're includes the this When same-store growth of the move and

represent have same-store total Our and are tax the expected most fee ACC million during party salaries XXXX. This relative five benefits, is third-party XXXX awarded range with of revenue together notably to guidance in XXXX from expense taxes $XX projected developments moderation and driven due are X% approximately less projects expected Both to which significantly reassessments included expenses. property growth increase experienced operating primarily some X.X% growth by to in property XX% to over in the in million year. $XX the impacts includes year. in for Also third in to range the is to of close that been three and to

over detail guidance taking Disney our in delivered service. year taken are housing the as offline our in noted slides internship the As supplemental, this existing into management is of Program they new facilities College at Disney until we’re housing,

an of to by for staff expenses and it portion of revenue as that back the of required estimated As operator the Disney With the existing third-party reimbursement the part are costs. both cost turn increase overhead I'll place the result this start and will stay management question-and-answer ACC call. reimbursing million facility's $X.X in to in to with the overhead those agreement, employees, perspective from we a accounting

Operator

Yes, thank you.

question-and-answer from We Bank this Wu And will now session. begin [Operator morning’s Shirley comes the with first of America. Instructions] question

Shirley Wu

given that what's your So elevated on you into guidance? far so differently at assumptions your XXXX experienced with going what FSU in supply and guys you've experience to plan the included doing do

Bill Bayless

fully didn't catch it that sorry we Shirley, question you can restate I'm here?

Shirley Wu

Okay.

FSU, at you the record to So the given supply. elevated have like track high some with schools supply of a like quite

guidance? on XXXX So assumed have what how of and do you differently going you plan doing much that into in

Bill Bayless

quarter's long-term concern Tallahassee in us. for had [indiscernible] coming of that’s a was about doing of do We revenue that the were overall early, with and overall year given we the in this perspective our From to in, our long-term Obviously in guidance call, about well an than consisting will year. a investments in of are comfortable yields. given in is still plan well Tallahassee certainly I in Tallahassee obviously this we’re very last short-term supply rate. we extremely year area want little that conservative one the marks but is the last but a they is supply rental new X% a the to talked our coming overall Yeah X.X% we the It's of and little growth say meet think bit guidance on market over

Our velocity is significantly outpacing last year.

so, And in a do we we we believe will okay assumed from are guidance. position in Talla that we've our in what

Shirley Wu

Got it.

to that so so, Disney your quick And to program.

pivoted your interesting traditional mainly to front getting front guys that the or the What certainly you fin development. into housing from how have Disney a about – are business. terms corporate very in core? Is thoughts it’s of housing your So

Bill Bayless

Disney of we pivot target a we very are corporate the housing are as Disney. considered and students at the indeed housing that us natural It have for the given employees be history. Yeah, are Again would these same that while serving Disney been company's students that. was throughout exact market

it's so, folks in to university some we’re cases exact attending old, case, XX in that – the And the serving. XX year same many it's same already

so, design, development done that the the with of developments ASU Disney Education design, college And Arizona. Northern exactly is plan a on at the Center Arizona, all from University floor programmatic we've Honors a from of par

so, And very pivot. is a consistent it

in sense definitive great made haven't for commitments nature we program. it this made a time, us and or any at beyond So explorations point that of

Operator

you. Joseph Thank Nick of next the from Citi. And question comes

Nick Joseph

growth you be. and what you sell revenue I Thanks. to on [ph]. BINleases December that given How in when expect were successful U.S.-Middle tax mean

Bill Bayless

really good Yeah, year Nick was It a us. for

market. causes bit price notation in that about little then short leases. did we the great those nature market basis December the we basis of because did I X. the either revenue market additional very January. we the cause ending or discount team is to in backfill, sometimes about the in are at we would points of an when candidly job. to good variation rental make X XX XX point than one of on and last basis They’re had ending rate diminishment leases a As the a Also typically XXX we of backfill rate term We successful at backfilling see from were to mentioned those seasonality diminishment a points rent a BP The the leases more them very premium what backfilling. That’s XX typically oxy December why a on you -- that expect prospect wouldn’t and at the call

Nick Joseph

Great. expected in Thanks. then of the And you Where you expect be what’s XXXX the the debt EBITDA then off to of discussed. and spend capital to development XXXX at sources end based do year? of the net

Daniel Perry

Yeah, Nick Daniel. this is

So we we’re just under we on. both have because look XXXX for not at, committed look you if really I construction XXXX XXXX mean it and at that development

you’ll it’s and with quarter And we on the so spend have of XXXX for amount when a funding notice $XXX had we our about have of look we page Drexel last less developments. plan when And spin than if the of throughout capital look million funded converting deal. that period and third to one we party also development the that pre-sell time development in delivery hall to be also buyout redevelopment Calhoun we at our

reinvestment. funding hand about year in $XX of about cash on through took million available as worth free of but that the $XX funding So $XX at million, $XXX obviously cash for out have go flow a we million, million you development

be fund of million the debt or disposition is would capital or capital. equity as expect our about that and via $XXX year. remaining through dispose in of $XXX $XXX million of we of for our combination of per we where plan a cost million debt and being the is dispositions of about to million $XXX equity include that with Obviously capital Beyond today to intent equity

of We to have range this well million we midpoint, disposition at for $XXX capital the in $XXX a have million total year.

proceeds calls I’ll and better growth earnings to our to thing provide been other as trajectory. disposition coming intent of recall the developments with consistent last in we’ve online talking you more disposition, out about a time better point The the that the couple

the planning development quarter EBITDA capital NOI the third So have match we from and of on year timing more each a occurring deployed. on are you more -- of those raised and in timing and the when capital between comes contribution transactions a

Nick Joseph

up assuming and guidance right? So just that, but of so of the $XXX now dispositions debt. equity. But Is midpoint, combination right million dispositions could follow-up is $XXX to million the guidance that to assumes at about that on it is be and

Daniel Perry

two No, dispo years which actuality in $XXX no, what we so it or would expect between guidance years, this the and of equity million be $XXX our is million year. we over capital, spread next for debt two and the

Operator

the Wurschmidt Thank And Austin KeyBanc. with you. from next comes question

Austin Wurschmidt

joint and appetite taking for Hey, curious continue first guys. does ventures look partner much do they disposition side the question. just partner get how potential any have capital I'm and Thanks on the to your sales? to on

Bill Bayless

Austin. Hey,

[ph] joint with appetite platform. an venture So partnership to Campus. that grow greater They do American entree as a into have a

partner However, any exclusivity resources look when available other at established certainly with have to as any look them we but growth. fund not capital our our or we to first them do look, would

Austin Wurschmidt

And guidance, how just the cap sense what can your that about cap fourth remarks be of that our had you will Thanks. in rates shake you've out? trying should And of us and understand dispositions prepared thinking much was you a further in from rates give mentioned then to in we compressed assumed where I'm the quarter. expectation the

Bill Bayless

Yeah.

and specifically rates noted think the low overall pedestrian those We about we ACC you X% more, cap saw cap rates trading transactions saw saw our in As with you look the X.X when continually compress importantly you and more of line a X.X. dispositions. what really core in

range. And out in rate venture capitalize look as core were cap look range. saw low X% similar You certainly with transactions our or expectations line other of that some and that low assets, are our X% that to in we cap rate pedestrian

Austin Wurschmidt

leases I for do what growth percentage hand have that term? how breakdown, then subset Appreciate was you was that. fall far know a – And separately, off leases our of just revenue the curious assets? what XX-month And as XXXX-XXXX the of as

Daniel Perry

and Daniel of give being NOI, miss We XX% in have any revenue, was and that it, correct when at about and our a And residence I I answer there, one. of represents sorry, you could Yeah, believe look correct the QX give hall our XX it residence month hall the properties, at proud replied me we look and numbers properties. please, rental, and of fit had saying our great my XX% great we of you Austin? actually was what off, – our revenue. we our -- mic are hear growth

Austin Wurschmidt

Yes. Yes.

Daniel Perry

Okay. XX X.X% academic properties on – month revenue We XX% apartments. where and and the the from the month X.X%, at XX from were XX% growth were an rather year that apartments what month call coming XX XX% year from would property the coming so academic the lease we

Austin Wurschmidt

XX% X.X%? and at So XX% at X.X%

Daniel Perry

Yeah..

Austin Wurschmidt

helpful. Great. That’s

Daniel Perry

about thing first roll-off year to that students transactions continue. products residence would so the we are for that just that in lease now little hall that as are we are majority started – awarded is about the QX two residence seasonality years variation being we continue year the especially one apartment leases this that and say, hall a about And ago academic talking see of you'll leases on ACC we and talked those in

in. And that potentially will aware so to be come that a to just something that trend continue that's see probably

Austin Wurschmidt

leases the over when – just seen maybe several quick back years outperformed historically last those XX When month you when leases look historically follow have XX … you back up the look we've month one

Daniel Perry

X% residence majority break into you've two We be to coupon see performers them our House that residents you the in would two tell are them of up assets in over the break of that I growing on-campus in pushed and would best the got X.X% that have you You to that with long-term. and couple rate more some flagship always Austin last those cat assets Station. years. you the coming are rate Galloway the private halls that the in X% – that and profile of that been properties have Those long-term got your the clipping that have arena, area growth. growth normalized X.X% being over two revenue a assets amount two to to of five be of consistent would categories, College our are expect legacy on-campus a of to where the over off-campus, revenue halls, into only

Operator

you. next Khanal And Thank Evercore. with from Samir the question comes

Samir Khanal

what Bill you of to you gives the X.X% If X.X%. Good the you'll end the midpoint go hit able that confidence off the to morning, Hi. be back historically provided that guess I range I lower XXXX for expense in with guys. or started or XXXX. Daniel, right you've

You the from that of me a kind the situation. hurricane. higher end range. kind the hit of X% then exclude was of math at of at kind impacts I X.X% kind was and right, of the the you XXXX you high similar was It to my it think serves of end when range

color how it? around and expense growth you're thinking sort get about trying just here to of So

Daniel Perry

And at growth is midpoint ultimately X.X. look versus Yeah, a you as Daniel. hit of XXXX, referenced Samir. you expense we This when X%

the points relative within to year, good of were basis expectations. XX from we pretty So performance to which consider we beginning midpoint our a of the be the original

valuations tax with by at over that's midpoint growth. X% improvement our came with on have XXXX As reassessments look our we fully is we the we really that we but advisors, do believe a of operating some into it that already lot of pretty our tax we a now a property we XXXX. we same-store, into number big albeit a that in assessments close and expect few growth built year for growth advisors, this XX the our our property the expected reassessments high basis expense you X.X% year, the moderation point saw for tax expected have that new consultation based was in XXXX XXXX in to where markets We a that going expectations baked a for primarily in it’s driven have for this XXXX year

where know a We increase. taxes. we example assessment, in have increase our in we had very $X For already million Philly small

that with confident pretty So X%. we’re

is incidents and area that in higher our growth hurricanes, build costs, year like that better to in instant this allow Incident other and past we've expense related The to caused to response in has that happens other the some for related tried Response budget. really

so about And growth it. feel in and that's pretty our so we X.X% good

is other payroll. is focus The for that certainly all industries area a

my we’re As year. I’ve X% in growth remarks this expecting payroll in said

in I we to remember gives to that we in well XXXX think against you increases. payroll room be came at us perform like any X.X% If feel able that

payroll, of any great for our than We also can may know management level. you at that or more not to existing employees pretty lose. you employees mean do are certainly new talent replacements any have a those our than, Track that we expensive the aren't bench of that good is be you Inside property need imagine I system provides

So pretty as we feel well. in know those numbers confident you

Samir Khanal

as does mean follow-up as on sit – you think. how you I next in any been reassessments have exactly of of I I instances would idea sort are the there could have a Just months, there But, the… any a that for come up. that, there I here mean reassessments, surprises pretty today, I work? good are the mean that XX mean

Daniel Perry

Sure.

Samir Khanal

your and later of months three came those know that you where or sort numbers. past up six the later months In impacted

Daniel Perry

You know get surprises. do you yes,

get surprises Fortunately, to average because know out you the positive. tends it you to

it We We So our X.X%. you at came what taxes property at relook know in when XXXX, it was revised X%. for in expectation was to you X.X%. original

there band ultimate tight of growth. So pretty

for multiple are out. pretty combination what able taxes pretty know they're with those actually so, good And up able give direction us turning project in that use to you to and that experts we property our in-house advisers to ends we national we close have

Samir Khanal

for guess what your like pipeline last look guess Okay. right And now. one I presale just development I me. one does

what XXX two to look the got You've Flex of Franklin. XXXX? projects and the beyond the off-campus pipeline the I mean sort does

Daniel Perry

You rates. know know capital something for always is say of spread getting we're opportunities. look allocation still in us own points current at we basis with cap development you know we on the that's market concert to our our where that priority It first is XXX you overall

our we're but there's going them very allocate priority. And in always growth as against selective in opportunities. so, the number highest pre-sales, and priority pipeline we so when execute not good, the out them with it our good only to opportunities allocation, analyzing capital choose line something that development, forward we and it and but concert with look sense is there, profile up at our have that's and makes the We one development we our is own and

Operator

Thank you. And Bernstein Capital the Daniel next One. comes question on with

Daniel Bernstein

just ask to want about recycling I right. guidance for All the capital XXXX. Okay.

number some just strategic $XXX million a especially You XXXX rates light decrease been in decrease to bit guidance recycling of you've and be in that of is cap a in did -- some the cap maybe needs? rates the would $XXX, there -- out matching Or in just Can is sales thought you is recycling? decreasing higher? XXXX development over quoting the is other XQ that on that XXXX, little

Daniel Perry

year the Spaces you Core if Yeah, XXXX. on going XXXX, two three XXXX, of XXXX, terms had that in of given part you’ll did. bought We agreed – with amount it in we Spaces in recycling, of of or that was into really in we were of the fall part of tax at that entered look fall remember their it things objectives. Core funding of a part it partner in When to and funding transaction of we XXXX, we fall

venture a talked and had about we XXXX Spaces $XXX proceeds is entered so we in mechanism produced in funding was that XXXX And did that billion that transaction when that about. into Core that the we planned for joint it

additional we We to place wanted but that gave five-year less anticipate front that looking do for the place developments committing development have year. capital came year, year it everything puts in and a million the get we there. from and at a so the in position match didn’t now Disney beginning a $XXX guidance the project now and an when the better project That's so also little the each to on together we're end, a during really perspective the of and did with time care felt we we actually we that so delivery of taken dispositions and to to of that of at timing in with us do it trying comfortable

Daniel Bernstein

Okay.

the up otherwise the too, for development maybe acquisitions it’s but reason some So matched? would picks of kind if

Daniel Perry

at know balance be time where where sheet look funding our timing If Yeah. certainly about We bring to with wanting of more point. comfortable growth talked our to cost better match about you a strategy. to is, of would earnings we've will something move intent is that's and more this at stability trajectory and matched to we feel, we picks feel up, but at capital development the

Daniel Bernstein

sought or and as House NMHC you that. looking investment a investors I just trying developers potentially of are date, any sizable at seems mentioned any besides then And partners alternative like so, the to and like out, said see to Okay. out and selling a it you lot Student assets for have and of family at -- capital expand sought source out at

Bill Bayless

we to folks that has we're There pleased money do years with the relation years Williams The for love They it plenty be that very the opportunities would yes. yes certainly said with five answer and of to to last venture exclusivity three have not to so partners. there terms and Allianz. of continues is been, joint attractive, had first our and that at but in elsewhere cost that for look is enjoying necessarily opportunity look, more this someone capital much have unless reason relationship set of but was of to no those or certainly are sources. point no us shortage a

Operator

from Sandler O'Neill. comes the And you. Thank question Goldfarb with Alexander next

Alexander Goldfarb

Hey.

to there yet side the taking on the the for equity maybe address guidance you're anything at comments the funding. appreciate is XXXX I XXXX, capital So that for early an In maturities? stab budgeting

Bill Bayless

of our as closed pipeline. match we talked expansion debt of size an a from revolver development on the already up ongoing have to about is we what we more with our standpoint Well,

as from in kind We my offering said multiple that our in the loans are perspective, swap this you looking for remember to mitigate fixed into entered I XXXX commented in probably of as treasury also early paid interest bond that half XXXX any in in another we interim. the with XX-year of do transaction have proceeds we a From term-loan to off second of the at doing – a prepared year. funding risk half remarks. We rate that had also term small long-term And a rate intend do – we activity. for I disposition

Alexander Goldfarb

just like spaces on on development fourth you another one spaces date quarter, but the to it that if by core – is which with out million, there you to spent take that about on pipeline else funding worked overall the down $XXX how looks on development just or literally the I Is out And think core the million, the the same. then budgeting side, developments? going shrunk took the the just happens was $XXX something a be on stayed – amount something going the

Daniel Perry

because and Net-net million. Calhoun had the paid I on about $XXX then it went $XXX Drexel million the think was million out. the spaces $XXX million down you deal you come $XX It core still

that's change. million So $XXX the net

that So, no to other last continue real from changes we quarter, obviously, than have.

before. at If it that should pretty by else everything with you funding consistent disclosed look but line be item we what occurred

Alexander Goldfarb

trying having Is there there free will? a on more you gross about to from you're maybe asset a discussion the be, and do final conversation you there's dispositions looking what then that something of equity question, flow at much a to And development, maybe sales with less or that side your total few sustainable you of to it to so better becomes and annually through that amount comfortable way, versus need and in cash on XX% been a the better up. sort target job your match more if deliver something seems you're side bigger that to or gets the assets source funding funding of a have so guys just looks Okay. seeing it be commitment

Daniel Perry

We’ve look something capital the quarter to with is six pipeline what low ability discussed board. per we’ve appropriate. always the a above – attractive at fours development, year, we that our in really we in a historically the about assets talking tray. talked When you’re think and development into of mean, X% about I recycle that’s

have we you bit. to to We so still capital cushion, recycle bps And that start to strategy cap at. Even see, that see XXX are and what reason any capital between almost this over were little allocation what back can now at and change we right at if so spread point. looking tick you develop much we a don’t can up rate

development remains, to us to so that and strategy of be continues make as assets kind attractive to we our that sense continued So, think X% of well.

Operator

the next Pawlowski Green comes John from Advisors. And you. question Thank with Street Instructions] [Operator

John Pawlowski

are it's tracks seeing zones. away foresee of and of a on census of still you know your U.S. and opportunity a in Thanks. there's low from William, any you There college for very uncertainty. around supply question Zone I a development? lot a Do early lot Opportunity markets income campuses.

Bill Bayless

are. We on our overlay the our and really have Opportunity at one looked really really the the Zones But existing and entry focused we to initial back barriers Zones. markets if all existed is how the to the, criteria, things go of prior to that Opportunity specifically you they within where investment

looking as the supply numbers Opportunity been Zone people overall by in see that we've haven't So, evidenced that's at dictated that increase while Opportunity we by an the supply Zones, we seen today. really driven

John Pawlowski

lot for to footprint? a of around raise and money around in pitch seeing plans you your Are floating books

Bill Bayless

student the housing on really No. Not side.

John Pawlowski

market other question stock maybe you goes on, financial with I then if if flows growth ahead And the to next for you by what in in sensitivity systems any what pricing rental your color of historically XX% just you’ve sensitivity a financial of estate be will Jennifer look just rate rate instance, seen you're the some could Okay. go ebbs lease for types the markets. or more of any, real but rental for could up, know versus down helpful? terms falls on it flat to the like? growth stable and market Does sense provide

Jennifer Beese

must I'm but say I how you today? a question nervous little First there, are

Bill Bayless

Jennifer No could. at the look answer it. table Anybody

Jennifer Beese

see not now in time. fluctuation at any do this We rates right our rental

Bill Bayless

flows. evidence we cash rental our change long-term rates be in you if major the our continued we've the through in a look the would XXXX seen consistency most saw recession whenever environment John macro the when certainly great it Yeah, and you and greatest XXXX, saw XXXX macro throughout crisis

university And history that have impact – just hardly ever comes Denver little and was before macroeconomics only is market in demand, in down of out variation or that seen it the was today. don't back and company's at supply the has it the and early Colorado really XXXX, play Northern tend the in in a modern student to so it And the then submarket. time we Austin at it to ever and Broomfield supply the you and microeconomics XXXXs see us. really of back if the and go we University levels each of to that and got which housing XXXX the Is

multi-family not see built a students campus. you'd But But softness purpose back see the have impacts the distance of seen in multi-family, we there when start didn't product somewhat have and XX walking is to last market years more some would this to impacting, You in that them. at it shadow all. was

Daniel Perry

to can there. And on if Bill pile I

scenario you're that's think pretty If about you perfect go back XXXX to a and XXXX I John. XXXX, the correlation asking

– in of – is And those the revenue lease each fall for XXXX was this years. really XXXX in X.X%, – opening in and so X.X% good then it revenue same-store of really growth. X.X%.So, was Our growth was and in is XXXX this it up

Bill Bayless

don’t do If for you really recessions, when but we they group happen, tend to well.

both some occupancy. it, period, dig part thing combination throughout it back that of You it The growth the of Student go know some had good so and of was occupancy, positive in we right, that's you of some that's Housing. was occupancy nice rate if time a was and of

John Pawlowski

demographic a it’s wave guys back XXXX, XXXX, Sure. would be, at environment. push you the now your and back firmly XXXX, there Mild was slowing know

Daniel Perry

the at. at go this at seats. the demographic look is The and across to demographic institutions of that premier the get at of XXXX serving we're to you look is what college, XXXX institutions and is but may year be available we're to to the When competition operating enrollment where you incredible Yeah. that not there those olds America the amount for are rate students slowing,

several for. that's of any not and years, look our significant our about flow back students Texas. the things gets the macroeconomics, seat impact, Top see consistent the of last international every backlog you been you at a have And at seats institutions waiting over A&M get talk there so across when Tier state and and is we X% across UT, X always into that America. these know The do concerns filled of those high student school institutions home public for We population, students

we So, power side a the historical and see of equation that presently. the supply is risk the not buying truly student nor the one of

Operator

for Thank over you. would And session, this concludes like the call to any closing back the management turn comments. I question-and-answer and to

Bill Bayless

been results. instrumental and have at We our many solid would in partner you of lease-up Inclosing, the to that in shortly thank team conferences you the stage with our every XXXX our who forward investor anniversary, partners we like into member, to very they much. like sets especially a first American team thank Thanks for XXth what last year to university years. Campus look seeing our to vendor produced, the April Also success all successful XX Fall being over XXXX. growth in every and entire for upcoming talking we so of the QX the about accelerating

Operator

concluded. Thank for now Thank attending The is conference you. you today’s presentation.

disconnect may lines. You your now

Ryan Dennison	SVP, Capital Markets & IR
Bill Bayless	CEO
Jim Hopke	President
Jennifer Beese	EVP & COO
William Talbot	EVP & Chief Investment Officer
Daniel Perry	EVP & CFO
Kim Voss	Chief Accounting Officer
Jamie Wilhelm	EVP of Public-Private Partnerships
Shirley Wu	Bank of America
Nick Joseph	Citigroup
Austin Wurschmidt	KeyBanc Capital Markets
Samir Khanal	Evercore
Daniel Bernstein	Capital One
Alexander Goldfarb	Sandler O’Neill
John Pawlowski	Green Street Advisors

American Campus Communities (ACC) 20 Feb 192018 Q4 Earnings call transcript