American Campus Communities (ACC) 23 Apr 192019 Q1 Earnings call transcript

Company Profile

Participants

Ryan Dennison	SVP, Capital Markets and IR
Bill Bayless	CEO
Jennifer Beese	EVP and COO
William Talbot	EVP and Chief Investment Officer
Daniel Perry	EVP and CFO
Shirley Wu	Bank of America Merrill Lynch
Austin Wurschmidt	KeyBanc Capital Market
Alexander Goldfarb	Sandler O’Neill
Nick Joseph	Citigroup
Michael Bilerman	Citigroup
Drew Babin	Baird
Samir Khanal	Evercore ISI
John Pawlowski	Green Street Advisors
Daniel Bernstein	Capital One

Call transcript

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Operator

Good day and welcome to the American Campus Communities 2019 First Quarter Earnings Conference Call and Webcast. All participants will be in a 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

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

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

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

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

Bill Bayless

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

As it for X.X% NOI excellent marked on-campus prominent their RFQ year. We delighted master process. serve selected partner, also same to another having an you XX% one earnings over share development yet Cal award, same-store on saw competitive as last by highly to over Berkeley quarter was growth quarter plan prior via core the were night's housing been with strong announce press and the of by per performance growth release, student company,

results. discuss we'll Company. university, With world's best-in-class public and Jennifer that, over As Student structures. of in, new multiple X,XXX our expected world's believe turn will variety I'll this on as over Housing our substantiates from the further position transaction to potentially excess is beds William and jump this to ahead go right of a discuss, number in provide We utilizing the it to initiative operating award phases, campus one their Beese

Jennifer Beese

Bill. Thanks,

our expectations, since highest exceeded We XXXX NOI growth, XXXX. same-store quarter coming at first growth pleased that results quarter operational our X.X% are in

was X.X% of due The decrease year-over-year decline other rental Our which in partially quarter. this to income by growth, revenue reduce utilities and expense the offset in other income. growth part revenue reimbursements to in correlated reduction consisted X.X% was utility

call, QX As rental May leases expect and our communities. moderate to on backfilling res revenue apartment last XXXX-XX result our year we our strong that at in May ending a contributed QX as we hall during at leases properties growth growth our academic discussed the ending of the of and

in Coming growth taxes and pleased only total very X.X%, are of excluding the profiles quarterly the reported prior first the year insurance, expenses with expense in We with X.X% quarter. growth below quarter. property a were

continuing our lower benefited and that agreements from cable properties from and at favorable have savings recently costs electricity internet expiring replacements. well LED Our patterns as utilities efforts lower to at undergone renegotiate category as rates, weather

We with for our the the quarter. savings are pleased category marketing in

for our However, from slightly trend towards lower the than development and programs. the continuing of and related timing growth are to some greater the growth. expect categories internal costs in savings we Payroll benefits expenses quarter from XXXX benefited employee healthcare inflationary

the inflationary Over we category to expect trend year, towards more the growth.

is have Looking point expense double-digit we particularly want that a forward out specific item growth tough expect quarter. year comp this benefited in in prior items QX, from to RNM, we one-time the to category one that as we

and same-store XXXX we for to And X% X.X% revenue activity, reaffirming are opening within to trajectory. the this up. Turning rental trend our lease we leasing of growth to at historical leasing expected continue time, for projection our portfolios our XXXX,

investment updating progress for With prelease as year. of properties currently in our discuss remainder Additionally, turn now this we market our the trending call of grouping development the we to with the William the to to will activity. preleasing towards properties I year the We opening stabilization. through one over XX% progress and forward fall. to are pleased look

William Talbot

Thanks, Jennifer.

and rates Tier real estate with the mid Cap range remain for investment those nearly sector. to rate here an X,XXX value investment in in runway assets sector Turning within and in first to transaction in to the at globe we one for interested A pedestrian with to Class demand. Conference Housing global over is as the core are investing near-term. itself continue in domestic core, recently from markets a for and core investors, attended strategies overall levels market, solidified in institutional Austin, attendees the all expected interface the add plus the Student The trade X% strong cap low X

for Turning beds now and X,XXX in development, assets on first on currently between five campus construction and making are are universities year. $XXX developments All to Tier attractive well, development X.XX% stabilized either pedestrian in stabilized major projects on Jennifer pre-leasing The own presale or as spreads developments yields and XXXX between to to our deliver basis costs. which is markets, XXX points X XXX representing these development indicating of XXX basis within and of and current budget. And presale of to over million valuations mentioned, time targeting points continued yields located to for fully to their our and ability developments we XXX developments are total great own X.X% under developments. assets pipeline approximately X.XX%, progress X.X% and stabilized in and presales, our our going are for development

Currently, partnerships, UC Housing to that for initiative for Berkeley's highly first have excited a on excess bids X,XXX student X,XXX Student development American full several are provide campus as was Berkeley on the to master we're site our partner very sites. be to Initiative. development of scope, X,XXX to on competitive expected that to yet in part exclusive negotiations determined. plan the new fees housing campus. is project an transaction The timing structure, is beds feasibility, The plan announce new provide selected to high of Turning we recent and Campus profile UC

University. campus ACC of bringing In construction to and our We're under with bed addition associated party on $X.X with XXX the Berkeley the reimbursement which our at X,XXX discuss University. the open to Prairie is targeted primarily serve third ACC campus A&M upper in View deep with on be residence open first the open we managed natural results The to beds PX in development also will upon early Goldman on in late developed for College feeder our pre-development XXXX our at the quarter. in Once division X,XXX. to the University developments along is to and construction California, opportunity. View targeted on party we development housing, on a financing students. XXX% plentiful turn and also universities fall the of and agreement, making expected redevelopment for remained the community The campus hall and development ACC Subsequent from over to to all of quarter began on on the close ninth in progress it Drexel earn $X.X ACE bed earn third portion year PublicPolicy. beds portfolio our expected campus completion, the pursuing XXXX, University will I'll of commence during space XXX manage total third with Daniel project Honors quarter, of Demands Prairie for to project academic XXXX. fall is residential California, administrative closed is School Riverside, sophomores party freshman to a XXXX of and now million end, on projects of a housing, fees. pipeline financial ACC and million fees. complete, of project

Daniel Perry

diluted which our financial quarter reported XX.X% grew with share results XXXX, over this of first of William. first fully company's Thanks, Last at quarter night, the XXXX. expectations. we line per in $X.XX was for Overall, FFOM the the of

than X.X% better offsetting into to summer is maintenance. fee and income expected in of the the revenue lower and to the and summer X.X% many in line components utilities, the the quarter. slower revenues of Riverside the note, outsource in midpoint year. implementation new vacancies, the expense start good done portion next to UC year, throughout to portal, initiated XXXX to but solution to NOI. party were the an store but third us store four X.XX% both associated achieve repairs quarters. XXXX-XXXX this completion risk third the regards to were to will marketing income be online of NOI, the the allow online to same This party Further, as revenue the in to included was successful which remaining this the implied are for the results, expected growth to to development with to XXXX and from payment revenue academic comps million required experience will making the residential and lease-up, remaining tougher to is expense as while years, seasonal a offering to our closing good the property in party payments exist closing With as the third management to were approximately projects occur growth earning of guidance. XXXX the This REITs than of than However, due fall the and any online our This our growth was certainly is this occur anticipate processor. other expense months, net the not NOI earnings year, starting for lower of any management and store operating payroll, expenses expectations, in operating as these targeted entries projected This fee as with same-store party development as the required third the we the first $X.X quarter. On processors quarters of projected, in systems guidance resident we quarter NOI operating in on occur our still we will of year primarily a through now updates continued financial lease still payments up, diving neutral Jennifer well in time, due of fully fee the originally third the discussed, record at eliminated. traditional two the same timing. by income, and X.X% fall lower have year, as the due payment to cost the income gen outsourced operating a the a like recent recognition expense With fall Historically, of us be the offset controls primary came payment rental less separate by the

as revenue reduce initial to the of revenues to we by our the approximately XX $XXX,XXX and during reduce However, supplemental refer points and basis S-XX being same-store each and said, complete quarters added by can and guidance this of the component the quarterly have XXXX. statements. reconciling months expenses to expect rates implementation, we've S-XX temporary later components this year-to-date $XXX,XXX, wanted And of facilitate financial growth impact But quarter the effect expense to it everyone growth that get we three XX in points. reflecting Again, With by to the is you usual, into does of XXXX results our earning for XXXX. to rates already and basis guidance. guidance a this figures our for of actual this not company's each year will column pages first highlight the reflected on XX our and of details to NOI, consolidated

is revenues of debt we to being hearing These REITs. and to accordance anticipate same-store that not we year. about OpEx I our result have and of the we in adjusted to NOI bad change are changes do do accounting the did already to in our Historically, FASB’s This you beginning other not operating range at lease major expenses to from not when While guidance or want to a bad moved of from see the our required guidance. in it, change point reflect making any for held re-categorize had components change new expense debt been revenue components any standards. property operating and guidance one have total we you the sale earnings included I'm provided same-store guidance expense this sure reclassifications expenses with out the will

rate was was as structure, X.X value and debt was debt net debt EBITDA XXst, capital to asset to total to to the run March value Moving times. XX%, enterprise company's the of XX.X%

needs and you approximately and ratio will for available in is net This meet XXXX ratio long-term reinvestment, cash to significant much pipeline the capital. to we joint additional company through in to allow a pretty in page And high-Xs have will development As to XXXX, not at funding a on of to debt or funding low-Xs. set S-XX, made year plan. At assets and million growth disposition, debt changes capital our capital for $XXX and point, allocation beyond debt we plan venture mid-XXs, expect the our XXXX mix $XXX any our per to see the funding in million. and for total $XXX a the million maintain EBITDA and to equity this

sale With the proceeds in existing a that, it from question-and-answer guidance XXXX disposition minority portion million approximately $XXX venture year. $XXX the current of and Our or includes the I'll of joint million half to interest the back in turn during the operator second of the call. properties to to start

Operator

question Bank first our comes from And go Wu Merrill Instructions] Shirley ahead with your question. [Operator America today of with Please Lynch.

Shirley Wu

thanks taking Good the guys, morning questions. for

Ryan Dennison

Good morning.

Shirley Wu

morning. Good

on first my question So is expenses.

comfortable your of to of less the with as and How even So hitting than or XXXX the expenses XQ end given change. the accounting this expected guidance was quarter midpoint to lower were your X.X% update back of your guidance guidance? expense or are on your you X.X%

Daniel Perry

of start for a to off we're the for the obviously our X.X%. good year year growth was mean, I expense Yes, the midpoint

year. that we're the consistent deceleration it X% those We specific to We quarter, below subject last X.X% rates range. year, in growth under the areas property aside, quarter come a trend our obviously necessarily to in first we don't just control. of expectations, a lower versus growth still see that happy first That the be the expense will assessments or are outperformed ranging But, throughout to the most saw believe quarter, upper in. we're implies assessments to range tax do of the pretty less cadence year. we of we in throughout the our still we range think property have the outperformance upper with tax those get were where from to expected mid-X.X which expense that the where Certainly

for that's still so that normal all And quarters have go as with range why we're associated when to we that. year, holding the risks the three

Shirley Wu

winter? the utilities you versus much that, on even I guess, winter as break energy it of the of something sounds beyond an How was savings So comps. if easier into there out kind just like efficiency easier could savings

Bill Bayless

And bit them had some this cable despite quarter-to-quarter, lingering any will across those being renegotiation a is it, season in benefits later love properties and the liking to mix, the initiatives and to have quarter the weather It's in subject where certainly that the watch the This portfolio power of you to variation of upon this up, very can't XX year. always future comes properties are give and that's the is speak a were in broad geographic winter we perceptions be. can't felt rolled may channel, with of associated LED quarter. terms Bill. weather nationally we have certainly of into sequencing something into my the how internet the -- so hurricane XX and Obviously,

continue as that, And certainly the but we'll fortune we speak nothing to continue throughout it so year. of having hopefully can to that terms have in good relates to

Shirley Wu

for Great, the thanks color.

Bill Bayless

you. Thank

Operator

with And Austin with go KeyBanc comes our question your Wurschmidt Market. question. Please Capital next from ahead

Austin Wurschmidt

morning. good Hi,

You guys go system UC likely have from talked about to being the the more third-party. awards

wondering just beds discussed So you what that And timing could X,XXX some the that the to some for the detail goes yield, William the earliest et ACE. X,XXX probability this Berkeley then portion cetera? just potential of deal around provide additional UC

Bill Bayless

was competitive process. a and we're after very Yes, that sought certainly very and high highly pleased that profile a

at transactions on we're third-party. the first you all to two one we know pre-development ACE, be in As the currently was with the Berkeley, done one have looking current from Cal going is

regard ACE alternatives structure development. that to some of these GEO development the place, school we're where competencies the all think perhaps bring to going the the third-party, and amount there with ranging they core that projects of even is scale taking from transactional the the full I Given of total analyze the to privatization developer engage in maybe to all way and have,

early playing very seen expect aware our those. will together, including in would yet for investment versus too yes those any overall on be is be to it tell to -- structure we’ll we much to forward to but early the not in come you us one of how as And or move to ACE transaction certainly So, whether profile, keep a variety particular. too terms be

the regard, these The in in a are California sequel urban and complicated ground fairly XXXX a probably we're first at sites for approval environmental that at process [ph] looking has delivery. transaction breaking and XXXX and and core earliest

the about fits, it fits off. turning kind thing up be it nice into did Disney's so as of And capital it into this gearing ACE allocations if the ends would nicely up rolling

process too to And way announce and nice too invest in it estate be love so flow But to the that'd finest see of sequencing, this of real any time, ACE in that in at some the but would early out. a the to we're our to point play as early still company. obviously

Daniel Perry

I from Daniel, we're question targeting universities. high Obviously, as yield process, think this is But perspective? X.XX% that general our in a during the with ask just the thinking yield. RFP to very of the talking we level what question other were was, other X.XX% you'd now we still development -- part still are

Austin Wurschmidt

yet and deals? when there campus type beds RFQ, of for the Got you owned on then is how it. awarded initial UC any have these And system potential so from a to be to be many

Bill Bayless

when the Irvine third-party have the UC go other tended that highly crown being UC awards, of system to system share and much the does transactions model that at in continues education our America place, public of work like won very sought the after the implemented route towards the UC the there. being to was transactions third-party in most we Riverside, The the have taken of UC the we're system the biggest Most the Berkeley and very lion jewel Irvine. obviously, UC in biggest pleased

our the and largest pleased and lion certainly our share been of efforts process. initiative so of very participation results decided, the that now the taken And we're have in that with is place, transactions

Austin Wurschmidt

an over you same-store then XX about months to upcoming Got leases, average up rate. it. talked many which had your above switching just previously of with revenue, of expiration And at growing the

to of understand meteorologist the you your If on, hat you us of help put the into were second can the quarter? magnitude expect deceleration kind you

Bill Bayless

at ending residence consistent the year. we the halls. May year, leases we our about where with throughout X,XXX this have first properties, And portfolio right not campus last year very apartment Yes, were just that on across is

of from May terms the to on some to the doing where filling leases. so in And we summer leasing of that some attempting have with rather May the short an place, has par of May some we do is we're that’s to right at last on the there. And I ending mention, one different kind can lease of in which did stub as number do period initiatives is approach conversion, May of May looking interim call, upside

to early terms any of from mitigating revenue that of on in something focused too occurs the So, about initiative results potential is that team talk that. in that’s certainly diminishment any

Austin Wurschmidt

I to far points kind about quarter? we it to the quarter quarter from second first think fourth deceleration, you from of as as about how should XX But quarter, XX to mean, first talked basis

Bill Bayless

been Yes, historical diminishment XX that XX to points. basis typically has

QX, rental X.X%. so in go X.XX% to X.X%, the see typically period, And you would revenue this that seeing

Austin Wurschmidt

a impact some below average other that fair? income growing pace. I And then additional, be at there guess, Is from could

Bill Bayless

Yes.

Daniel Perry

is we other is the for income of in beginning This the to Austin. that X% to what about range. right, Daniel, come That's at the talked year flat the we in, up expected year

Austin Wurschmidt

Got helpful. Thanks, that's guys. it,

Operator

Goldfarb comes Please Alex with from Sandler question with And next your ahead O’Neill. go question. our

Alexander Goldfarb

there. good morning morning, Hey, down

Daniel Perry

Good morning, Alex.

Alexander Goldfarb

morning. Hey,

like at put on yourself everything I spoke potential variability quarter if why guidance, with guys on in move for it thing third for that here But it you out is the sub other range the night last wider you're now before about quarter. outs. a that You fourth quarter, sub about the you're talked dispositions a your versus was that giving you expenses like look looks is first maintaining your looks bit

would be high fourth the third guidance, late at it the saying would Now end, quarter low it end quarter. the be at you're

for you and expirations again, pre-leasing how as trend. over same some going. variabilities of you is on conference, were in at beat, May strong just looks the if can the So the else your interface very the clearly go your everything are have And why last peers bullish year,

sound there's So like there. it any slippage doesn't

Just looks you figure widened here, it guys yet like the your in because variables of trying range to have disposition which the other out unchanged? And are would timing, keeping sort earnings. you're the what flatter

Daniel Perry

no expenses, Yes, drive year. %XX or in amount venture joint drive the a and it’s the the disposition/joint didn't the higher impact reference portfolio with was the so which the quarter deal or We've type guidance obviously update the fourth $XXX regards in that, remarks in at With it's throughout equity million it have end of activity portfolio that got, towards uncontrollable potential deal, plan like of as the the out the that of of one We've high a we’re difference there to fourth the was year, in we we beginning timing, in to would I been my of lease-up. just about quarter. actually just if in at activity that would capital of year any versus us at for in activity towards prepared activity kind XXX the pricing, us venture the any of summer management joint -- of to said fall in. million We what the difference would the a $XX proceeds. obviously any still year, year million that expect. smaller control end. to a time, And capital early, and that quarter all million the Putting being may or vacancies, we was venture also have this size, do allow of of terms expenses not guidance realized we normal lower for million risk which $XX year in We end the asked go every occurs larger like to the size. driving range that clarification later updating what

Bill Bayless

comment don't certainly, industry up housing Daniel. want benefiting attractive incredibly industry we remains me sector. that relates to Let brought a in And is, the from And interest Alex, comps. housing to diminish one capital the The lease-up, great you student space. student the an cost the of thing to the is the

we our our As commentary. in look in Jennifer at with our our lease-up results, said at look National historic as far as When the line last data AXIOMetrics portfolio, that basis the national the XXX we they points within their is top that expectations. on portfolio markets the XX the show same-store people's is for pre-leasing in track numbers, March year. of we When

the we we news, are. commentary form guidance individual lease good that be But as surprises We're throes always but up developers trend, should everything as is there. the on no raising take in exuberance historical So of I wouldn't from our in any or fashion.

numbers. reason know, we exuberance updates time piece translate take people of and into above very information is in that and wouldn't a giving so the her behind you point comment quit changing leasing As of and

a to do. the so of up work we're And the we in said, Daniel as got lease lot middle of

pleased far too fundamentals, are have do out to that tailwinds of the sector ahead think we to get in we but the want We terms of the ourselves, continues nor industry with should. don't

Alexander Goldfarb

the on to some the always more about seem A developers said, lot a to beds getting developers the to had into difficult, acquisition how at XXXX, development. there And that come has talk from were you given But even the XX,XXX XX,XXX find ago, in think how the a like plus. years about I it's second few way inability make the develop. game of versus talking Okay. developers development down delivered supply work. Again, math question was conference, then is down,

going Or had and last few So that all on sort delivered that you to rebound the expectation expect there? down way that supply you And is that years XX,XXX us to what find that is gives is the of year? to into a is money going ago? its your talked do coming oversupply development this view this year they for expectations bed that your stay we about

Bill Bayless

that colleges in infill natural exist think again, own happening that. what's areas in the these tempering in. density have barriers towns. a of done developers I the tough have the never their to to estate seen industry higher And because slowdown you estate everyone and that and develop college in areas reason, to the job The knows entry around urban in develop desires is this geographically real real these historically No, good are reason absolute

we so the the that to entry the levels, have think exists natural is continue level those the space. currently And see reason you'll that you in the moderate of barriers slowdown reason seen and development to the in

And from so the see is natural development the you'll difficult it's is I in only would together, you there. would barrier and how the way everybody that went is don't has be did, this see to put and a between. in the And and the further significant fewer that only a uptick properties old It's people entitlement And an and stability model back way building the that development to of dry don't you the and if game surprised you are further process you entry. sites think already campus. see out of defensiveness to cash have flows the investment seen if could uptick the played

campus so needs and following barriers class the entry to to growth. of natural The the all becoming is are be. with campus with product investment the that the model business the norm industry And the of American candidly suit with to that what now slowing proximity that, walkable paradigm shift, recognizing

it's more constraint so else. And than anything geographically driven

Alexander Goldfarb

you, Bill. Okay. Thank

Bill Bayless

you, Thank Alex.

Operator

with with next your question. Citi. our from ahead Please question And Joseph comes Nick go

Nick Joseph

Thanks.

going For is you partner? broadly with marketing year, the existing later be deal or anticipated to your it this the JV minority JV are

William Talbot

our But would Right Hey our the be in of venture it as which Nick, to this Allianz cost bucket we the another right way idea use look is but terms. in current in was a of a now, than we when capital. formed further of a could true would strategy the execute joint expand it to now that. potentially position with be also if could be William. ready at partner, come are or We JV they not to partnership

Bill Bayless

-- that voluminous ability existing good environment first been in of shortage shortly it's more the us a partnership, this any as been circumstance space look Nick, interest JV about no we'd partners, or one said, of than it's obviously, The the certainly the Willie is ever a whatsoever. under give our us. for execute concern But partner to to give relationship others. current with does and litany no

Nick Joseph

it number JV? you ACE off the include like could of shift or sounds this Thanks. will they some campus assets all then assets mix assets, in be And

Bill Bayless

would impacted, it say campus certainly But we right past and at venture now We about regard. did funding, relationship venture of very ACE to the you our small I likely activity. to just amount really be ACE talked say that at have would always transactions that we the most be we in joint look never. say we've it’s that. great, a never something and be When concert but university to any decision in tend partners if this be never. your assets might we need do much the looking joint never not the not amount we with portfolio, thoughtful would of We're that in larger

Michael Bilerman

doing to your take current you given or from to delever the Hey can in a or perspective. of the the today high-XXs? Dan, additional has to back Recognizing joint need on marketed stock at asset a do Daniel future the if meaningfully pipeline want in feel add with venture to the development where issuing ATM balance sort through get you once the you what's don’t that that or and guess, this you Bill, want or the a how Nick, Do of to acquisition Bill you feel about, I of are year, but here know end the of thinking the you you'd the equity raising moved more ventures, joint I additional to continue balance has things it’s pipeline? before do more Bilerman deal, But answered. Michael flexibility either have sales adding sheet outside the place sheet to capital

Bill Bayless

rate terms Yes, needs. let for then given us. in acquisition that where Daniel of allocation strategy out of the And and in that’s sheet the some let the our a capital of into opportunity environment while, is Obviously, and the the cost changing me versus don’t of cap address we've get for see go near-term out balance been there. of first capital timing I'll game ahead the

of game to And acquisitions be time. continue in we the out so at this moment

mentioning above The XXX the that is went yields William When are. think now is aspects market being development talked was XXX points points our student was the today, William Michael, XXX most above other attractive industry thing basis where rates. one of XXX of we about is to and this I housing cap basis certainly current cap that spread to public, market rates the

few the exponentially, one market seen comfort to as are, amount and relates cushion are. grow to gives our where conditions yields a in which of that rate And development capital market terms that so of great recycling has we're where to us sectors it yield of open

lot of moment as thing campus, other our few to and commented most the be environment with are Alex in between. sites we of time is further in the what awards, you on The hear we off as also a talked in this about, -- -- those development in continues campus, at the

and stabilization from how the and may come of got those we've perspective. those very given development good fact they into the on campus so, and low terms and per really also delivery long-term a delivering risk they're view in materialize together And stabilization that how pipelines, environment

XXX, so to go And And the to a now said, to ahead of got into we we Daniel a look we've capital can accretion put we recycling through evaluate. evaluate well-timed and with opportunity up that XXX when to… points runway prudent and over that it play is sheet, balance basis at to take long of how that

Daniel Perry

I Yes, better to I plan. lot we growth of we've events the we going a there forward. do time, trajectory Michael, NOI, the that mean, about I don't match what have earnings want to to our I know, put going talked want capital out that we've delivery forward mean, our profile to to as add drive better a

have At got now for that $XXX million coming So, showing behind anything else right point, in we that. we have that pipeline we're XXXX. this you don't we've

opportunities has million think stock that, manageable. that than the at is which we level obviously at not to smaller right raising XXXX in last pretty it between think all And quite now that XXXX we been over beyond The require we pipeline type years, few capital levels. $XXX look is it’s $XXX dispositions, set, So about will to very much equity a million think and pipeline of continue appropriate common for for to leverage continue yet to is will to is we itself manage our raise types equity. the

and until at continue changes will our source dispositions as through or program the joint recycling development we main look as the we to best up pipeline. time that it's So to whether straight venture capital that can try with

Michael Bilerman

I color. the weeks would thing over guess, this stock just helpful call about where That's two ago, same at if have said you the was was $XX?

Daniel Perry

probably, least yes. range the -- right XX-XX consensus in up I We're mean, is NAV, NAV at now.

capital think of below regular ourselves get through recycling right that discount still to the capital get offering, While the through you using NAV can we And a cost have ATM we program better we a held now. it’s an minimizes that. and

Michael Bilerman

the for color. Thanks Great.

Bill Bayless

there's delevering. them it that so and more go mitigation that able timing anything basis of and major now that is ACE, And look going components pipeline a are too going right risk and development accretive, out if it's but if highly this of when key at fund ACE. in point the mean, any being early in at than I way market movement Michael, to time do be you of accretively if Those XXX in moment basis to say terms rates again, the larger is spread. Berkeley right a on did to are doing plenty transactions now be Disney,

Michael Bilerman

Thanks.

Bill Bayless

Michael. you, Thank

Daniel Perry

Thank you.

Operator

question next your Baird. our ahead with And Please from Babin question. with Drew comes go

Drew Babin

morning. good Hi,

Bill Bayless

Hey, good morning.

Drew Babin

that’s kind of my an it if kind up was to could better decent just last is be quarter year's of a on hoping to of know shaping is seeing last have it wanting was year. on one this up? of up just amount progress FSU be just highlighted be lease optimistic know helpful. of shaping color it to on relative understanding campus? for this I had would on closer I as better, more market update if provide student a I Most supply. very year Bay been And [ph], answered. driving guess you that any product, state qualitative the you're beginning you four need I questions a Fortiss that lease-up what's is doing from how just Just I the there. the relatively was how and -- I was

Bill Bayless

beginning this the that in is the ones market about concerned Yes, supply somewhat supply whole of one of behind FSU what highlighted coming we absolutely strong was we of year at with year year. the the again market The was the in. most coupled were another a last over the year historical as

but and facing have down on be velocity. X% about we're on continue given we're rate, up rate, XX% velocity We fortunate minimal ahead and that up XX% to very on current

resource Obviously, shout rental how are and to cannot that we tribute a any marketing to way So about always program, were last last approach do the tenacious. when this huge which just in is of do be to to to to marketplace. in place. American And conference have implementation And pay is that year. the I things XX%. our our we and tell competitor market. passionate simply said And think best is have our data Campus leadership out exceeding growth they had they we I the outperforming year’s taking the story, you is there company's out say this Jennifer what the occupancy, and Again, revenue in short very to the And what of business implementation I working human going the the opportunity and by using sell that and best got to I've we fall, the have every but passionately would want available, we're very Tallahassee it came and team. I give one expectation other the team team platform the to data any

to out them. shout big So

Drew Babin

and either be would know there other anything enrollment negative relative you? that the of as growth I on very a of expectations? ago. some couple on follow the emerging Texas outlier or obvious the Is surprise an of to Texas are are you guess, to expectations the year or I And, any at lower as off have side? sort base relative Does years markets of coming a State sort know strong been outliers side A&M helpful. guidance positive that's anything and progresses, initial Great, universities Tech

Bill Bayless

a total XX and we Well, markets. of university certainly in we're --

that going So -- ahead as Atlanta, we you we're at look we're running supply coming that of team And presence, Kennesaw the we is market markets State but last extremely that's where we couple continues Austin, at see recover have plenty list. markets to in. And small look Lubbock, a major historically is again we're in time all Florida slow to was going year. as lot you of well than of a is close which of expected have a has the running on We of late eye little also other the new State where State year, a outperformed. well. talked velocity about mentioned, markets cases, a which one running Texas this got keep to don't always in year, we ahead beginning market. on year, be, the And the you to them both more the manageable those we which there.

champagne a lot the well also of surprises was market which also doing there we’re ago, in was of extremely this not markets, So too. two years one

to good going only till and September till implement left it's I we months over got report the It's April, over, season. a said, implementation hopefully well. But markets we leasing this where we’ll Daniel expected comments, look number to tenaciously end, we soft when we the at all-in-all my in so never very And as the good and pretty reiterated XXth, got it's all three in year. picture individual be on

Drew Babin

the appreciate you. Thank Great, color.

Operator

next our And Evercore question ISI. question. Khanal from with your go ahead Samir Please with comes

Samir Khanal

of about for of that, beyond the some completions million you're I of sort not on sounds years, just lower. we we've be the modeling of few Bill that what's sticking sort of be construction labor side, the of color I over kind Daniel, comments guys, be made kind be morning, to of cost or kind kind XXXX. helpful. around achieving but Good And development $XXX would sort could in guess is driving costs, lower, that what next you you're it higher of it to numbers development past. development know like kind But yields, should just talked the -- number any

Bill Bayless

tend place the again, given taking market. most do the different sites we our the still in scrutiny attempting whole pro-formas build to No, right million, million developers and the we're the [ph]. to the I into a masses, off do rate, top economics. had run selection. deal we than to for The the slowed progression of to now, next space of down is the delivery, where And $XXX competitors not we take are be being the the who just X% continuing build and in $XXX years $XXX a price chasing little that million million think that million talked transactions deal we where $XXX approach a of to what's we've campus had rate more about just The come in from anywhere over below natural $XXX socio of classes one we at other point All run terms year have capture first which play. outlier spot year-over-year

using XXX numbers deals highest so make to plus those the point the and at work. rental looking bed only their performance, in market rate And they're in

did we're again now days buy XXXX. be months back and replacement that XX as seen acquisition as forward you opportunities can XXXX of then before. a patient, XX, we upside that lot to from XXXX, will so, And Those those below cost. the we've look And we have in

be, see the transactions, pipeline, dollars the diminishment in the not which in shift development you that And when of on. in at campus continue has the is been the right development campus now the off you to pipeline where so look is the on and now the bulk the the diminishment in

in continue be is continue we've years to And opportunity. the PX from on so pinnacle of over as as flagship certainly pleased campus again PX this terms and of of undertaking say being of pipeline the robust the We're probably stay that quarter to that incredibly is quality of main that the the transactions and model are perspective, the Berkeley a the pinnacle it, it. institutions a Cal institution the mainstreaming delivery,

us. the public only absolutely love for also company that a in arena competitive huge We and now being advantage in think is space it the

to pipeline so a steady And there into see future. the continue

probably $XXX I years slightly a things long-term it's numbers the good $XXX a where together you slightly $XXX it million million think where years all $XXX see and But number, fall say perfectly it came I'd that So to million. under a some will probably still over that. million year good that to in came if

Samir Khanal

and is low to NOI, -- I thanks points I first bar kind XX the question to get to then quarter the happen what here. Okay, next X.X% of what the color. it's the sort you're it's guess, range to you missing basis being pretty end cross for getting average the guess, needs kind about guess kept the for my a which quarters, am in here pretty to you second end, of for the that X.X% low, I low done that and range, low guidance doing the sort back X.X%. take guess, of I same-store of the seems to three to of you've you've consistent, I get

Daniel Perry

allowing the that for Yes, for this that in where of at obviously We up is then difficult end, is come your insurance Property areas. sometimes and lease surprises that taxes and one, big the we for times, for you area certainly, the can the are you’re I that's non-controllable end by that at expense surprised lower gave at our can NOI X.X% costs end the at in the fall’s happen higher range growth. this the to you're growth, market get response of potential try you have and in high lower it we in end maintenance which expenses obviously X.X% of be contingency driving mean, can low expenses and allowing that see in in same-store end, is the for Daniel, unexpectedly. can the fall lease the And X% to what allow incident repairs up.

Samir Khanal

Okay. Thank guys. you,

Operator

question next Street your Please Pawlowski Green from question. our Advisors. And ahead comes John with with go

John Pawlowski

schools years? for last few Are addition revisiting on the few to in Thanks. hit have upperclassmen, campus your currently of requirements a any mandatory that

Bill Bayless

always publicly monitor. board John, there's that regents that have in front this it's put statements none out proposals or of time, but at point of in something their we

a maybe somewhat unique have view We that. a on of

Life For and that program first have off our most on campus and is being location the program most positive, campus. the year to upperclassmen with that our and and community that student can are And the academic on the that a run Residence colleges to as campus way an to the part, compete us having live on. alternative student where the to we and migrating who position campus non-university most likely in properties a live universities the likely longer as long-term students we private market, from view is academic live like campus in we open off for American that no ourselves the the we forced classroom, students

us broadening in you those we the is sometimes requirements that markets in we initiate freshmen year, markets on housing positive. net like first so, base. may be after There that where first where But the potential to you're when where as are housing, building target products. about it. market the a year that some shows we implementing we where losing at always one our history And campus that of housing year universities certainly, on have have are conversation a look then, And program, concerned campus

may it's always decisions we term the so long-term positive on and a overall and those net long-term negative. short how not view something a monitor impacted we view And basis, per as strategic net basis keep net we on be but closely a on

John Pawlowski

University, that growth Portland is State, a in aggregate. or demand side a take off-campus Take mean the a you're statement losing negative school. on a Marshall bodies enrollment negative in But Missouri, hold Understood. I

campus race at to the well to coffers bottom expense fill kind the the if tries they it located? of is of off communities, So where a your its university own are

Bill Bayless

your reason have and the where universities as is we're something good markets environment were that an the operating of not Yes, even And typical Mizzou, to be because the campus have university. because campus live ordinary and happened terms when fulfill have positive don't net find one an saw enrollment you that out from in Use what don't what drive in you'll though, that Mizzou enough a that out over beds those on off-campus of sell of off-campus require your reason look the on first of example, a drive only declining beds a on-campus where growth were requirement has was percent beds enrollment they incoming softening in to overall at it. average percent of in have a long-term, a properties you beds XX% that'd typically can't. those or XX% enrollment. typically a don't in housing they at again, all The the they a universities that you year main dip in best for and students have not. do from on whether housing as beds campus filling. The they located as Mizzou enrollment the are Certainly most they reserve that's requirement Even have a issue a only students beds the the

enrollment better. which property did Mizzou street entire university drawing much the Our downturn much, the XXX% the was across is located and at occupied

have that not beds And no implementing are not does that do fill capacity whether the filling so, economically, of have we mission necessarily the to problem beds need first have students entering. serve with, their number are see don't that to universities or year they our we they to typically it’s

John Pawlowski

Thanks. understood. Okay,

Daniel Perry

Thank you.

Operator

question go with Bernstein ahead Please question. [Operator our with next instructions]. Capital And One. from your Daniel comes

Daniel Bernstein

morning. Good Hi.

Bill Bayless

morning. Good

Daniel Bernstein

I owned -- business. the broad will owned I'm out, a been to mean, business management you business been for of tilting management. you assets, more time, do it’s business think, an like to tilting the see you’re where predict Most or see or I hard but more of be equity you a equity question, couple Do more your years answered, more sure of a recent little towards an than capital had little you'd over have if markets management the questions and it's a have I most thinking business towards bit wins own more versus bit it third-party a

Bill Bayless

arena No, for and we in us. opportunity. we have that as great a and -- company of don't, always it's colleges continue to brand a business built universities. where we among manager. that's And we see developer started Certainly, a our mix And our third-party

getting arena. building through brand, enabling not entitlement us processes off-campus, to In we've only harvested that terms also that have credibility because but of our the in of more in relationships

Over the long-term, again, highly we're continuing to underserved. be in an industry that is

is we're Most doing replacement average Mizzou, the of about to of continues provides beds average those university talked the old. beds XX age what percent arena that a years of we as be housing. enrollment, only XX% in As

whether again has to university an transaction and do balance do XXX% always sheet their universities a with decides to or capacity. Some almost equity third-party a transaction

universities State the the University, to housing. of where I'm Other on allow that ounce facilities. their to have balanced what an someone for approach mission So is. every sheet based example ACE have is research to and preserve funding balance I of Arizona Crowe's President was capacity going handle else's academic And a that

the market I perspective, university. from also being continues those be at will to now that beds have and that an public M&A X size And the continue And And the choices whether The owner. the agnostic on-campus, of down off-campus time of right or them slowed fits in think times provider, by We're that's cycle. in the things as to moment role will and we choices again diverse off-campus. future and to a be methodology best, we ratio equity XX% while universities. so in acquisition continue third-party play of with to what think in be

capital And built scale those private built as over that next the period company companies opportunity XX historically space partnering you us about the platforms flip. XX now been that And developers to first now, that longer that the time merchant coming we we XX, hold greatest is lot portfolios. first time, the that think forte is flip, capital and that XX has flip, have our built for years, in development that XX, and not have have see so, with of And their institutional the property before managing candidly, a operations. right and into are for these have a merchant you building developers have

when earnings And for nationally a of become great opportunity this rate that in built can bear think points going of was so to per and be with occupancy the we But efficiencies have XXX that when market conditions time we've really operational merchant okay. in producing bring investment to initial that economics got along basis we rental is left because activity amount that’s of holders product to company first been where period. XXX share, significant with the will some there's locations, we're over do M&A in developers great

of XX had be more arena I in that XX, the think, on opportunity than we've going before. so, are ahead those to but days months horizon, us, there's again, ever And

Daniel Bernstein

Okay.

cycle just in of in you So the it change than MO. it’s more in are where a

Bill Bayless

great third-party Correct, that's mistake, income. no fee that make although we revenue, love

Daniel Bernstein

I’ll Thanks. hop I had, off. agree. That's really all I

Operator

ladies our remarks. like gentlemen will session. closing and And question-and-answer Bill I'd any Mr. to this back conclude conference over to Bayless turn the for

Bill Bayless

Yes, thank we'd QX. joining all for you for like us to

today. to their I of their lease was said hard effort and and finish about It's a the team in As commitment year this we to talked lot we've of it up for early and work very all deliver to through you strong the continuing thank work at results Thank we're And that much. the type the do. got that so to we've very a want quarter with. pleased of good beginning,

Operator

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

may now You disconnect.

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