ACC - Earnings call transcript Q4 2019 | American Campus Communities Inc

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Operator

Good morning and welcome to the American Campus Communities’ 2019 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 Ryan Dennison, Senior Vice President, Capital Markets and Investor Relations. ahead. go Please

Ryan Dennison

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

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

package presentation facilitate you by and supplemental are be slides and to Webcast Our webcast one may our same. the advanced following along. analyst

of Act facts XXXX of Section Securities Litigation Securities the XXXX. be and of referenced press conference package deemed meaning Management SEC you today are making disclosure XXXX, like to historical of this Exchange statements the Section by forward-looking as Statements within that XXA Act and the Private may financial statements not supplemental the which the XXE the inform certain of the will made amended Forward-Looking and Management in would during in Securities in call filings. be of in as Reform release, Act

release. and its results could to be the update that on after the actual events are can risks and believes The time Company expectations Company this assumptions, Company and reflected Although the that obligation vary. no materially cause detailed statements results date and with the or in undertakes subject no may to achieved any the press are differ any the or from to expectations economic will to SEC. assurance circumstances Factors Company’s actual periodic provide reasonable forward-looking statement filings risks in reflect they are expectations release from of time forward-looking advise to based uncertainties. in

would members Chief said Chief Executive Chief call: the introduce Officer; Voss, I Hopke, Jennifer Daniel Investment Chief Beese, Bill William Officer. Kim senior that, joining Having for Officer; now Talbot; Financial Officer; management to the Bayless, President; Chief Operating Officer; us like Jim of and Accounting Perry,

opening that, With his the turn to for remarks. I over Bill will call Bill?

William Bayless

Ryan. the was I operating and thank you, quarter and Campus. you us another for what we financial full-year to and Good morning year team all would for joining for successful results. as our discuss XXXX thanking by American like Thank start fourth

We had earnings solid to core set the growth records operating growth original in expectations ultimately and us rental of NOI. achieving in our and year, and third-party total revenue, per FFOM high in rate, operating share. rental revenue the our our of share, guidance, and revenue Company X% allowing performance year earnings produced per throughout consecutive in We end raise same-store XXth

X.X% recycling basis dispositions points points under also economic to and high sell yielding basis to cap at our pleased yields. development the of activities, spreads capital of a million enabling with execution XXX of or our are We at complete XXX advancement to into contract accretive reinvestment rate, $XXX stabilize pipeline with

decade new transaction to XXXX, market, additional supply lows. strong off-campus fundamentals addition positive see the with our and in In pricing looking into near we markets

University new quarter. announced project previously a XXXX, expand development mandates award Our master this and announced another with including pipeline West in continues with Virginia on-campus UC multi-phase Berkeley five development with to

for phases delivery forward be believe which development at our we pipeline discuss, XXXX, of And as World, William the will will first organizations. of into to a as look to finally, strong be continues as And Walt moving PX transformational development ever. the Disney we our

Jennifer to our over us will Beese, With Operating it Officer, Chief started. get to that, I turn

Jennifer Beese

Bill. Thanks

As and of year rental same-store Bill in growth XXth pleased rental revenue are rates, consecutive our NOI. mentioned, report we to

on seen Page and expenses supplemental, X.X% quarterly increase of property in X.X%. an of a the in As operating by same-store S-X increase revenue NOI X.X% on increased

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

are came initiatives same-store revised revenue, that surrounding by expense expectations end for utilities. We XXXX, of asset guidance pleased at and our high management led the results NOI in our our

annual controllable approximately X.X%. categories expense our was growth for Our

due We also velocity fee saw leasing other strong lease-up. X% coming revenues from academic admin primarily to to and QX, in income year app early and close growth in our XXXX our

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

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

by fall revenue of to We year occupancy rate, XXXX achieved portfolio which our XXXX X%, academic in of X.X% of are for fall projecting of the opening driven XXXX. is expected same-store rental since XX.X% growth same-store most be to

As always, end associated income the our filling, other growth projections. the lease-up, execution summer guidance reflect fall and with and short-term risk of meeting the back leases, low high revenue leasing initiatives

expense payroll. majority the same-store inflationary side, our the growth expectations insurance On are of our XXXX except and categories, for for in

FLSA numerous X%, and to on changes double-digit being in conditions, We increase of based expense increases by status, growth minimum well in expect states. a the expenses area current market payroll as wage exemption statutory to influenced as expected in are insurance

and versus expect marketing inflationary to do year digital refinement fluctuation the While the for we we growth mediums. be expense year, results programs our due traditional to expect calendar prior some quarterly to of social

environment. from only since in in markets occurring also supply As lowest tracking delivery, decrease Total down XX% supply for X%, new amount years. beds ACC’s a XX markets, of supply as XXXX. lowest Bill are XX,XXX percent we XX our XX compared our XX in positive The is supply enrollment in markets of the markets, a fall new nine XX in mentioned, only is and only XXXX new XXXX XXXX. owned the see In to we a amount

XX% when assets from XXXX do excluding addition, the our supply the is ASU with of on-campus that NOI In only derived in new market. markets, within not off-campus XX% our XX assets our from top compete down at

markets, In being addition, new markets currently fundamentals barriers largely only of NOI our in with of to the XX is those exists four entry natural The supply delivered our decreasing that beds four of the in being the see the XXX average new have markets, strong we trend to new in XX top supply beds. competitive driven contributing by markets just sector.

William call with And now to over to investment our I that, the activity. turn discuss will

William Talbot

Jennifer. Thanks

Landmark, Michigan in Ann University the gross in $XXX Turning of first Arbor, serving the to our for proceeds. capital completed of recycling activities, we disposition million

In at serving a addition, The $XXX the we sales Maryland cap of are economic sales College revenue sale Park, quarter. operating sale rate on expenses. The Varsity, Both and million. is under of first to represent price on projected in a University in-place close X.X% scheduled late contract of in the

Over yields. the developments past allocation our rate stabilized over executed a low-X% and X.X% at two X% capital accretive highly by recycling million years, have cap owned our strategy to $XXX those at we selling proceeds into

The renovation housing multiple redevelopment and is announce a we master competitive With new through University. of award include that excited projects. on-campus strategic process anticipated West selected were Virginia to a as plan RFP are to including regard partner various phases for development, we to housing,

timing not scope, have The been yet feasibility structure, determined. and transaction full

with a definitive are Georgetown announced through we In agreement addition, a for third-party executed previously pre-development progressing and activities. project

direct processes to of more and/or currently are vibrant than continue flow PX see procurement tracking our We steady business XX a and negotiation on-campus in opportunities as we opportunities.

projects With regards we currently development, on X,XXX in million with and totaling of to three investment. construction under $XXX owned beds delivering million, are $XXX XXXX over

We our participants XX,XXX-bed, Program million of nearing on at the Disney development, Disney serving completion ACE are first especially are phase we excited of Walt World. $XXX that XX-phase, the College

community of first consists square center housing, The but Disney. apprentice centers operated along owned XX,XXX by one foot education with square beds and hall, XXX XX,XXX and the of phase two ACC by developed a foot of

move-in and With on The opening of which You. April May Disney XX provides magic a Be X, the Fourth is first May scheduled is grand with The touch

of of August this May will XXX through The deliver housing second with year, residential phases phase delivering XXXX. beds the remaining of in

student strong take-private totaled transaction the billion, to Finally, a housing transactions $X.X slight produced investment the student of turning According report, to CBRE’s Greystar-Blackstone decrease another of only year-end the is transaction excluding in market, which year sector. housing when from XXXX EdR. volumes XXXX

investment slight merchant developers primarily shorter-term space horizon institutional past decrease student longer-term volume as in versus driven portfolios driven investment was available of The is in by horizons. lack primarily product, years the volume a by when capital a is with building entering of housing now

highest core Power transaction the pedestrian hitting rates compress As rates lowest in X XXXX, schools claiming at conference market. evidence, the quarter continued their lowest to fourth the cap serving the assets with cap quarterly volume average during in

portfolio note to Investor interest XX% international with that of abundant consisted largely all It available. product very capital buyers, by widely of acquisitions. interesting housing strong student resources is for financing remains driven

to now turn results over will it Daniel the to financial for discuss I quarter. our

Daniel Perry

Company’s approximately Last higher $X.XX of increase year. and the midpoint annual results the of fourth was updated $X.XX line guidance guidance final financial for our X%. full-year per of for in William. FFOM representing This night, reported our share, the we fully an $X.XX Thanks than including XXXX, of original FFOM quarter with midpoint diluted and

new all-around and at beginning driven the conference in of The business operating summer revenue higher was our both during spring expectations our camp increased and halls. leases and from the at summer store short-term properties. outperformance backfilling in At residence from improvements our the properties, same-store benefited our semesters year and same-store results by

side, our on reduce expense discussed Jennifer we management energy as from the Also, initiatives at usage saw benefits asset operating to substantial properties. our

underwrote. properties properties high lease-up expectations. store produced end on high new revised We quarter third store the to of guidance our by X.X% year, still expectations NOI new than above earnings we due those call, a and NOI the better significantly Our primarily initial the of raised this end outperformed

Moving long-term allocation and capital to funding plan. our

on XXXX see all Page As now requirement. earnings developments and through our delivery pre-sale for development S-XX funding construction you remaining will one supplemental, under of including

low-Xs. We cash mix expect disposition, in to to to million ratio the available for we a high-Xs through $XXX reinvestment in have assets year in debt allow Company on in target needs, will venture continue ratio to $XXX EBITDA mid-XXs fund a $XXX cash the which million the equity million net hand, of to debt a and joint and/or to remaining capital This and approximately capital. to per

needs million in debt the we quarter, for will be a As William close expect current that and to disposition capital forma completion to rate our would EBITDA total on to would which of address asset times. value discussed, $XXX X.X net debt transaction, XX.X% Pro run our for XXXX. first be the

four next monitor years. continue of access to most conditions market will investment to throughout we relative and the sources capital always, the our As pipeline attractive

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

We are time also introducing for guidance quarter. per for FFOM upcoming the share first the

quarter first an share. have per the $X.XX of of $X.XX provided guidance FFOM to For XXXX, we

You and the earnings assumptions major can turn to Pages guidance. are our S-XX complete follows. supplemental to details the the get components on as of each But of S-XX of

expected driven For same-store property to X.X% the growth X.X% revenue X% operating full-year, and is to by X.X%, increase growth. to X.X% to X% NOI expense

the two for by will expense results results difficult strong comps expenses primarily lease-up of by NOI first the same-store XXXX in be XXXX. fall impacted in control of XXXX operating and quarters generated the Our

admin two markets, expect quarter the and normally two some expect which fees factors. by early We fourth in strong quarters several forward leasing in half we other same-store the impacted we in first XXXX. we driven experienced outperformance receive first velocity resulting other income pulled from XXXX, lower would the during of to One, income, application be by also

have XXXX of and laws New state in certain with charge types lease-up. York changes ability commencing two, impacted the And Texas to our fees

from move revenue As growth. operating rental growth second statistics for XXXX lease-up fall expense growth the benefit expected the to and more the normalized year, of we half the same-store of are levels projected into

increase our to and approximately which growth XXXX, represent range relative are expenses. XXXX Our taxes continue total taxes driven primarily In years XX% over benefits, and prior. X%, salaries see moderation of as expected same-store together to we is property operating and expense to by property

insurance. XXXX Salaries in area of and to have in to discussed. states, expenses, heard currently only property benefits X% And significant statutory insurance premium as the overall are is increases as you due represents liability from expected Jennifer increases operators, difficult. other operating X% in rates expecting in for very increase many our Also, many while the of we are both and environment wage

currently the six And the year. the guidance. included guidance, in commence awarded management finally, development commence of third-party third-party for four construction the of $XX and $XX at of construction the projects end This commence projects revenue million midpoint two fee development and range our at guidance assumes million high end in to low of is projects at

supplemental, and of noted QX occur projects on of recognition our to these anticipated fee commencement As S-XX not Page XXXX. of the or is until associated QX

third-party fee was more and decline contribution $X.XX income ACC revenue by noting assumed Disney It of third-party the any represents XXXX in achieved that a is the for net approximately new versus year. While a highest income for expense XXXX, worth in XX% XXXX. in record gross-up, level prior than the FFOM

the back I that, question-and-answer it to start With portion of call. will operator the turn the to

Operator

Goldfarb now answer session. begin from the will We Please first comes Piper [Operator and he question Alexander ahead. question go Instructions] with Sandler.

Alexander Goldfarb

morning. good Hey,

questions. two So

the the First, front, guidance end, reasonable. Daniel, mid sounds that upper to on understandable,

you some what to low in you and Texas, also in better understand you I change end. mentioned don’t charge then mentioned said but can few you And gets a markets. you know Just want California, if the that fees to

could provide the that is that? So then, causing end a guidance? of really what FFOM low perspective is little if the Or And you on driving what low just end? is the

Daniel Perry

we is and charge diminution that range, at lease-up into obviously admin Sure. have the Other York. seen income is end, are end low of where in in assuming at of that the in the X.X% lease-up during our New the low come on X% fall. the we a to take ability When you to look the variable certain fees a for we types we app consideration

XXXX, the as XXXX for when the year. started year XXXX with we academic up started leasing That academic

the represents the the flow of year, of So two rest first primarily. it this through will academic which quarters year

amount have over to expense and On control the in. where some range and on we least that come property want primary side, obviously, ultimately those taxes the thing is of provide

and vacancies some where extent. to for of don’t, allow in we also and then uncontrollable insurance we utilities in course, have on a payroll other certain where and terms Of variability we like

I also the four, where high end, at prepared low the new third-party. talked end, on six. we remarks, about, two year assume only assume in the and assume during We projects commence my we at the at midpoint,

real drivers of range. So those are the the primary

Alexander Goldfarb

second gets And the that Okay. point. to then, me

But as year noisy You year, range. results was you pre-leasing. guys introduced ago, updates quarter. a guidance at example, quarterly quarterly if guys toward at finished it the of guys your few yet, using years for FFOM last end, on look the from back And upcoming but year an pulled upper the you the a end we guidance over your

almost guys a and So would is as thought better business seem you your better call, better you an guidance, you about ops, the to to expense today all about on like talked quarterly suited better control, guys, like providing it annual. annual leading

as do to away market term think versus the as annual? quarterly, how weigh you that getting the that, you So Street balance Or about how you to short for those take ability think that guys -- does from you have the queues full-year the do outperformance? drive is

Daniel Perry

Yes.

provide correlation leasing disclosure was thinking were elected leasing because we So best performance. felt to consistent When like piece updates ultimate we quarter, wasn’t those with we obviously, not outcome, each that practices. between noise our disclosure that and velocity that that creating about of are was and very disclosure seeing we really little the always

a out, our obviously, bigger since quarter and one was We range from timing very we third-party we can next, FFO fee from income, When standpoint, to piece guidance public. have started the a quarterly never from went given of easily. that

the less the thought total smaller seasonality to and some business, disclosure a forward that for it the we being in of at properly alleviate terms when additional difficulty one-quarter of able Street model with that looked creates And a some anticipate to help the of volatility. piece be our we pie, Now, would of look that.

we why guidance. of decided that that is add piece So to

Operator

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

Nicholas Joseph

that payment neutral on expenses having I the impact net Daniel, then I process Thanks. positive resident on to impact think, revenue had NOI. and a growth and, of the outsourcing previously talked think you but a negative about

and on if just numbers. update impact an could we XXXX that So on any get wondering

Daniel Perry

Yes.

you change growth the portal our and will that So, year, had net implementation of causing the talked kind about - of last the rental or the rental in to expense new but over if of remember, neutral operating growth revenue paper anticipation the a we NOI. expense

should look At implementation bps for to the I time, XX or with lower, growth full the we it of our expense our net expected higher revenue growth neutral. NOI it, XX make and a lower say, look bps

really As we gradually we much we experience rolled didn’t our and to customer out the too we so that customer have to and next-gen preparing disruption been make that, it create implement to working wanted sure on that system service.

decided growth that in much will and fashion, revenue more So roll think unnoticeable muted metrics. change a we to more in out a we have those cause which staggered expense and

We So much. you whole don’t variability for associated in are that that as really of shouldn’t have we guidance notice giving it a figures the XXXX. with lot

Nicholas Joseph

that, in Thanks. about guidance Can G&A driving Maybe XX% talk versus on is you it what up looks that? year. like about just is last XXXX

Daniel Perry

Yes.

saw as G&A by growth initiatives But talk lot us while. showing the part investment system. for So of have and the investment have which and in into primarily our of you and really along ASG a incorporated that you about are is heard next-gen that in line about platform our we in what privacy with a for our mentioned, into XX.X% driven system, operating we next-gen item XXXX, is is that

of a investing dollars get When that those are development during next-gen systems. platform IT you look at how or you that capitalized FFO, hits in the a our of lot the

program. software a of development actual are costs capitalized those of Some

then to to costs those expenses. Others deploy get are your you systems, next-gen they expenses. amortized start that to implementation get And when accrued

next-gen deployed, financials. are a be in of to seeing costs we And therefore, to of starting so, all of that what and amortization lot accrued is our starting now getting the is XXXX are hit you those

We of of when a also SaaS SaaS developers, developing a to or portion SaaS component it from of instead is you are actually are third-party incorporating next-gen software licensing platform. in-house. our

systems there those. We much to it in-house, and are but be we are developing efficient go of us some our that more license ahead for decided others would

hit a And you being of bit immediately. move to there. the so, of some fees SaaS-based, those next-gen with have little a factor portion compounding And

$X.X It So driver that of XXXX. million really about the in is is it.

exclude to were about look growth you X.X%. If million, like that more $X.X G&A would

Operator

from Please go Green is John ahead. with Street question Pawlowski Advisors. next The

John Pawlowski

Thanks. issuance price, the current share Daniel, at is off equity still table?

Daniel Perry

a Yes, are at right discount NAV still trading we good now. XX% to

And certainly cap capital capital it and recycling so, the rate sense allocation strategy we like these low makes think valuations taking of the very here. four our our fund to of don’t advantage right development pipeline accretively. in market using ranges private We current

looking range, spread are yields economic You low-Xs to in an still rate above the really so X.XX% cap at the in and nominal relative good there.

so, with will like the sense we that And it change and/or see a use. fund And with equity, capital in joint of is to we we the model until makes public the we think recycling partnerships did valuation venture-type Allianz.

John Pawlowski

your saw a Okay, great. in A question this to you push lease-up your versus bit the you selection then, weaker fall Bill. ability last hoping Back could time portfolio for level. today. market rent supply sub-market Jennifer picture was XXXX, location, a than your at the similar or was I upcoming contrast

plus be stronger year similar, in than supply if we rental revenue expect like that is X% seems should wouldn’t and growth you demand a achieved academic it XXXX? XXXX. So why

William Bayless

Yes.

of year refinement oranges properties bit the to a in and revenue very you comparing in at a that than rental in time, point about Certainly, X%, the today as dynamic. little portfolio XXXX, you taken ACC-developed was and think that portfolio was the back in even supply of go apples positioned rate was terms mentioned, that the portfolio in similar that of total X.X% If I that exist better different is amount in place that that was.

as down, in closer has a percent supply about of purpose-built supply is to of new where then, were matured, XX%. advanced beds existing you the XX% market, while at XX% we if Certainly, back to do that dynamic enrollment, the today, the look amount to probably

we we NOI, that The look you XXX first only a rental rental in were from as growth bps actually look and that driving you - in go same-store thing during to our XXX includes annually lot revenue. are contribution to and revenue driver John one eight ultimately rental and discussing, a those at, period that when revenue when came the occupancy XXXX and through that performance of company rate public XXXX our of years the where driving you upside period back at to average averaging bps, metrics M&A,

from five delivering fast bps look largely you bps. development, been and through when assets with rental into years, But you off and XXX the basically the because development over And as we we have ability to actually to stabilized increased to we the on assets last have selling we forward have today, recycle to rate XXX push, that fully been only upside growing occupancy. have gone no

has actually contribution basis. occupancy to rental annual revenue growth so, been X bps on an negative And

pricing better of versus as of the where so, occupancy it terms in of much quality was positioned component again, is in that. in where grow today are upside portfolio the XXXX, without to we the And it and power,

point scale when terms of you the investment of and the statement XX has the drag growth about a years, X% actually first cost creating get basis to of growth to, go and bps how points capital growth one mentioned one had G&A recycling years also uptick typically that overall your scalability Daniel G&A, next-gen bps. the efficiencies by the X% the same-store to would basis XX efficiency in organization, we that and we XX through of last to XX earnings-per-share of the of the in growth, of which NOI through then because to on that X%, been in and five thing X% the also to take where you further that dynamic in versus in eight drive Now, Company, step in points contribution

importantly, compared about only we last And years period five where but been five-year period averaged earlier so, which, rate, revenue think a go-forward, the again profile weathered our look X.X. we has over to that more reference, to rental in years, has the really you growth contribution have five it at as the

contribution others having you when portfolio operated when the from the scale then those, of by for say, the as occupancy completely environment improvement our have look quality other term, through and at future taken to period a contribution of you by intent look okay, portfolio we, And dynamic in that is we advantage out the five-year all gone improve of bringing potential as we have where long to and assets and what industry the we mergers and been game purposes, has and the greatly. of acquisition the grow,

As coming at and billions of into capital as right the focused that dollars of now, mentioned, is the space is investment William that global taking longer-term place more development is is location in holds that versus we look product taking and is Class all of place. investing quality, merchant to core building quality that pedestrian development. in campus, much They better and terms mostly that A on are

rest the thing points we basis of the than and would year the year XXX that one from And to points continue better an track which Axiometrics’ tier is X tracking data, point pedestrian and the occupancy market. basis perspective, out XXX is, XXX out we in to markets properties, between your

driving a and the about, the have improving. rate last over talking in early driven first you long-term rental X% are growth years to growth years, rates, is years, because as the we in where NOI of saw look And metrics that is growth same-store by profile, slowdown eight so, X% that which strategic at that the the only lever Company plan the long-term seen the we five the and you is growth

growth comes as us The the long-term change. cycle eventually, real return will to value for creation

as back of better, M&A We XXX perform harvest a the the is exists at the on assets more the to and will us And that for basis back of to still continue game point from those in are is game. products long-term M&A in location upside value be we those point better, quality basis, to XXX basis we better. when products that

to we beyond we that is the hard long-term But for that hopefully don’t is only the think going long-term the systemic that the current a position rate. our is or in variable it so, needle space And the the where industry move forward. are, environment rental condition consolidator given of X% is

John Pawlowski

I occupancy to XXXX study because Sure. where same. just I color. was appreciate to case all and wanted a rely it quite had year supply rate full rental go back on was to is you the the the and

So just interpret schools. the to percentage you it that and can housing did student have Again, you - rate. that student push purpose-built I maturation the allow better is of

a So X.X% is can’t naive your I similar are guess, why and or to supply question this better? year down is, if you do rate schools growth ‘XX

William Bayless

would I to Yes, in part again, and statement that, a of is point general as did I remarks. my prior

than years the XXXX, bps. and in in about supply five in back existed have last improved we pricing that we the power that did better have We XX environment

at of transactions. is, those, of approaching John, about our you have portfolio a our ACE from XXXX as about one ACE we portfolio, talked is it When now revenue think can as third we we look dynamic coupon-clipping products, are all that on-campus changes, at X% the market. partners being price our and growth university looking that you out of rate the on And growth are rental more that you

your we situation is in where revenue of so that hardly going And kind no of terms governor. have while on being limited are a campus, to ever you growth you in X% downside, are are negative there

off-campus portfolio type we that early virtually into of ACE today much coupon-clipping a was so, reduced-risk, it the versus phases see percent the of higher properties that in versus ASU. falls And where all XXXX, in

Daniel Perry

life a was the the ACE, you if on see that because to average. one quick, portfolio real it at company pretty kind was much Yes, of five correct. rental IPO, look range the growth, public our the to clearly going the of a less X.X% when it back can And if really of as years can I you X% add out lay first you of all the rate with when being of X%

range more today, X.X%. like is look you X.X% If to

So, tighter still just increase, average X.X% a a band. but

similar day, But tends And consistent. the influence growth. so, end ACE, seeing of be we of more of the to because are still it just the at rate the

William Bayless

note number priced. one Florida. under our year new supply growth of rate in markets, supply, John, X% year, the this to this in when Gainesville thing And are last is one And actually where currently we market lease-up at have we Gainesville, terms that you new is so look this is way in the supply in

is is a supply new in market has years we XX% over that so, beyond the and and Gainesville that average talk certainly, And supply that about. of significant seen

on, this we new which in price power assets million below to are that supply we on that XXX on, still have average in own that But pricing all now there, continue dynamic. million rate product but to rental points particular pedestrian coming are at extremely well positioned, that off-campus, are case, market XXX the

product the that very kind and to portfolio demonstrates is kind ability up so, diverse processes market thought that XX strategy just states roll how is able it of being a push market versus of on so over positioning And that generalize by rate much drives to it.

John Pawlowski

Daniel. Thanks Bill. Thanks great. right, All

William Bayless

Thank you.

Operator

ahead. from with is The next Drew go Please question Baird. Babin

Drew Babin

morning. good quick A question Hey, on...

William Bayless

morning, Good Drew.

Drew Babin

pure pure On final rent indicated XQ like it leasing of the opening leasing Good whereas the X.X%, itself, results growth X.X%. - growth results morning. looks or was rent about

pace in other articulated relative the quarter helped income know, October? top guess, that rate of But in I what on kind fourth I final of So the to was up.

Daniel Perry

Yes, same-store the lease-up, you remember, Drew, the giving on we this are group. of giving are to results we you always it calendar deal, year the forward is the where whenever usual

XXXX. months on that impacts we months, eight the XXXX So, for of were are because X.X those fall XXXX, results lease-up group same-store reporting it

want we to same-store quarter, Fourth the we the on period are longest of covers still sure you So group XXXX the we that make time. really obviously, reporting are giving that group.

had fourth you So reporting quarter the are differences group between two we group for on and that that the lease-up.

rate less those and yet, and resulted a not actually XXXX rising also was a it same-store group, XXXX rising the disposition. and the that properties a was growth. more In pulled little fall One, because Landmark out Landmark in lease-up occupancy growth XXXX little in same-store properties there for both

XX less XX they little group rate X.X% X.X% the So growth having at and see, that pickup occupancy you in for higher why and rate XXXX pickup is little in full a versus are not bps there, when a growth bps occupancy. at

Drew Babin

project? housekeeping State more kind me there. delay? just just the the Okay. of a regrouping third-party I’m sort do development from in what looks the curious or that clarification a there. a think Or there? project of to It Is in Texas how item. it going on is disclosures you longer And is like Appreciate about XQ and was one that

William Bayless

the discussions a was and looking That just at perspective. to and other from a is given and university potentially it board doing themselves, available funding them cost funding regrouping, Yes. capital and mediums of

to we There future come phase is the expect be be may the on over timeline first We phases be don’t we it. that one. So thinking see to that back. involved were with

Drew Babin

sense anything is should coming there discussions happens Okay. current this is else development anything where assume in a is and we the the down really... it similar you XQ or Or sort there may of occur not in once while just And then, pipe? third-party disclosures

William Bayless

in I further In how history, of in route And in gone strategic once their boards they different award. governing in in one after while. a capital ahead happens own Company’s this thinking would terms be has third university just the think gets of allocation of a think ultimately on years the sometimes the some that the cases, It front. the XX

is occasionally, it it happen. rare. does so, And But

Operator

go America. Please question of Shirley is next from The with Bank Wu ahead.

Shirley Wu

taking for Thanks the questions. guys. Hey,

first question is Austin. my So on UT

expectations as year? that curious school how is are market and Just the upcoming your for what performing to currently

William Bayless

in again, Currently, be Austin, is And the markets. continues well. going Yes. supply progress XX our top leasing to

were - The in developments bit new two year. in UT we the leases up. where come have the immediately overall market of We little are pre-leased, last a been virtually new which that everything are trend has Austin; ahead place already

the X,XXX we We do behind. ahead. properties same-store mentioned, point lease-up about as see I in the throughout this overall are beds market, being running And

market capturing successfully are share. we So

certainly of are in were And we to last a believe so, year. position we build where off we

implementation execution supply plan, it new our are with to and it leasing and time, marketing the and takes we And of is given where do are, point pleased But in continued end. we through are very overall, that. still the there to at to progress our this we in pacing lease-up early But date.

Shirley Wu

Got it.

of that there to end of you of that were schools fall So potentially those what that was leasing, just X.X%, that are see now, happen, curious, the would low terms could are getting are that any if to I cautious there in schools more cracks? it Not do? but

William Bayless

where two and when underwrite little typically, as it, the than we potential that a of color are. of at finishing look is without specific any end it range, schools, guidance we bit look year we hiccup as to the that this At the that broader at all about you giving in a are the overall out it we performance have, rather at in of leasing low time, but markets strong all just and think not point

supply when this the was markets, NOI where major especially from those we as the of is look coming where doing laid talked especially lay the our driving that included contributing dynamics The about, it And just new is average as well that markets year, to in, and average, out we mentioned out, relative that that four I XXX so, and beds over us at again Austin, really are, well we supply up, and ahead. supply. and modest only are for new we have was pacing which

Not couple lays that pretty pacing new X.X% a are well. Huntsville, where are the markets look than this and environment for at X%, we in markets talk Corvallis are Fort supply Collins, where have the we we concerned. those over year, behind so we of of all we less us And When and slightly not overall market and NOI. just are behind, where

clearly lease year, last up, about this position. out we as good pricing some product year, where we largest so, the felt the markets, our started where And had We supply. saw we laid was Gainesville

through As have I the rate year. Gainesville this there, in we growth lease-up X% mentioned,

risk Company very supply current far, and out with we to exposure from up a velocity large lay and things so pleased with how perspective the are how that how So, matches NOI is contributors our to going. and in

Operator

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

Austin Wurschmidt

everybody. morning, good Hi,

your prepared or of last of you view if And any just demand those pretty across remarks, from the changes as mentioned trended in And to made some year how significant have that you fees. in some curious wondering expenses. increase also larger marketing impact then pull-forward curious, being relative a from markets. you application Just a have concessions

William Bayless

to Yes. the of a context the QX fee obviously, that in in giving leasing And in it again, the made of velocity of was guidance, good terms are evident had of we terms we success velocity early but very discuss volume leasing. not it our in

year, QX and pull-forward Daniel see that evidenced mentioned, a of saw was app and in would so, as the strong revenue this of to off certainly and leasing that kick-off as that the typically you it And you that item. line that of fees some the QX hit did in increased admin XXXX, start

role stronger to did is a expense extent, correlating obviously, we to think, indeed and drive any velocity in drive social not say, digital the we are able media the would undertake, on. velocity Certainly, There related offset And have marketing that that. you to to early. that I efforts early that helping

opportunity marketing so. manage do season to to you help in expenses later the leasing the does if itself provides That

something finish long to good hopefully. strong, go, way a out we lease-up will and we feel the got we And about, but have

Austin Wurschmidt

certainly today Appreciate time. sounds the years. like it in PX pipeline, it. limited next over will But out And some several that then, Daniel, are laid William evaluate you off-campus a there opportunities vibrant your capital and are fairly needs

despite it any think pipeline beyond? million you relates pending, asset to don’t and the is XXXX I backfilling have fact believe, $XXX dispositions, sales, that So beyond we how about as should in the development the

Daniel Perry

Yes.

page, or million capital fund million see the the four with given allocation over that funding leaves complete XXXX, us once needs $XXX Varsity about the we you as So, in in this years. $XXX $XXX we to have disposition million that our to through next left funding our supplemental on quarter, left

much disrupting need. about, year would as The delivery developments pretty address much million we as match to so want the of we that can for disposition $XXX talked with flow As of to the our we the FFO not we try growth. have really this are those time

those, So and you of range year. which would through XXXX in a should to the be remainder the look XXXX for $XXX million of

generates I maintains said, most we pursue, accretive sheet, capital up sources the want have look our funding as as we health return Obviously, also additional of way at that all come for the that to a can. that of we will transactions we balance in but

Austin Wurschmidt

And then just for last me. one

when your the or UC of phase that? in that and update the transaction do completed you Berkeley, progress get probability of to could the any ACE of relates that sense timing conversations out it first As an with be

William Bayless

terms such And Yes. It don’t phase, is still third-party would And with the in equation third initiative and a we the if not a completely party it ACE. mix long-term saw first pre-development a wide of ground is the and still in be for again, have open shovel you so definitive large that in phase. ACE of the in of it ultimate is that. surprised multiple phases

Austin Wurschmidt

Thanks Bill. it. Appreciate

Operator

One Neil go question ahead. from Malkin Instructions] The is Securities. next Capital with [Operator Please

Neil Malkin

universities, question of is overall current or rerouting whims you an of morning. the live-on perspective requirements can are you demand of or sometimes Good terms you just from sort underwrote unexpectedly in subject to risk. what landscape Hey, on guys it can or anything basis. It My like be sort changing first an hit guys. that the previously of long-term even about like have a impact year the that operating seems on

So to at you at ahead risks moment’s you kind what do those throw that a universities minimize do of of notice? get or potential could

William Bayless

the terms usually, institutions. those we those open what a approach where at news our also And risk with portfolio, public there of they within thrown the in we ACE look create large land-grant you great Yes. universities large the not And program. only how especially for percent are deal supply is, are they quickly. opportunities are we as risks of And market business, at good And and enrollment. beds off-campus is especially land-grant XX% our where typically public your institutions us

students. housing year the year house don’t provide enough of for students. And students, so, reason because first all the public they first only have student have universities is looking large to situations, the is but incoming in requirement rather for a the only the they most first none college those not year And do majority beds housing of are of to

driver learning students fronts, big live that so as living whether ACE universities colleges, that program of that first possible year in for of and do to a their about and a to the also, so, being next off-campus class prefer, good our transactions their successful something positive to is, on-campus opportunity as environment on-campus, students year that of when hall is the we in university classroom we an them they advantage are in have a to who or prefer are we And have talking residence first continue a have immersed for all in an is environment, getting on and that on. the

feeder having a program, a university, as us with they partnership students a on-campus even when on-campus a the them we ACE strong and it, privately, supply as and are program students not opportunities. year housing is at ensuring for in so are create one, our in living first And secondly, drives And what the system. look we positive as that possible and off-campus many

out And a that where positive at our more university we so, announces that X,XXX now beds university. continue are going students X,XXX is that for to that similar to the living look environment year as to learning there they properties position are on-campus the being very X,XXX of are in students an build assume first first to of in delivery, for we more successful that off-campus living year the absolute example, take learning environment year while moving that house one a market let’s students, may that

at objectives and but as what our as risk competitor, aligning allows us creating rather is their them. success and success university understanding or almost we look with them have And never a opportunity to with so, the

as driver the great as aligning of success. in think we may looking you first not risk really in is a their advantage is a it a so, actually And competitive with where industry and at create

Neil Malkin

great. Okay,

Are those would $XX parcels think Any the start near like term? sheet. assets? me, Any land great. adjacent I Next one million balance have of there guys color be on for those likely current you of to to

William Bayless

those of that parcels Yes. contiguous properties are the again, The immediate pipeline. None of we to have see land land you there, bank them in owned. are, numerous

being Of land, course, privately transactions. owned though are off-campus they

And proper into at leases. And execute time category the we of transactions look those. always are the is in to fall land those that that on-campus on none would when so, via

Neil Malkin

Do successful me. assessment? into real last And OpEx guidance tax one you guys your Okay. bake for to appeals estate

Daniel Perry

our believe day, Yes. At we to the are look we targets try at of property the end for tax outcomes where final of assessments.

involve an that does appeal. Sometimes of

have we in. that are are lot conservatism by advised a where Sometimes where that appealing are we little out. that experts are because confident might come are versus it, A we we not of we in different consultants tax real the regions

our that out, we currently about feel depends come how a it of are to And appeals projecting process. variety is all on levels there so, current and we

Neil Malkin

Okay.

of it maybe So seems conservative just... bit, kind little like but a do you

Daniel Perry

ones and We really we others. the feel on the confident about do on don’t we

Operator

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

William Bayless

our how coming investor in you give Disney to you at updating efforts May. of the again, work forward you year. many and in is forward Thank their an as we all I American you. later where the by the year We on hard to thanking Thanks great upcoming Campus and conferences for and team look producing we in much. And so started, another seeing want end of continue update look to opening

Operator

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

may disconnect. now You

American Campus Communities (ACC) 19 Feb 202019 Q4 Earnings call transcript