American Campus Communities, Inc. Reports First Quarter 2021 Financial Results

Rhea-AI Summary

American Campus Communities reported Q1 2021 financial results, with net income of $15.6 million ($0.11 per share) down from $80.9 million ($0.58 per share) in Q1 2020. Revenue fell to $232.7 million from $249.4 million, reflecting COVID-19 impacts. The same store net operating income (NOI) decreased by 11%, with a 6.4% drop in revenues. The company commenced new projects at Drexel and Concordia universities and released an ESG report, indicating a commitment to sustainability. The preleasing update shows improved velocity in leasing activities compared to the previous year.

Positive

• Commenced construction on new developments at Drexel University and Concordia University.
• Preleasing velocity is tracking in line with broader industry trends and outpacing market averages in most locations.

Negative

• Net income dropped by 81.7% year-over-year.
• Revenue decreased by 6.7% compared to Q1 2020.
• Same store NOI decreased by 11.0%.

American Campus Communities, Inc. (NYSE:ACC) today announced the following financial results for the quarter ended March 31, 2021.

Highlights

• Reported net income attributable to ACC of $15.6 million or $0.11 per fully diluted share, versus $80.9 million or $0.58 per fully diluted share in the first quarter 2020.
• Reported FFOM of $79.5 million or $0.57 per fully diluted share, versus $97.6 million or $0.70 per fully diluted share in the first quarter prior year.
• Same store net operating income (“NOI”) decreased by 11.0 percent versus the first quarter prior year, as the COVID-19 impacts on the current academic year’s occupancy levels resulted in a 6.4 percent decrease in revenues and only a 0.5 percent increase in operating expenses.
• Awarded a third-party on-campus development project at Drexel University for the renovation of Kelly Hall, a 1960s-era community-bath residence hall.
• Commenced construction on a third-party on-campus development project at Concordia University.
• Published an Environmental, Social, Governance (“ESG”) report outlining the company’s year-in-review of ESG initiatives and its ongoing commitment to healthy, sustainable environments conducive to academic achievement.
• Awarded two National Association of Home Builders’ 2020 Multifamily Pillars of the Industry Awards for the Best in Green Market Rate Multifamily Community for Plaza Verde in Irvine, CA, and the Best Student Housing Community On Campus for The Academic and Residential Complex located on the campus of the University of Illinois at Chicago.

“The year is off to a good start with operating results trending well relative to our expectations,” said Bill Bayless, American Campus Communities CEO. “We are pleased with the positive signs we are seeing in the business fundamentals as students continue to return to campus this spring and universities continue to make announcements regarding plans for a return to in-person activity in Fall 2021. We are also excited to see universities begin to turn their focus to the future, as evidenced by our on-campus public-private partnership announcements, with a new project award at Drexel University and commencement of construction on a new development at Concordia University in Austin.”

First Quarter Operating Results

Revenue for the 2021 first quarter totaled $232.7 million, versus $249.4 million in the first quarter 2020, and operating income for the quarter totaled $46.4 million, compared to $115.5 million in the prior year first quarter, which included a $48.5 million gain from the disposition of one owned property. Excluding this gain, the decrease in revenue and operating income was primarily due to the impact of COVID-19 on the company’s owned properties’ occupancy for Academic Year 2020-2021. Net income for the 2021 first quarter totaled $15.6 million, or $0.11 per fully diluted share, compared with net income of $80.9 million, or $0.58 per fully diluted share for the same quarter in 2020.

FFO for the 2021 first quarter totaled $81.2 million, or $0.58 per fully diluted share, as compared to $95.9 million, or $0.69 per fully diluted share for the same quarter in 2020. FFOM for the 2021 first quarter was $79.5 million, or $0.57 per fully diluted share, as compared to $97.6 million, or $0.70 per fully diluted share for the same quarter in 2020. A reconciliation of FFO and FFOM to net income is provided in Table 3.

NOI for same store properties was $123.6 million in the quarter, a decrease of 11.0 percent from $138.9 million in the 2020 first quarter. Same store property revenues decreased by 6.4 percent and same store property operating expenses increased by 0.5 percent. NOI for the total owned portfolio decreased 11.3 percent to $124.5 million for the quarter from $140.3 million in the comparable period of 2020. A reconciliation of same store NOI to total NOI is provided in Table 4.

Academic Year 2021-2022 Preleasing Update

“As anticipated and consistent with our comments last quarter, we’ve begun to see an acceleration in weekly preleasing velocity compared to the prior year, as we are now approximately one month into the period when leasing activity dramatically slowed at the beginning of the pandemic last year,” said Jennifer Beese, American Campus Communities COO. “While there remains a significant amount of work to do before the next academic year begins, through March our preleasing velocity is tracking in-line with the broader industry, as represented by the “AxioMetrics 175” markets. More importantly, in the majority of our markets, our velocity continues to outpace market averages. Additionally, asking rental rates for our portfolio as a whole remain in-line or slightly above prior year and operators in most markets continue to be patient in terms of their pricing policies. We remain cautiously optimistic that we will experience increased occupancy levels this Fa

FAQ

What were the earnings results for ACC in Q1 2021?

ACC reported net income of $15.6 million or $0.11 per share for Q1 2021, a significant decrease from $80.9 million or $0.58 per share in Q1 2020.

How did revenue for ACC change in Q1 2021?

Revenue for Q1 2021 was $232.7 million, down from $249.4 million in Q1 2020.

What is the same store net operating income (NOI) for ACC in Q1 2021?

ACC's same store NOI decreased by 11.0% in Q1 2021, totaling $123.6 million.

What developments is ACC currently working on?

ACC has commenced construction on developments at Drexel University and Concordia University.

How is ACC's preleasing velocity for the 2021-2022 academic year?

ACC's preleasing velocity has improved and is tracking in line with the industry average, exceeding market averages in most locations.