American Campus Communities Provides COVID-19 Interim Update in Advance of REITWeek 2020
American Campus Communities, Inc. (NYSE: ACC), the nation's largest owner and manager of high-quality student housing properties, today provided a COVID-19 interim update on universities' planned delivery of curriculum for the fall, leasing for the 2020-2021 academic year and progress on rent collections in connection with REITWeek 2020: NAREIT's Investor Forum®, which will begin on June 2, 2020.
Universities' Plans for Fall Curriculum Delivery
As reported by The Chronicle of Higher Education, 47 of the 68 universities served by the company's properties are planning for a return to in-person classes for Fall 2020, while 12 are still considering a range of possible scenarios or a hybrid model. At this time, only three universities the company serves, which are part of the California State University System and account for only 3 of its 166 properties, are planning for primarily online classes.
Academic Year 2020-2021 Preleasing Update
As of May 31, 2020, the company's same store owned portfolio was 82.6 percent preleased compared to 84.9 percent preleased for the same date prior year.
"We are very pleased that since our earnings call on April 21st, we have signed more than 5,500 additional leases bringing us to a total of over 10,000 leases signed for Fall 2020 since COVID-19 was designated a pandemic in mid-March," said Jennifer Beese, American Campus Communities COO. "At universities planning for in-person classes we are currently 83.1 percent preleased as compared to 83.8 percent preleased in the prior year, while the remainder of our portfolio is 81.0 percent preleased as compared to 88.6 percent in the prior year. Only two of our same store properties are impacted by the California State University System's decision to hold classes primarily online in the fall, and one of those properties is fully leased under a three-year master lease with San Diego State University. We have also commenced our no-show management process a month earlier than usual in an attempt to identify and mitigate any cancellations that may occur. We view this preleasing activity with cautious optimism and believe that most students intend to return in the fall regardless of the curriculum being delivered in-person, online, or in a hybrid format."
COVID-19 Monthly Delinquency and Resident Hardship Program Update
With regard to the company's private off-campus properties and on-campus 12-month ACE® apartment communities, approximately 94.8 percent of residents made their April rent payments, representing April rent delinquency of approximately $3.0 million. In addition, through May 31, 2020, the company estimates that approximately 93.3 percent of residents have made their May rent payments, representing May rent delinquency of approximately $3.8 million.
As previously announced, the company has formed a Resident Hardship Program to provide relief on a case-by-case basis to those residents and families who have endured financial hardship due to COVID-19. For the months of April and May combined, the company has granted approximately $4.3 million in rent relief to over 4,800 qualified residents.
As reported in the company's first quarter earnings release, in collaboration with its university partners, the company has agreed to refund a portion of students' rent at certain on-campus ACE properties that primarily have lease terms ending in May. The company is still working through the ultimate amount of refunds that will be provided, but the company continues to believe refunded revenue will be in the range of approximately $13 to $17 million.
"We continue to be encouraged by our preleasing and rent payment activity over the last two months," said Bill Bayless, American Campus Communities CEO. "As the majority of universities plan to return to in-person classes in the fall, they are making those plans under the assumption that some degree of social distancing and limitations on group gathering size will likely continue to exist. Shrinking in-person class sizes, holding larger lecture hall classes online, alternating in-person lectures with online lectures and other creative solutions are being incorporated into their operational plans. As universities seek to de-densify their older, traditional community bath residence halls, American Campus has put in place an extensive outreach program to make sure universities in all of our markets are aware of the amount and availability of private modern off-campus housing that is well-suited to achieve CDC guidelines and to facilitate students' desire to control their own environment and sanitization. We hope this outreach and information will aid universities in achieving their goals of safely bringing students back on-campus this fall."
About American Campus Communities
American Campus Communities, Inc. is the largest owner, manager and developer of high-quality student housing communities in the United States. The company is a fully integrated, self-managed and self-administered equity real estate investment trust (REIT) with expertise in the design, finance, development, construction management and operational management of student housing properties. As of March 31, 2020, American Campus Communities owned 166 student housing properties containing approximately 111,900 beds. Including its owned and third-party managed properties, ACC's total managed portfolio consisted of 201 properties with approximately 137,900 beds. Visit www.americancampus.com.
In addition to historical information, this press release contains forward-looking statements under the applicable federal securities law. These statements are based on management's current expectations and assumptions regarding markets in which American Campus Communities, Inc. (the "Company") operates, operational strategies, anticipated events and trends, the economy, and other future conditions. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. These risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward looking-statements include those related to the COVID-19 pandemic, about which there are still many unknowns, including the duration of the pandemic and the extent of its impact, and those discussed in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2019 under the heading "Risk Factors" and under the heading "Business - Forward-looking Statements" and subsequent quarterly reports on Form 10-Q. We undertake no obligation to publicly update any forward-looking statements, including our preleasing activity or expected full year 2020 operating results, whether as a result of new information, future events, or otherwise.