CCG Reports 3Q12 FFO of $0.19/Dil. Share & 27.1% Increase in Total FFO

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CCG Reports 3Q12 FFO of $0.19/Dil. Share & 27.1% Increase in Total FFO

- 93.3% Occupancy Across Entire Wholly-Owned Portfolio -

- 43.8% Increase in Student Housing Rental and Service Revenues -


- 6.4% Increase in Same Store NOI -

- Continued Growth with Six Projects Consisting of 3,564 Beds for Delivery in 2013 -

- Provides Update to 2012 Outlook -

CHARLOTTE, N.C.--(BUSINESS WIRE)-- Campus Crest Communities, Inc. (NYS: CCG) (the "Company"), a leading developer, builder, owner and manager of high-quality, resident life focused student housing, today announced results for the three and nine months ended September 30, 2012.

Highlights

  • 27.1% increase in quarterly total Funds from Operations ("FFO") year-over-year
    • $0.19 per diluted share for the third quarter
  • 43.8% increase in year-over-year quarterly student housing rental and services revenue
  • Positive gains in wholly-owned same store results:
    • 6.4% growth in Net Operating Income ("NOI") for the quarter and 5.5% year-to-date
    • 210bps increase in average quarterly occupancy to 92.0%
  • 27 wholly-owned operating properties (excl. 2012 JV acquisitions) at 92.8% occupancy, up 380bps versus a year ago
    • 1.7% increase in average rental rates for 2012/2013 academic year
  • Development yields in-line or above internal expectations
    • Six 2011 deliveries achieved average occupancy of 89.3% with an expected weighted average second year yield of 8.0% to 8.4%
      • Five wholly-owned properties at 91.6% occupancy with expected yields of 8.3% to 8.7%
    • Six 2012 deliveries achieved average occupancy of 87.0% with an expected weighted average first year yield of 9.2% to 9.6%
      • Wholly-owned properties at 97.5% occupancy with expected yields of 9.5% to 9.9%
  • 22.4% increase in total beds with addition of 3,820 beds from 2012 deliveries
  • Six new properties commence development for opening in 2013/2014 academic year for a total cost of $162.7 million ($82.8 million for wholly-owned and $79.9 million for joint ventures):
    • Fort Collins, CO - Wholly-owned, on campus at Colorado State University
    • Muncie, IN - Wholly-owned at Ball State University
    • Pullman, WA - Wholly-owned at Washington State University
    • Indiana, PA - Joint venture at Indiana University of Pennsylvania
    • Norman, OK - Joint venture at University of Oklahoma
    • State College, PA - Joint venture at Penn State University
  • Purchased remaining interest in two well-leased joint venture assets with proceeds from July 2012 common stock offering

Financial Results for the Three and Nine Months Ended September 30, 2012

For the three and nine months ended September 30, 2012, FFO and Funds from Operations Adjusted ("FFOA") are shown in the table below.

FFO/FFOA

  
Three Months Ended September 30,

($mm, except per share)

  2012

Per share -

diluted

 2011

Per share -

diluted

FFO$7.4$0.19 $5.9$0.19
FFOA$7.4$0.19$5.9$0.19
Nine Months Ended September 30,

 

 

($mm, except per share)  2012

Per share -

diluted

 2011

Per share -

diluted

FFO$17.7$0.52$16.1$0.52
Write-Off of Unamortized Deferred Financing Fees0.90.03--
Elimination of Change in Fair Value of Int. Rate Derivatives--(0.3)(0.01)
FFOA$18.6$0.55$15.8$0.51
 

A reconciliation of net income (loss) to FFO and FFOA can be found at the end of this release.

For the quarter ended September 30, 2012, the Company reported total revenues of $34.5 million and net income attributable to common stockholders of $7.8 million, compared to $20.4 million and $0.4 million, respectively, in the same period in 2011.

"We are pleased to post strong results for another quarter. Our people-focused investments and initiatives are continuing to positively impact our Company. This is clearly seen in our occupancy, rates, margin and NOI, but perhaps not as obvious is the energy, morale and quality of our hard working associates," commented Ted W. Rollins, Co-Chairman and Chief Executive Officer of Campus Crest. "Our vertically integrated platform enabled our teams to deliver six new properties and an expansion of an existing property at occupancies that result in our investments achieving or exceeding our yield targets. Additionally, we expect the properties we delivered in the third quarter of 2011 to achieve our occupancy and related yield targets for a second year of operations. As we begin our third year as a public REIT, we continue to focus on improving operations and growing our footprint, while maintaining a conservative capital structure and making a meaningful impact with our environmental and social initiatives."

Operating Results

For the three and nine months ended September 30, 2012, results for wholly-owned same store properties were as follows:

 Same Store Results

  
Three Months Ended September 30,Nine Months Ended September 30,
($mm) 20122011% Change 20122011% Change
 
Number of Assets21212121
Number of Beds10,52810,52810,52810,528
Occupancy92.0%89.9%2.1%91.5%89.3%2.2%
Total Revenues$14.5$13.85.0%$42.9$40.94.8%
NOI$7.5$7.16.4%$22.6$21.45.5%
NOI Margin51.8%51.1%0.7%52.6%52.3%0.3%

The improvement in same-store NOI was driven by higher occupancy and increased rental rates partially offset by higher operating expenses.

NOI margin is calculated by dividing NOI for the period by total student housing rental and services revenues for the period. A reconciliation of net income (loss) to NOI can be found at the end of this release. In addition, details regarding same store NOI and calculations thereof may be found in the Supplemental Analyst Package.

Portfolio & Leasing Update

As of September 30, 2012, the Company owned interests in 39 operating properties with 20,884 beds. The portfolio overview and 2012/2013 occupancy status is outlined in the table below:

Portfolio Overview

           
2012-2013 Leases2011-2012 LeasesRental Rate
Property   Properties  Units  Beds Signed1 % Signed1 % Increase2
 
Wholly-Owned - Operating275,15613,88412,88992.8%12,35189.0%1.7%
 
Wholly-Owned - Operating Acquisitions in 201224081,08899691.5%1,07098.3%1.3%
 
Joint Venture - Operating4   760  2,092 1,700 81.3% 1,735 82.9% 2.8%
 
Sub Total All Operating Properties336,32417,06415,58591.3%15,15688.8%1.8%
 
Wholly-Owned - 2012 Deliveries 336841,9641,91597.5%00.0%n/a
 
Joint Venture - 2012 Deliveries3   662  1,856 1,407 75.8% 0 0.0% n/a
 
Sub Total 2012 Deliveries61,3463,8203,32287.0%00.0%n/a
                      
Total Portfolio   39   7,670  20,884 18,907 90.5% 15,156 88.8% 1.8%
                      
Wholly-Owned Portfolio   32   6,248  16,936 15,800 93.3% 13,421 89.6% 1.6%
 
1 As of September 30, 2012 and September 30, 2011, respectively.
2 Rental revenue per occupied bed growth for the 2012-2013 academic year over the 2011-2012 academic year.
3 Includes a 160 bed expansion at Nacogdoches that is not counted as a separate property.

All 39 properties were built, or are being built or renovated, by the Company or its predecessor. The median distance to campus of the portfolio is 0.5 miles with an average age of 3.1 years as of September 30, 2012.

Development and Acquisition Activity

Wholly-Owned and Joint Venture Development

The Company delivered its 2012/2013 academic year projects, with a total cost of $162.9 million, in the third quarter. Details of these developments are as follows:

2012/2013 Academic Year Developments

          
    
ProjectOwnership  University Served  

Total

Enrollment1

  

Miles to

Campus

  Units  

New &

Ph. II

Beds

  

Total

Beds2

  

Est.

Cost

($mm)

Wholly-Owned

The Grove at Auburn100.0%Auburn University25,4690.1216600600$26.3
The Grove at Flagstaff100.0%Northern Arizona University17,7610.321658458433.1
The Grove at Nacogdoches - Phase II100.0%Stephen F. Austin State Univ.12,9030.4641606826.2
The Grove at Orono100.0%  University of Maine  11,168  0.5  188  620  620  25.3
Average/Median/Sub Total316,8250.46841,9642,486$90.9

Joint Venture4

The Grove at Fayetteville10.0%University of Arkansas23,1990.5232632632$26.5
The Grove at Laramie10.0%University of Wyoming10,5680.322461261224.8
The Grove at Stillwater510.0%  Oklahoma State University  22,411  0.8  206  612  612  20.7
Average/Median/Sub Total3  18,726  0.5  662  1,856  1,856  $72.0
Average/Median/Total3  17,640  0.4  1,346  3,820  4,342  $162.9
 
1 All data is from school websites as of fall 2011.

2 Represents existing beds at a property plus New & Phase II beds.

3 Total Enrollment is an average, Miles to Campus is the median, while others are totals.
4 The Company owns a 10.0% interest in the joint venture communities, with Harrison Street Real Estate owning the balance.
5 Acquisition of existing community with 138 units and 384 beds. New development adds 68 units and 228 beds.

The Company also plans to deliver six 2013/2014 academic year projects in the third quarter of 2013. It has commenced development on the six projects, which have total estimated projects costs of $162.7 million. The three wholly-owned projects have total estimated project costs of $82.8 million, while the three joint venture projects have total estimated project costs of $79.9 million. The Company will own 20.0% of the joint venture projects being developed with Harrison Street Real Estate ("HSRE"). Details of these developments are as follows:

2013/2014 Academic Year Developments

            
 
ProjectOwnership  University Served  

Total

Enrollment1

  

Miles to

Campus

   Read Full Story

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