CCG Reports 1Q13 FFOA of $0.18/Dil. Share

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CCG Reports 1Q13 FFOA of $0.18/Dil. Share

- Same Store Average Quarterly Occupancy Up 170 Basis Points -

- Same Store Quarterly NOI Up 1.7% -


- Leasing of 65.5% at All Grove and Copper Beech Properties -

- Addition of 16,645 beds with Copper Beech Acquisition While Adding Second Brand and Becoming the 2nd Largest Student Housing Platform in the U.S. -

- Provides Update to 2013 Outlook -

CHARLOTTE, N.C.--(BUSINESS WIRE)-- Campus Crest Communities, Inc. (NYS: CCG) (the "Company"), a leading developer, builder, owner and manager of high-quality student housing properties, today announced results for the three months ended March, 31 2013.

Highlights

  • $0.18 Funds From Operations Adjusted ("FFOA") per diluted share for the first quarter
  • 28.3% increase in year-over-year quarterly student housing rental and services revenue
  • Solid gains in wholly-owned same store results through continued operational focus:
    • 1.7% increase in quarterly Net Operating Income ("NOI")
    • 170 basis point increase in average quarterly occupancy to 91.8%
  • 3.1% annual common stock dividend increase in January 2013 from $0.64 to $0.66 per share
  • Announced a staged transaction to acquire Copper Beech Townhome Communities, LLC and affiliates ("Copper Beech") with an initial 48% investment for $230.2 million plus a $31.7 million loan to existing investors
    • Successfully raised $312.7 million with a two-day marketed follow-on common stock offering to fund the transaction
      • Invested $153.1 million of the new proceeds prior to quarter end
  • 65.5% pre-leased at all properties for the 2013/2014 academic year as of April 28, 2013
    • 59.2% pre-leased across our Grove portfolio
    • 35-property Copper Beech portfolio was 76.5% pre-leased
  • Six new Grove properties and a 192-bed phase II of The Grove at Flagstaff on-schedule for opening in 2013/2014 academic year for a total cost of $184.7 million ($101.5 million for wholly-owned and $83.3 million for joint ventures)
  • Commencement of two new Grove joint venture properties - The Grove at Greensboro and The Grove at Louisville - for 2014/2015 academic year delivery with a total cost of $65.6 million
  • New urban market concept added in January 2013 with construction commencement of a 33-story, 850-bed student housing tower, called The Grove at Cira Centre South, for 2014/2015 academic year delivery
  • Acquired for $13.8 million a 629-bed student housing redevelopment property adjacent to the campus of the University of Toledo from bank foreclosure
  • Increased size of unsecured credit facility from $200 million to $300 million while lowering borrowing costs and setting the stage for further growth

Financial Results for the Three Months Ended March 31, 2013

For the three months ended March 31, 2013, Funds From Operations ("FFO") and FFOA are shown in the table below.

         
FFO/FFOA
Three Months Ended March 31,

 

Per share -

Per share -

($mm, except per share)  2013  

diluted

   2012  

diluted

FFO$8.1$0.17$4.6$0.15
Write-Off of Unamortized Deferred Financing Fees--1.00.03
Elimination of transactions costs0.40.00--
Elimination of FV adjustment of CB debt(0.1)  (0.00)-  -
FFOA$8.4  $0.18$5.6  $0.18
 

A reconciliation of net income attributable to common shareholders to FFO and FFOA can be found at the end of this release.

For the quarter ended March 31, 2013, the Company reported total revenues of $35.3 million and net income attributable to common stockholders of $1.0 million, compared to $32.9 million and $(1.6) million, respectively, in the same period in 2012.

"This quarter has been transformational for our business given the staged acquisition of Copper Beech, but just as exciting is our team's continued growth of our core business and the results we are seeing across our portfolio from the investments we are making in our people and systems," commented Ted W. Rollins, Co-Chairman and Chief Executive Officer of Campus Crest. "We can now deploy a multi-brand and product approach to each of our markets that we serve. In addition to this, we are excited about the opportunities to share best practices with Copper Beech as we integrate our businesses. Our pipeline of new properties remains strong, and we look forward to developing both The Grove and Copper Beech brands across the U.S. while strengthening operations and continuing to proactively manage our balance sheet."

Operating Results

For the three months ended March 31, 2013, results for wholly-owned same store properties were as follows:

Same Store Results 
Three Months Ended March 31,
($mm) 20132012Change
 
Number of Assets2727
Number of Beds13,88413,884
Occupancy91.8%90.1%170 bps
Total Revenues$19.0$18.62.2%
NOI$10.2$10.01.7%
NOI Margin53.6%53.9%-30 bps

The improvement in same-store NOI for three months was driven by higher occupancy and rental rate.

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 attributable to common stockholders 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 March 31, 2013, the Company owned interests in 84 properties totaling 44,002 beds across the U.S. Approximately 61% of the beds are branded The Grove, while 38% are branded Copper Beech. The remaining 1% of beds is a 629-bed redevelopment at the University of Toledo that will remain operational for the 2012/2013 academic year, and the Company expects to begin renovations during the 2013/2014 academic year.

The portfolio overview and 2012/2013 academic year occupancy status as of March 31, 2013 is outlined in the table below. In addition, the table includes 2013/2014 academic year pre-leasing.

Portfolio Overview           

# of

Pre-leasingOccupancy

Property

   

Properties

 Units Beds  04/29/13 04/29/12  03/31/13 03/31/12
 
Wholly-Owned - Operating275,15613,88459.6%61.3%91.3%89.5%
Wholly-Owned - Operating Acquisitions in 201224081,08859.7%64.0%91.1%98.2%
Wholly-Owned - 2012 Deliveries13 684 1,964  85.5% 78.4%  97.7% n/a
Sub Total Operating Wholly-Owned326,24816,93662.6%63.4%92.0%90.2%
 
Joint Venture - Operating47602,09250.4%44.8%82.1%80.5%
Joint Venture - 2012 Deliveries3 662 1,856  46.8% 51.9%  77.2% n/a
Sub Total Operating Joint Venture71,4223,94848.7%48.2%79.8%80.5%
 
Wholly-Owned - 2013 Deliveries237041,97258.5%n/an/an/a
Joint Venture - 2013 Deliveries3 664 1,784  50.7% n/a  n/a n/a
Sub Total 2013 Deliveries61,3683,75654.8%n/an/an/a
                   
Total Grove Leasing Portfolio   45 9,038 24,640  59.2% 60.5%  89.7% 89.0%
 
Toledo, OH Redevelopment138262921.2%n/a74.2%n/a
 
Copper Beech Operating Portfolio336,04116,12778.2%n/a98.0%n/a
Copper Beech Development Portfolio2 201 518  23.7% n/a  n/a n/a
Sub Total Copper Beech356,24216,64576.5%n/a98.0%n/a
                   
Total Leasing Portfolio   81 15,662 41,914  65.5% 60.5%  93.0% 89.0%
 
The Grove at Cira Centre South1344850n/an/an/an/a
The Grove at Greensboro1216584n/an/an/an/a
The Grove at Louisville1252654n/an/an/an/a
                   
Total Portfolio   84 16,474 44,002  65.5% 60.5%  93.0% 89.0%
 
1 Includes The Grove at Nacogdoches - Phase II.
2 Includes The Grove at Flagstaff - Phase II.
  • All 48 Grove properties were built, renovated or are being built by the Company or its predecessor. The median distance to campus of the portfolio is 0.5 miles with an average age of 3.0 years as of March 31, 2013.
  • The redevelopment property is located adjacent to the University of Toledo campus and was acquired by the Company in March 2013.
  • 30 of 35 Copper Beech properties were built, renovated or are being built by Copper Beech. The median distance to campus of the portfolio is 1.2 miles with an average age of 7.3 years as of March 31, 2013.

Development and Acquisition Activity

Wholly-Owned and Joint Venture Development

The Company continues to maintain an active pipeline of development opportunities. It currently is conducting due diligence in approximately 80 markets, with land identified and under letter of intent or contract in 30 of these markets for either a Grove or Copper Beech project. At an approximate cost of $25 million per project, this represents a total pipeline under control of approximately $750 million.

2013/2014 Academic Year Deliveries - The Grove

The Company is scheduled to deliver six 2013/2014 academic year Grove-branded projects and an expansion at The Grove at Flagstaff in the third quarter of 2013. Total estimated costs for these developments are approximately $184.7 million. All of the projects have been bought-out and are on schedule to be completed for a fall 2013 opening. This investment is split between wholly-owned and joint ventures with Harrison Street Real Estate Capital ("HSRE") as follows:

  • 3 wholly-owned projects and a Flagstaff phase II expansion with total estimated project costs of approximately $101.5 million
  • 3 joint venture projects with total estimated project costs of $83.3 million. The Company will own 20.0% of the joint venture projects being developed, with HSRE owning the balance

2014/2015 Academic Year Deliveries - The Grove

The Company's joint venture partnership with Brandywine Realty Trust and HSRE continues to make progress on the development of the 33-story, 850-bed student housing tower, The Grove at Cira Centre South, on a site leased from the University of Pennsylvania. Campus Crest and Brandywine each own 30.0% of the joint venture, while HSRE owns 40.0%. Construction commenced in January with a targeted completion date for fall 2014; leasing is expected to begin in fall 2013.

During the quarter ended March 31, 2013, the Company also commenced construction of two joint venture projects with HSRE at University of North Carolina at Greensboro and University of Louisville. The two projects are for delivery for the 2014/2015 academic year and have total estimated project costs of $65.6 million. The Company will own 30.0% of the two assets. Select highlights for these projects include:

  • The Grove at Greensboro: Located a short walk from the University of North Carolina at Greensboro campus and adjacent to the Greensboro Greenway trail system, this site provides convenient access to the University and the surrounding city amenities. The proposed Grove community will consist of 584 beds using the Company's 9th generation apartment building prototype.
  • The Grove at Louisville : Situated adjacent to a visible gateway entrance to campus, on a 7-acre infill parcel, this site creates convenient, pedestrian friendly access to the University of Louisville. The proposed project will be a modified Grove prototype with a contiguous 4-story building and parking garage, featuring 654 beds.

Details of the Company's Grove-branded developments are as follows:

2013/2014 Academic Year Deliveries      
 
Project  Primary University Served  

Total
Enrollment1

 

Miles to
Campus

 Units 

Total
Beds

 

Est. Cost
($mm)

Wholly-Owned

  On Campus
The Grove at Ft. CollinsColorado State University26,769218612$32.9
 
The Grove at MuncieBall State University17,8510.121658425.3
 
The Grove at PullmanWashington State University19,9890.021658430.4
 
The Grove at Flagstaff - Phase IINorthern Arizona University18,2920.25419212.8
               
Average/Median/Sub Total220,7250.07041,972$101.5
 

Joint Venture3

The Grove at IndianaIndiana University of Pennsylvania15,3790.6224600$27.6
 
The Grove at NormanUniversity of Oklahoma24,1440.6224600 Read Full Story

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