American Campus Communities' Giant Development Pipeline
American Campus Communities is planning a strong development pipeline over the next three years, CIO William Talbot (a speaker at Bisnow’s Annual Student Housing Summit) tells us. Between now and 2018, ACC’s owned development pipeline includes 21 projects totaling an amazing 14,000 beds and $1.2B of investment, and that number could still grow. About half the communities are on campus equity developments, and the others are immediately adjacent (overall they average under 0.1 miles from campus, William says). ACC will fund much of its development by taking advantage of the hot investment market for student product and disposing of properties that don’t fit its long-term strategy. It’s projected to sell $405M during the first half of 2015 alone, and William tells us those assets average 15 years old and 1.2 miles from campus.
ACC’s pipeline is split evenly between expanding existing markets and entering new ones, William says. Its 2015 deliveries are a good example: the firm is completing its second asset at Drexel and its third at Florida State and is entering Auburn and the University of Oregon, two markets it’s been eyeing for years. William is particularly excited about ACC’s development at the University of Colorado at Boulder (rendered here). ACC first built there in ’01 and has been trying to do another since. It’s been working on this project for three years, and is finally in the dirt for a 2016 delivery. The 400-bed community nearly doubles new product in the area—Boulder has significant barriers to entry with only 600 beds built in the last 10 years. It was a tricky deal, William tells us—ACC purchased an operating hotel across the street from campus, arduously got it entitled with discretionary approvals, and has torn down the hotel and begun construction on the student housing property.
William says development volume across the country is decreasing recently because most firms are moving to the same strategy ACC has had for years—communities either on campus or immediately adjacent at Tier One universities with more than 15,000 students. Those core deals are harder to get done and can take a long time, which means fewer are happening across the industry. William’s also seeing a broad return to academic-focused amenities (like the study lounge pictured here from ACC's The Castilian at the University of Texas) in both on- and off-campus properties, something ACC CEO Bill Bayless playfully says gives him hope for the future.