American Campus Communities (ACC) generates revenues primarily from leasing housing to students. The company reported a total revenue of $733.9 million for fiscal 2014, up by a healthy 11.6% over 2013. The company’s total revenue grew by 28.7% and 41.2% in 2012 and 2013, respectively.
Rental revenue, which comprised 94.1% of ACC’s total revenue, grew by 11.7% to $690.6 million in 2014 over 2013. Revenue from on-campus properties, which comprised 3.9% of the total revenue, grew by 8.3% in 2014 to $28.5 million. Overall, American Campus Communities has reported a healthy revenue growth over the past five years with revenue growing from $326.1 million in 2010 to $733.9 million in 2014. In 9M2015, revenue increased by 2.6% to $551.2 million over 9M2014.
ACC’s same-store property portfolio is comprised of wholly-owned properties owned and operating for the entire periods being compared. Development and redevelopment properties are excluded from its same-store portfolio.
ACC’s same-store revenue, which comprised 82.9% of the total revenue in 2014, increased by 2.1% to $608.3 million over 2013. The increase in revenue from the same-store properties in 2014 was primarily due to an increase in average rental rates. In addition, an increase in average occupancy from 95% in 2013 to 95.4% in 2014 also boosted the company’s revenue.
Revenue per bed
ACC’s average monthly revenue per bed improved from $493 in 2010 to $603 in 2014. Average monthly revenue per bed is the base rental revenue earned during lease terms for the year divided by average occupied beds over the lease term.
When we compare ACC to its peer group, we see that American Campus Communities’ revenue growth was on the higher side. For example, AvalonBay Communities (AVB) posted its highest revenue growth at 15.2%, to $1.7 billion in 2014. Equity Residential (EQR) had 9.5% growth to $2.6 billion, and UDR (UDR) had 7.8% growth to $818 million. American Campus Communities makes up 0.79% of the holdings of the iShares US Real Estate ETF (IYR).
In the next article, we’ll delve into American Campus Communities’ cost structure.