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American Campus Communities’ Strategy: Boost Shareholder Returns

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Long-term returns strategy

American Campus Communities’ (ACC) primary business objective is to create long-term stockholder value by deploying capital to develop, redevelop, acquire, and operate student housing communities. In addition, the company plans to sell communities when they no longer meet its long-term strategic goals and when market conditions are favorable. The company believes that it can achieve these objectives by continuing to implement its investment and operating strategies.

To achieve its long-term business objective, the company intends to pursue the following strategies:

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  • own high-quality and well-located student housing properties
  • acquire and develop properties in markets that have stable or increasing student populations
  • enter into submarkets with high barriers to entry and provide opportunities for economic growth as a result of the product position
  • acquire or develop properties with close proximity to campuses

Redeploying capital

The company intends to pursue the strategy of exiting markets where long-term growth prospects are limited. The proceeds from the sale are likely to be redeployed to primary markets that are expected to provide better investment returns over the long term.

Strategy enhances market position

American Campus Communities (ACC) believes that its operating and investment strategy has produced positive results in recent years. The company expects that its strategy will help it increase its profitability further while maintaining a strong balance sheet and liquidity levels in the years to come.

The strategy is also expected to help thwart competition from other major apartment players such as AvalonBay Communities (AVB), Equity Residential (EQR), and Essex Property Trust (ESS). American Campus Communities comprises 0.44% of the holdings of the SPDR Dow Jones Wilshire Global Real Estate ETF (RWO).

In the next article, we’ll look at American Campus Communities’ property acquisitions and development.

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