Maryland
|
|
76-0753089
|
(State
or Other Jurisdiction of
Incorporation
or Organization)
|
|
(IRS
Employer Identification No.)
|
805
Las Cimas Parkway, Suite 400
Austin,
TX
(Address
of Principal Executive Offices)
|
|
78746
(Zip
Code)
|
|
PAGE
NO. |
|
PART
I.
|
|
|
Item
1.
|
Consolidated
Financial Statements
|
|
Consolidated
Balance Sheets as of March 31, 2006 (unaudited) and December 31,
2005
|
1
|
|
|
|
|
|
Consolidated
Statements of Operations for the three
months ended March 31, 2006 and 2005 (all unaudited)
|
2
|
|
|
|
|
Consolidated
Statements of Comprehensive Income for the three
months ended March 31, 2006 and 2005 (all unaudited)
|
3
|
|
|
|
|
Consolidated
Statements of Cash Flows for the three months ended March 31, 2006
and
2005
(all unaudited)
|
4
|
|
|
|
|
Notes
to Consolidated Financial Statements
|
5
|
|
|
|
Item
2.
|
Management’s
Discussion and Analysis of
Financial Condition and Results of Operations
|
15
|
Item
3.
|
Quantitative
and Qualitative Disclosure
about Market Risk
|
28
|
Item
4.
|
Controls
and Procedures
|
29
|
|
||
PART
II.
|
||
|
|
|
Item
6.
|
Exhibits
|
30
|
|
||
SIGNATURES
|
31
|
|
|
March
31, 2006
|
December
31, 2005
|
||||||
(Unaudited)
|
|||||||
Assets
|
|||||||
Investments
in real estate:
|
|||||||
Owned
off-campus properties, net
|
$
|
676,890
|
$
|
417,098
|
|||
On-campus
participating properties, net
|
79,387
|
80,370
|
|||||
Investments
in real estate, net
|
756,277
|
497,468
|
|||||
Cash
and cash equivalents
|
11,025
|
24,641
|
|||||
Restricted
cash
|
12,609
|
9,502
|
|||||
Student
contracts receivable, net
|
1,904
|
2,610
|
|||||
Other
assets
|
20,101
|
16,641
|
|||||
Total
assets
|
$
|
801,916
|
$
|
550,862
|
|||
Liabilities
and stockholders’ equity
|
|||||||
Liabilities:
|
|||||||
Secured
debt
|
$
|
422,597
|
$
|
291,646
|
|||
Unsecured
revolving credit facility
|
67,000
|
-
|
|||||
Accounts
payable and accrued expenses
|
9,807
|
7,983
|
|||||
Other
liabilities
|
26,294
|
25,155
|
|||||
Total
liabilities
|
525,698
|
324,784
|
|||||
Minority
interests
|
35,011
|
2,851
|
|||||
Commitments
and contingencies (Note 11)
|
|||||||
Stockholders’
equity:
|
|||||||
Common
shares, $.01 par value, 800,000,000 shares authorized, 17,203,573
and
17,190,000 shares issued and outstanding at March 31, 2006 and December
31, 2005, respectively
|
172
|
172
|
|||||
Additional
paid in capital
|
253,432
|
233,388
|
|||||
Accumulated
earnings and distributions
|
(12,999
|
)
|
(10,817
|
)
|
|||
Accumulated
other comprehensive income
|
602
|
484
|
|||||
Total
stockholders’ equity
|
241,207
|
223,227
|
|||||
Total
liabilities and stockholders’ equity
|
$
|
801,916
|
$
|
550,862
|
Three
Months Ended March 31,
|
|||||||
2006
|
2005
|
||||||
Revenues:
|
|||||||
Owned
off-campus properties
|
$
|
19,487
|
$
|
12,489
|
|||
On-campus
participating properties
|
5,982
|
5,493
|
|||||
Third
party development services
|
1,602
|
609
|
|||||
Third
party development services - on-campus participating
properties
|
36
|
36
|
|||||
Third
party management services
|
662
|
710
|
|||||
Resident
services
|
320
|
204
|
|||||
Total
revenues
|
28,089
|
19,541
|
|||||
Operating
expenses:
|
|||||||
Owned
off-campus properties
|
8,149
|
5,136
|
|||||
On-campus
participating properties
|
1,950
|
1,875
|
|||||
Third
party development and management services
|
1,638
|
1,464
|
|||||
General
and administrative
|
1,587
|
1,364
|
|||||
Depreciation
and amortization
|
5,275
|
3,424
|
|||||
Ground/facility
lease
|
192
|
212
|
|||||
Total
operating expenses
|
18,791
|
13,475
|
|||||
Operating
income
|
9,298
|
6,066
|
|||||
Nonoperating
income and (expenses):
|
|||||||
Interest
income
|
185
|
58
|
|||||
Interest
expense
|
(5,336
|
)
|
(3,808
|
)
|
|||
Amortization
of deferred financing costs
|
(355
|
)
|
(246
|
)
|
|||
Other
nonoperating income
|
-
|
430
|
|||||
Total
nonoperating expenses
|
(5,506
|
)
|
(3,566
|
)
|
|||
Income
before income taxes, minority interests, and discontinued
operations
|
3,792
|
2,500
|
|||||
Income
tax provision
|
-
|
(102
|
)
|
||||
Minority
interests
|
(128
|
)
|
(87
|
)
|
|||
Income
from continuing operations
|
3,664
|
2,311
|
|||||
Discontinued
operations:
|
|||||||
Loss
attributable to discontinued operations
|
-
|
(2
|
)
|
||||
Gain
from disposition of real estate
|
-
|
5,883
|
|||||
Total
discontinued operations
|
-
|
5,881
|
|||||
Net
income
|
$
|
3,664
|
$
|
8,192
|
|||
Income
per share - basic:
|
|||||||
Income
from continuing operations per share
|
$
|
0.21
|
$
|
0.18
|
|||
Net
income per share
|
$
|
0.21
|
$
|
0.65
|
|||
Income
per share - diluted:
|
|||||||
Income
from continuing operations per share
|
$
|
0.21
|
$
|
0.19
|
|||
Net
income per share
|
$
|
0.21
|
$
|
0.65
|
|||
Weighted-average
common shares outstanding:
|
|||||||
Basic
|
17,209,779
|
12,622,145
|
|||||
Diluted
|
18,176,189
|
12,769,939
|
|||||
Distributions
declared per common share
|
$
|
0.3375
|
$
|
0.3375
|
Three
Months Ended March 31,
|
|||||||
2006
|
2005
|
||||||
Net
income
|
$
|
3,664
|
$
|
8,192
|
|||
Other
comprehensive income:
|
|||||||
Change
in fair value of interest rate swap
|
118
|
345
|
|||||
Net
comprehensive income
|
$
|
3,782
|
$
|
8,537
|
|||
Three
Months Ended March 31,
|
|||||||
2006
|
2005
|
||||||
Operating
activities
|
|||||||
Net
income
|
$
|
3,664
|
$
|
8,192
|
|||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
|||||||
Gain
from disposition of real estate
|
-
|
(5,883
|
)
|
||||
Minority
interests share of income
|
128
|
87
|
|||||
Depreciation
and amortization
|
5,275
|
3,424
|
|||||
Amortization
of deferred financing costs and debt premiums/discounts
|
106
|
127
|
|||||
Share-based
compensation
|
121
|
24
|
|||||
Income
tax provision
|
-
|
102
|
|||||
Changes
in operating assets and liabilities:
|
|||||||
Restricted
cash
|
(1,211
|
)
|
3,013
|
||||
Student
contracts receivable, net
|
706
|
(849
|
)
|
||||
Other
assets
|
(605
|
)
|
(1,474
|
)
|
|||
Accounts
payable and accrued expenses
|
367
|
(414
|
)
|
||||
Other
liabilities
|
(2,471
|
)
|
(636
|
)
|
|||
Net
cash provided by operating activities
|
6,080
|
5,713
|
|||||
Investing
activities
|
|||||||
Net
proceeds from disposition of real estate
|
-
|
28,023
|
|||||
Cash
paid for property acquisitions
|
(69,241
|
)
|
(72,763
|
)
|
|||
Investments
in owned off-campus properties
|
(14,684
|
)
|
(10,972
|
)
|
|||
Investments
in on-campus participating properties
|
(49
|
)
|
(3,055
|
)
|
|||
Purchase
of corporate furniture, fixtures and equipment
|
(139
|
)
|
(86
|
)
|
|||
Net
cash used in investing activities
|
(84,113
|
)
|
(58,853
|
)
|
|||
Financing
activities
|
|||||||
Proceeds
from revolving credit facility, net of paydowns
|
67,000
|
21,800
|
|||||
Proceeds
from construction loans
|
5,708
|
2,528
|
|||||
Proceeds
from bridge/mortgage loan
|
-
|
37,400
|
|||||
Principal
payments on debt
|
(1,098
|
)
|
(484
|
)
|
|||
Change
in construction accounts payable
|
(5
|
)
|
681
|
||||
Debt
issuance and assumption costs
|
(1,204
|
)
|
(913
|
)
|
|||
Distributions
to common and restricted stockholders
|
(5,841
|
)
|
(4,277
|
)
|
|||
Distributions
to Predecessor owners
|
-
|
(1,179
|
)
|
||||
Distributions
to minority partners
|
(143
|
)
|
(41
|
)
|
|||
Net
cash provided by financing activities
|
64,417
|
55,515
|
|||||
Net
change in cash and cash equivalents
|
(13,616
|
)
|
2,375
|
||||
Cash
and cash equivalents at beginning of period
|
24,641
|
4,050
|
|||||
Cash
and cash equivalents at end of period
|
$
|
11,025
|
$
|
6,425
|
|||
Supplemental
disclosure of non-cash investing and financing
activities
|
|||||||
Loans
assumed in connection with property acquisitions
|
$
|
(123,649
|
)
|
$
|
(47,169
|
)
|
|
Issuance
of Common Units in connection with property acquisitions
|
$
|
(49,096
|
)
|
$
|
-
|
||
Issuance
of Preferred Units in connection with property
acquisitions
|
$
|
(3,075
|
)
|
$
|
-
|
||
Change
in fair value of derivative instruments, net
|
$
|
118
|
$
|
345
|
|||
Supplemental
disclosure of cash flow information
|
|||||||
Interest
paid
|
$
|
6,251
|
$
|
4,496
|
Buildings
and improvements
|
7-40
years
|
|
Leasehold
interest - on-campus
participating
properties
|
25-34
years (shorter of useful life or respective lease term)
|
|
Furniture,
fixtures and equipment
|
3-7
years
|
Three
Months Ended March 31,
|
|||||||
|
|
|
2006
|
|
2005
|
||
Basic
net income per share calculation:
|
|||||||
Income
from continuing operations
|
$
|
3,664
|
$
|
2,311
|
|||
Discontinued
operations
|
-
|
5,881
|
|||||
Net
income
|
$
|
3,664
|
$
|
8,192
|
|||
Income
from continuing operations - per share
|
$
|
0.21
|
$
|
0.18
|
|||
Income
from discontinued operations - per share
|
$
|
-
|
$
|
0.47
|
|||
Net
income - per share
|
$
|
0.21
|
$
|
0.65
|
|||
Basic
weighted average common shares outstanding
|
17,209,779
|
12,622,145
|
|||||
Diluted
net income per share calculation:
|
|||||||
Income
from continuing operations
|
$
|
3,664
|
$
|
2,311
|
|||
Series
A Preferred Unit distributions
|
15
|
-
|
|||||
Income
allocated to Common Units
|
77
|
87
|
|||||
Income
from continuing operations, as adjusted
|
3,756
|
2,398
|
|||||
Discontinued
operations
|
-
|
5,881
|
|||||
Net
income, as adjusted
|
$
|
3,756
|
$
|
8,279
|
|||
Income
from continuing operations - per share
|
$
|
0.21
|
$
|
0.19
|
|||
Income
from discontinued operations - per share
|
$
|
-
|
$
|
0.46
|
|||
Net
income - per share
|
$
|
0.21
|
$
|
0.65
|
|||
Basic
weighted average common shares outstanding
|
17,209,779
|
12,622,145
|
|||||
Common
Units
|
838,607
|
121,000
|
|||||
Series
A Preferred Units
|
39,599
|
-
|
|||||
Restricted
stock awards
|
88,204
|
26,794
|
|||||
Diluted
weighted average common shares outstanding
|
18,176,189
|
12,769,939
|
Three
Months Ended March 31,
|
|||||||||
2006
|
2005
|
||||||||
Total
revenues
|
$
|
33,198
|
$
|
28,699
|
|||||
Net
income
|
$
|
3,642
|
$
|
6,572
|
|||||
Net
income per share - basic
|
$
|
0.21
|
$
|
0.38
|
|||||
Net
income per share - diluted
|
$
|
0.19
|
$
|
0.34
|
Three
Months Ended March 31,
|
|||||||
2006
|
2005
|
||||||
Total
revenues
|
$
|
-
|
$
|
29
|
|||
Total
operating expenses
|
-
|
(31
|
)
|
||||
Net
loss
|
$
|
-
|
$
|
(2
|
)
|
March
31, 2006
|
December
31, 2005
|
||||||
Land
|
$
|
80,859
|
$
|
52,018
|
|||
Buildings
and improvements
|
576,957
|
361,938
|
|||||
Furniture,
fixtures and equipment
|
22,667
|
18,115
|
|||||
Construction
in progress
|
34,032
|
18,962
|
|||||
|
714,515
|
451,033
|
|||||
Less
accumulated depreciation
|
(37,625
|
)
|
(33,935
|
) | |||
Owned
off-campus properties, net
|
$
|
676,890
|
$
|
417,098
|
Historical
Cost
|
|||||||||||||
Lessor/University
|
Lease
Commencement
|
Required
Debt Repayment (1)
|
March
31, 2006
|
December
31, 2005
|
|||||||||
Texas
A&M University System /
Prairie
View A&M University (2)
|
2/1/96
|
9/1/23
|
$
|
38,073
|
$
|
38,037
|
|||||||
Texas
A&M University System /
Texas
A&M International
|
2/1/96
|
9/1/23
|
5,925
|
5,920
|
|||||||||
Texas
A&M University System /
Prairie
View A&M University (3)
|
10/1/99
|
8/31/25
/ 8/31/28
|
23,785
|
23,777
|
|||||||||
University
of Houston System /
University
of Houston (4)
|
9/27/00
|
8/31/35
|
34,603
|
34,603
|
|||||||||
|
|
102,386
|
102,337
|
||||||||||
Less
accumulated amortization
|
(22,999
|
)
|
(21,967
|
)
|
|||||||||
On-campus
participating properties, net
|
$
|
79,387
|
$
|
80,370
|
(1) |
Represents
the effective lease termination date. The Leases terminate upon the
earlier to occur of the final repayment of the related debt or the
end of
the contractual lease term.
|
(2) |
Consists
of three phases placed in service between 1996 and
1998.
|
(3) |
Consists
of two phases placed in service in 2000 and
2003.
|
(4) |
Consists
of two phases placed in service in 2001 and 2005.
|
March
31, 2006
|
December
31, 2005
|
||||||
Debt
secured by owned off-campus properties:
|
|||||||
Mortgage
loans payable
|
$
|
318,492
|
$
|
195,871
|
|||
Construction
loan payable
|
5,688
|
-
|
|||||
324,180
|
195,871
|
||||||
Debt
secured by on-campus participating properties:
|
|||||||
Mortgage
loans payable
|
16,716
|
16,786
|
|||||
Construction
loan payable
|
16,431
|
16,411
|
|||||
Bonds
payable
|
58,215
|
58,215
|
|||||
91,362
|
91,412
|
||||||
Revolving
credit facility
|
67,000
|
-
|
|||||
Unamortized
debt premiums, net of discounts
|
7,055
|
4,363
|
|||||
Total
debt
|
$
|
489,597
|
$
|
291,646
|
Common
Units
|
Restricted
Stock Units (RSUs)
|
Restricted
Stock Awards (RSAs)
|
Outperformance
Bonus Plan
|
Total
|
||||||||||||
Outstanding at December 31, 2005 |
121,000
|
14,375
|
45,868
|
367,682
|
548,925
|
|||||||||||
Granted
(1)
|
-
|
-
|
69,966
|
-
|
69,966
|
|||||||||||
Vested
|
-
|
-
|
(12,194)
|
-
|
(12,194
|
)
|
||||||||||
Forfeited
|
-
|
-
|
(303
|
)
|
-
|
(303
|
)
|
|||||||||
Converted
to common shares
|
(4,000
|
)
|
-
|
-
|
-
|
(4,000
|
)
|
|||||||||
Outstanding
at March 31, 2006
|
117,000
|
14,375
|
103,337
|
367,682
|
602,394
|
|||||||||||
Vested
at March 31, 2006
|
117,000
|
14,375
|
12,194
|
-
|
143,569
|
(1) |
On
January 31, 2006, the Company granted 69,966 RSAs to its executive
officers and certain employees that vest in equal annual installments
over
five years. Unvested awards are forfeited upon the termination of
an
individual’s employment with the Company. Recipients of RSAs receive
dividends, as declared by the Company’s Board of Directors, on unvested
shares provided that the respective recipient continues to be an
employee
of the Company.
|
Three
Months Ended March 31,
|
|||||||
2006
|
2005
|
||||||
Owned
Off-Campus Properties
|
|||||||
Rental
revenues
|
$
|
19,807
|
$
|
12,692
|
|||
Interest
and other income
|
16
|
34
|
|||||
Total
revenues from external customers
|
19,823
|
12,726
|
|||||
Operating
expenses before depreciation and amortization
|
8,014
|
5,065
|
|||||
Interest
expense
|
3,775
|
2,456
|
|||||
Insurance
gain
|
-
|
430
|
|||||
Operating
income before depreciation, amortization, minority
interests
and allocation of corporate overhead
|
$
|
8,034
|
$
|
5,635
|
|||
Depreciation
and amortization
|
$
|
4,123
|
$
|
2,455
|
|||
Capital
expenditures
|
$
|
14,684
|
$
|
10,792
|
|||
Total
segment assets at March 31,
|
$
|
699,168
|
$
|
396,663
|
|||
On-Campus
Participating Properties
|
|||||||
Rental
revenues
|
$
|
5,982
|
$
|
5,493
|
|||
Interest
and other income
|
64
|
25
|
|||||
Total
revenues from external customers
|
6,046
|
5,518
|
|||||
Operating
expenses before depreciation, amortization,
ground/facility
lease, and allocation of corporate overhead
|
1,778
|
1,669
|
|||||
Ground/facility
lease
|
192
|
212
|
|||||
Interest
expense
|
1,587
|
1,347
|
|||||
Operating
income before depreciation, amortization, minority
interests
and allocation of corporate overhead
|
$
|
2,489
|
$
|
2,290
|
|||
Depreciation
and amortization
|
$
|
1,033
|
$
|
880
|
|||
Capital
expenditures
|
$
|
49
|
$
|
3,055
|
|||
Total
segment assets at March 31,
|
$
|
92,528
|
$
|
83,423
|
|||
Development
Services
|
|||||||
Development
and construction management fees from
external
customers
|
$
|
1,638
|
$
|
645
|
|||
Intersegment
revenues
|
-
|
92
|
|||||
Total
revenues
|
1,638
|
737
|
|||||
Operating
expenses
|
1,310
|
912
|
|||||
Operating
income (loss) before depreciation, amortization,
minority
interests and allocation of corporate overhead
|
$
|
328
|
$
|
(175
|
)
|
||
Total
segment assets at March 31,
|
$
|
4,431
|
$
|
1,406
|
|||
Property
Management Services
|
|||||||
Property
management fees from external customers
|
$
|
662
|
$
|
710
|
|||
Intersegment
revenues
|
835
|
657
|
|||||
Total
revenues
|
1,497
|
1,367
|
|||||
Operating
expenses
|
640
|
418
|
|||||
Operating
income before depreciation, amortization, minority
interests
and allocation of corporate overhead
|
$
|
857
|
$
|
949
|
|||
Total
segment assets at March 31,
|
$
|
1,253
|
$
|
2,051
|
|||
Reconciliations
|
|||||||
Total
segment revenues
|
$
|
29,004
|
$
|
20,348
|
|||
Unallocated
interest income earned on corporate cash
|
105
|
-
|
|||||
Elimination
of intersegment revenues
|
(835
|
)
|
(749
|
)
|
|||
Total
consolidated revenues, including interest income
|
$
|
28,274
|
$
|
19,599
|
|||
Segment
operating income before depreciation, amortization,
minority
interests and allocation of corporate overhead
|
$
|
11,708
|
$
|
8,699
|
|||
Depreciation
and amortization
|
5,630
|
3,670
|
|||||
Net
unallocated expenses relating to corporate overhead
|
2,286
|
2,529
|
|||||
Income
tax provision
|
-
|
(102
|
) | ||||
Minority
interests
|
(128
|
)
|
(87
|
)
|
|||
Income
from continuing operations
|
$
|
3,664
|
$
|
2,311
|
|||
Total
segment assets
|
$
|
797,380
|
$
|
483,543
|
|||
Unallocated
corporate assets
|
4,536
|
2,944
|
|||||
Total
assets
|
$
|
801,916
|
$
|
486,487
|
PROPERTY
|
YEAR
ACQUIRED / DEVELOPED (1) |
LOCATION
|
PRIMARY
UNIVERSITY SERVED
|
UNITS
|
BEDS
|
|||||
Owned
off campus properties:
|
||||||||||
1.
Commons On Apache
|
1999
|
Tempe,
AZ
|
Arizona
State University Main Campus
|
111
|
444
|
|||||
2.
The Village at Blacksburg
|
2000
|
Blacksburg,
VA
|
Virginia
Polytechnic Institute and
State
University
|
288
|
1,056
|
|||||
3.
The Village on University
|
1999
|
Tempe,
AZ
|
Arizona
State University Main Campus
|
288
|
918
|
|||||
4.
River Club Apartments
|
1999
|
Athens,
GA
|
The
University of Georgia-Athens
|
266
|
794
|
|||||
5.
River Walk Townhomes
|
1999
|
Athens,
GA
|
The
University of Georgia-Athens
|
100
|
340
|
|||||
6.
The Callaway House
|
2001
|
College
Station, TX
|
Texas
A&M University
|
173
|
538
|
|||||
7.
The Village at Alafaya Club
|
2000
|
Orlando,
FL
|
The
University of Central Florida
|
228
|
840
|
|||||
8.
The Village at Science Drive
|
2001
|
Orlando,
FL
|
The
University of Central Florida
|
192
|
732
|
|||||
9.
University Village at Boulder Creek
|
2002
|
Boulder,
CO
|
The
University of Colorado at Boulder
|
82
|
309
|
|||||
10.
University Village at Fresno
|
2004
|
Fresno,
CA
|
California
State University, Fresno
|
105
|
406
|
|||||
11.
University Village at TU
|
2004
|
Philadelphia,
PA
|
Temple
University
|
220
|
749
|
|||||
12.
University Club Tallahassee
|
2005
|
Tallahassee,
FL
|
Florida
State University
|
152
|
608
|
|||||
13.
The Grove at University Club
|
2005
|
Tallahassee,
FL
|
Florida
State University
|
64
|
128
|
|||||
14.
College Club Tallahassee
|
2005
|
Tallahassee,
FL
|
Florida
A&M University
|
96
|
384
|
|||||
15.
The Greens at College Club
|
2005
|
Tallahassee,
FL
|
Florida
A&M University
|
40
|
160
|
|||||
16.
University Club Gainesville
|
2005
|
Gainesville,
FL
|
University
of Florida
|
94
|
376
|
|||||
17.
City Parc at Fry Street
|
2005
|
Denton,
TX
|
University
of North Texas
|
136
|
418
|
|||||
18.
The Estates
|
2005
|
Gainesville,
FL
|
University
of Florida
|
396
|
1,044
|
|||||
19.
University Village at Sweet Home (2)
|
2005
|
Amherst,
NY
|
State
University of New York - Buffalo
|
269
|
828
|
|||||
20.
Entrada Real
|
2006
|
Tucson,
AZ
|
University
of Arizona
|
98
|
363
|
|||||
21.
Royal Oaks
|
2006
|
Tallahassee,
FL
|
Florida
State University
|
82
|
224
|
|||||
22.
Royal Pavilion
|
2006
|
Tallahassee,
FL
|
Florida
State University
|
60
|
204
|
|||||
23.
Royal Village Tallahassee
|
2006
|
Tallahassee,
FL
|
Florida
State University
|
75
|
288
|
|||||
24.
Royal Village Gainesville
|
2006
|
Gainesville,
FL
|
University
of Florida
|
118
|
448
|
|||||
25.
Northgate Lakes
|
2006
|
Orlando,
FL
|
The
University of Central Florida
|
194
|
710
|
|||||
26.
Royal Lexington
|
2006
|
Lexington,
KY
|
University
of Kentucky
|
94
|
364
|
|||||
27.
The Woods at Greenland
|
2006
|
Murfreesboro,
TN
|
Middle
Tennessee State University
|
78
|
276
|
|||||
28.
Raiders Crossing
|
2006
|
Murfreesboro,
TN
|
Middle
Tennessee State University
|
96
|
276
|
|||||
29.
Raiders Pass
|
2006
|
Lubbock,
TX
|
Texas
Tech University
|
264
|
828
|
|||||
30.
Aggie Station
|
2006
|
College
Station, TX
|
Texas
A&M University
|
156
|
450
|
|||||
31.
The Outpost San Marcos
|
2006
|
San
Marcos, TX
|
Texas
State University - San Marcos
|
162
|
486
|
|||||
32.
The Outpost San Antonio
|
2006
|
San
Antonio, TX
|
University
of Texas - San Antonio
|
276
|
828
|
|||||
33.
Callaway Villas (3)
|
2006
|
College
Station, TX
|
Texas
A&M University
|
236
|
704
|
|||||
34.
Village at Newark (4)
|
2007
|
Newark,
NJ
|
Rutgers
University, NJIT, Essex CCC
|
221
|
812
|
|||||
Total
owned off-campus properties
|
5,510
|
18,333
|
PROPERTY
|
YEAR
ACQUIRED / DEVELOPED (1) |
LOCATION
|
PRIMARY
UNIVERSITY SERVED
|
UNITS
|
BEDS
|
|||||
On-campus
participating properties:
|
||||||||||
35.
University Village—PVAMU
|
1996
/ 97 / 98
|
Prairie
View, TX
|
Prairie
View A&M University
|
612
|
1,920
|
|||||
36.
University College—PVAMU
|
2000
/ 2003
|
Prairie
View, TX
|
Prairie
View A&M University
|
756
|
1,470
|
|||||
37.
University Village—TAMIU
|
1997
|
Laredo,
TX
|
Texas
A&M International University
|
84
|
252
|
|||||
38.
Cullen Oaks - Phase I and II
|
2001
/ 2005
|
Houston,
TX
|
The
University of Houston
|
411
|
879
|
|||||
Total
on-campus participating properties
|
1,863
|
4,521
|
||||||||
Total
- all properties
|
7,373
|
22,854
|
(1) |
As
of March 31, 2006, the average age of our operating properties was
approximately 5.8 years.
|
(2) |
Construction
was completed and property commenced operations in August
2005.
|
(3) |
Currently
under development - scheduled to open for occupancy in August
2006.
|
(4) |
Currently
under development - scheduled to complete construction in Summer
2007 and
open for occupancy in Fall 2007. Pending approval from the City of
Newark's Central Planning Board, the project's capacity can be increased
to 838 beds without modifying the existing building
area.
|
Three
Months Ended March 31,
|
|||||||||||||
2006
|
2005
|
Change
($)
|
Change
(%)
|
||||||||||
Revenues:
|
|||||||||||||
Owned
off-campus properties
|
$
|
19,487
|
$
|
12,489
|
$
|
6,998
|
56.0
|
%
|
|||||
On-campus
participating properties
|
5,982
|
5,493
|
489
|
8.9
|
%
|
||||||||
Third
party development services
|
1,638
|
645
|
993
|
154.0
|
%
|
||||||||
Third
party management services
|
662
|
710
|
(48
|
)
|
(6.8
|
%)
|
|||||||
Resident
services
|
320
|
204
|
116
|
56.9
|
%
|
||||||||
Total
revenues
|
28,089
|
19,541
|
8,548
|
43.7
|
%
|
||||||||
Operating
Expenses:
|
|||||||||||||
Owned
off-campus properties
|
8,149
|
5,136
|
3,013
|
58.7
|
%
|
||||||||
On-campus
participating properties
|
1,950
|
1,875
|
75
|
4.0
|
%
|
||||||||
Third
party development and management services
|
1,638
|
1,464
|
174
|
11.9
|
%
|
||||||||
General
and administrative
|
1,587
|
1,364
|
223
|
16.3
|
%
|
||||||||
Depreciation
and amortization
|
5,275
|
3,424
|
1,851
|
54.1
|
%
|
||||||||
Ground/facility
leases
|
192
|
212
|
(20
|
)
|
(9.4
|
%)
|
|||||||
Total
operating expenses
|
18,791
|
13,475
|
5,316
|
39.5
|
%
|
||||||||
Operating
income
|
9,298
|
6,066
|
3,232
|
53.3
|
%
|
||||||||
Nonoperating
income and (expenses):
|
|||||||||||||
Interest
income
|
185
|
58
|
127
|
219.0
|
%
|
||||||||
Interest
expense
|
(5,336
|
)
|
(3,808
|
)
|
(1,528
|
)
|
40.1
|
%
|
|||||
Amortization
of deferred financing costs
|
(355
|
)
|
(246
|
)
|
(109
|
)
|
44.3
|
%
|
|||||
Other
nonoperating income
|
-
|
430
|
(430
|
)
|
(100.0
|
%)
|
|||||||
Total
nonoperating expenses
|
(5,506
|
)
|
(3,566
|
)
|
(1,940
|
)
|
54.4
|
%
|
|||||
Income
before income tax provision, minority interests, and discontinued
operations
|
3,792
|
2,500
|
1,292
|
51.7
|
%
|
||||||||
Income
tax provision
|
-
|
(102
|
)
|
102
|
(100.0
|
%)
|
|||||||
Minority
interests
|
(128
|
)
|
(87
|
)
|
(41
|
)
|
47.1
|
%
|
|||||
Income
from continuing operations
|
3,664
|
2,311
|
1,353
|
58.5
|
%
|
||||||||
Discontinued
operations:
|
|||||||||||||
Loss
attributable to discontinued operations
|
-
|
(2
|
)
|
2
|
(100.0
|
%)
|
|||||||
Gain
from disposition of real estate
|
-
|
5,883
|
(5,883
|
)
|
(100.0
|
%)
|
|||||||
Total
discontinued operations
|
-
|
5,881
|
(5,881
|
)
|
(100.0
|
%)
|
|||||||
Net
income
|
$
|
3,664
|
$
|
8,192
|
$
|
(4,528
|
)
|
(55.3
|
%)
|
Three
Months Ended March 31,
|
|||||||
2006
|
2005
|
||||||
Property
acquisitions
|
$
|
(69,241
|
)
|
$
|
(72,763
|
)
|
|
Property
dispositions
|
-
|
28,023
|
|||||
Capital
expenditures for on-campus participating properties
|
(49
|
)
|
(28
|
)
|
|||
Capital
expenditures for owned off-campus properties
|
(545
|
)
|
(852
|
)
|
|||
Investments
in on-campus participating properties under development
|
-
|
(3,027
|
)
|
||||
Investment
in owned off-campus properties under development
|
(14,139
|
)
|
(10,120
|
)
|
|||
Purchase
of corporate furniture, fixtures, and equipment
|
(139
|
)
|
(86
|
)
|
|||
Total
|
$
|
(84,113
|
)
|
$
|
(58,853
|
)
|
Three
Months Ended March 31,
|
||||||
2006
|
2005
|
|||||
Revenues
|
$
|
5,982
|
$
|
5,493
|
||
Direct
operating expenses (1)
|
(1,801
|
)
|
(1,724
|
)
|
||
Amortization
|
(1,032
|
)
|
(879
|
)
|
||
Amortization
of deferred financing costs
|
(78
|
)
|
(46
|
)
|
||
Ground/facility
leases (2)
|
(192
|
)
|
(212
|
)
|
||
Net
operating income
|
2,879
|
2,632
|
||||
Interest
income
|
63
|
25
|
||||
Interest
expense
(3) (4)
|
(1,587
|
)
|
(1,347
|
)
|
||
Net
income
|
$
|
1,355
|
$
|
1,310
|
(1) |
Excludes
property management fees of $0.3 million for both the three month
periods
ended March 31, 2006 and 2005. This expense and the corresponding
fee
revenue recognized by us have been eliminated in consolidation. Also
excludes allocation of expenses related to corporate management and
oversight.
|
(2) |
Represents
the universities’ 50% share of the properties’ net cash available for
distribution after payment of operating expenses, debt service (including
payment of principal) and capital
expenditures.
|
(3) |
Interest
expense is net of approximately $23,000 of capitalized interest for
the
three months ended March 31, 2005, related to Cullen Oaks Phase II,
a
recently completed project that was an additional phase of the Cullen
Oaks
on-campus participating property.
|
(4) |
Debt
service expenditures for these properties totaled $2.8 million and
$2.6
million for the three months ended March 31, 2006 and 2005, respectively.
|
Asset
|
Original
Date
|
Interest
Rate
|
Maturity
Date
|
Balance
as of
March
31, 2006
|
||||
University
Village at Boulder Creek
|
12/01/2002
|
5.71%
|
Nov
2012
|
$
16,242
|
||||
River
Club Apartments
|
07/28/2000
|
8.18%
|
Aug
2010
|
18,288
|
||||
River
Walk Townhomes
|
08/31/1999
|
8.00%
|
Sep
2009
|
7,569
|
||||
Village
at Alafaya Club
|
07/11/2000
|
8.16%
|
Aug
2010
|
(1)
|
20,204
|
|||
Village
at Blacksburg
|
12/15/2000
|
7.50%
|
Jan
2011
|
21,038
|
||||
Commons
on Apache
|
05/14/1999
|
7.66%
|
Jun
2009
|
7,536
|
||||
Callaway
House
|
03/30/2001
|
7.10%
|
Apr
2011
|
19,417
|
||||
University
Club Tallahassee
|
11/01/2002
|
7.99%
|
Oct
2010
|
13,415
|
||||
The
Grove at University Club
|
04/01/2003
|
5.75%
|
Mar
2013
|
4,328
|
||||
College
Club Tallahassee
|
01/01/2003
|
6.74%
|
Dec
2011
|
8,781
|
||||
University
Club Gainesville
|
11/01/1999
|
7.88%
|
Nov
2009
|
8,402
|
||||
City
Parc at Fry Street
|
10/05/2004
|
5.96%
|
Sep
2014
|
11,614
|
||||
The
Estates
|
03/29/2005
|
5.13%
|
Jun
2015
|
38,365
|
||||
Northgate
Lakes
|
07/01/1999
|
7.00%
|
Jul
2009
|
11,302
|
||||
Royal
Oaks
|
07/01/1999
|
7.13%
|
Jul
2009
|
3,026
|
||||
Royal
Pavilion
|
07/01/1999
|
6.92%
|
Jul
2009
|
2,530
|
||||
Royal
Village Tallahassee
|
07/01/1999
|
6.83%
|
Jul
2009
|
3,403
|
||||
Royal
Village Gainesville
|
07/01/1999
|
6.87%
|
Jul
2009
|
6,197
|
||||
Royal
Lexington
|
07/01/1999
|
6.86%
|
Jul
2009
|
4,856
|
||||
The
Woods at Greenland
|
10/01/2002
|
5.69%
|
Oct
2012
|
6,209
|
||||
Raider’s
Crossing
|
12/01/2002
|
6.18%
|
Dec
2012
|
6,628
|
||||
Entrada
Real
|
11/01/2002
|
5.61%
|
Nov
2012
|
9,765
|
||||
The
Outpost - San Marcos
|
10/01/2003
|
5.74%
|
Oct
2013
|
13,742
|
||||
The
Outpost - San Antonio
|
10/01/2005
|
4.99%
|
Oct
2014
|
24,328
|
||||
Raider’s
Pass - Phase I
|
10/01/2002
|
5.91%
|
Oct
2012
|
15,793
|
||||
Raider’s
Pass - Phase II
|
10/01/2003
|
5.66%
|
Oct
2012
|
3,876
|
||||
Aggie
Station
|
10/01/2003
|
5.96%
|
Oct
2012
|
11,639
|
||||
Callaway
Villas (2)
|
07/08/2005
|
6.69%
|
Jul
2008
|
5,687
|
||||
Total
|
$
324,180
|
(1) |
Represents
the Anticipated Repayment Date, as defined in the loan agreement.
If the
loan is not repaid on the Anticipated Repayment Date, then certain
monthly
payments including excess cash flow, as defined, become due through
the
maturity date of August 2030.
|
(2) |
We
began making draws under this construction loan in January 2006.
For each
borrowing, we have the option of choosing Prime rate or one-, two-,
three-, or six-month LIBOR plus 1.35%. The loan requires payments
of
interest only during the term of the loan and any accrued interest
or
outstanding borrowings become due on the maturity
date.
|
Asset
|
Original
Date
|
Original
Term
|
Maturity
Date
|
Balance
as of
March
31, 2006
|
|||||||||
University
Village-PVAMU (1)
|
Sep
1999
|
24
years
|
Sep
2023
|
$
|
30,070
|
||||||||
University
College-PVAMU (Phase I) (2)
|
May
2001
|
22
years
|
Aug
2025
|
19,410
|
|||||||||
University
College-PVAMU (Phase II) (2)
|
Jul
2003
|
25
years
|
Aug
2028
|
4,135
|
|||||||||
University
Village-TAMIU (1)
|
Sep
1999
|
24
years
|
Sep
2023
|
4,600
|
|||||||||
Total
|
$
|
58,215
|
(1)
|
Part
of combined bond issuance. Separate loan agreements are not
cross-collateralized or cross-defaulted
|
(2)
|
Multiple
financings of single facility.
|
Three
Months Ended March 31,
|
|||||||
2006
|
2005
|
||||||
Net
income
|
$
|
3,664
|
$
|
8,192
|
|||
Minority
interests
|
128
|
87
|
|||||
Gain
from disposition of real estate
|
-
|
(5,883
|
)
|
||||
Real
estate related depreciation and amortization:
|
|||||||
Total
depreciation and amortization
|
5,275
|
3,424
|
|||||
Furniture,
fixtures, and equipment depreciation
|
(120
|
)
|
(98
|
)
|
|||
Funds
from operations
|
$
|
8,947
|
$
|
5,722
|
|||
FFO
per share - diluted
|
$
|
0.49
|
$
|
0.45
|
|||
Weighted
average common shares outstanding - diluted
|
18,176,189
|
12,769,939
|
Three
Months Ended March 31,
|
|||||||
2006
|
2005
|
||||||
Funds
from operations
|
$
|
8,947
|
$
|
5,722
|
|||
Elimination
of operations of on-campus participating properties:
|
|||||||
Net
income from on-campus participating properties
|
(1,355
|
)
|
(1,310
|
)
|
|||
Amortization
of investment in on-campus participating properties
|
(1,032
|
)
|
(879
|
)
|
|||
6,560
|
3,533
|
||||||
Modifications
to reflect operational performance of on-campus
participating
properties:
|
|||||||
Our
share of net cash flow (1)
|
192
|
212
|
|||||
Management
fees
|
278
|
263
|
|||||
On-campus
participating properties development fees (2)
|
-
|
230
|
|||||
Impact
of on-campus participating properties
|
470
|
705
|
|||||
Funds
from operations - modified for operational performance of
on-campus
participating properties (“FFOM”)
|
$
|
7,030
|
$
|
4,238
|
|||
FFOM
per share - diluted
|
$
|
0.39
|
$
|
0.33
|
|||
Weighted
average common shares outstanding - diluted
|
18,176,189
|
12,769,939
|
(1)
|
50%
of the properties’ net cash available for distribution after payment of
operating expenses, debt service (including repayment of principal)
and
capital expenditures. Represents amounts accrued for the interim
periods.
|
(2)
|
Development
and construction management fees, including construction savings
earned
under the general construction contract, related to the Cullen Oaks
Phase
II on-campus participating property, which was completed in August
2005.
|
Exhibit
Number
|
Description of Document |
|
31.1
|
Certification
of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
|
|
31.2
|
Certification
of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
|
|
32.1
|
Certification
of Chief Executive Officer Pursuant to 18 U. S. C. Section 1350,
as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
|
32.2
|
Certification
of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350,
as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
Dated:
|
May
10, 2006
|
|
AMERICAN
CAMPUS COMMUNITIES, INC.
|
|
|
|
|
|
|
|
|
By:
|
/s/
William C. Bayless, Jr.
|
|
|
|
|
|
William
C. Bayless, Jr.
President
and Chief Executive Officer
|
|
|
|
|
|
|
|
By:
|
/s/
Brian B. Nickel
|
|
|
|
|
|
Brian
B. Nickel
Executive
Vice President, Chief Financial Officer and Secretary
|
|
|
|
|
|
|
|
By:
|
/s/
Jonathan A. Graf
|
|
|
|
|
|
Jonathan
A. Graf
Senior
Vice President,
Chief
Accounting Officer and Treasurer
|