After its successful bid to develop 6,000-bed dormitories on the campus of the University of California, Riverside, American Campus Communities Inc. believes it is well-positioned to compete for additional on-campus housing projects in the University of California system, as well as the California State system.
The U.C. system has pending dormitory procurements and is looking to use public-private partnerships like the one at Riverside to finance them, James Wilhelm, executive vice president for public-private transactions, said during the company's fourth-quarter 2017 earnings call.
Wilhelm declined to give further details about American Campus' pursuit of additional projects in the California system.
Going into 2018, American Campus expects a 10% reduction in the supply of new beds in the 68 markets where the company owns student-housing properties. The 26,000 new beds to be delivered represent approximately 1.2% of enrollment across the portfolio, which is less than the 1.3% long-term average, President James Hopke said.
"Overall, the new deliveries are well spread, being located in 25 of our 68 markets," Hopke said.
American Campus will continue to monitor three markets where the company has a significant presence and that have seen significant new supply: Austin, Texas; Tallahassee, Fla.; and College Station, Texas, Hopke added.
These markets, along with Lubbock, Texas; Rochester, N.Y.; and Champaign, Ill., have experienced significant new supply in recent years and contributed to some student housing REITs experiencing softer-than-expected leasing and occupancy rates in the 2017-2018 school year.
For the 2018-2019 school year, American Campus expects rental growth at its same-store properties to be in the range of 2.9% to 4.4%. American Campus CEO William Bayless declined to give analysts any hard numbers on pre-leasing velocity for the 2018-2019 school year but said that at this point in the pre-leasing season, the company was running ahead in the markets that had an oversupply of beds in the 2017-2018 school year.