Campus Crest Communities Inc (fka CCG)

[MattoRuu]

Campus Crest Communities, Inc. Reports Second Quarter 2011 Results

CHARLOTTE, N.C., Aug 02, 2011 (BUSINESS WIRE) -- Campus Crest Communities, Inc. (NYSE:CCG) (the "Company"), a leading developer, builder, owner and manager of high-quality, purpose-built student housing, today announced results for the three months ended June 30, 2011.

Highlights

FFO of $0.17 per share
Same store net operating income (NOI) increased 12.1% for the second quarter 2011 versus the second quarter 2010
Improved same store wholly-owned operating margin by 6.4% year over year
Wholly-owned portfolio was 87.0% pre-leased for 2011/2012 academic year as of August 1, 2011, compared to 80.2% at August 1, 2010
Commenced construction on two wholly-owned projects at Auburn University and the University of Maine to deliver for the 2012/2013 academic year
Received commitments to expand and convert revolving credit facility from a secured to unsecured facility

Financial Results for the Three Months Ended June 30, 2011

For the three months ended June 30, 2011, Funds from Operations ("FFO") was $5.1 million, or $0.17 per share, compared to FFO loss of $(0.4) million for the Predecessor for the same period in 2010. For the three months ended June 30, 2011, Funds from Operations Adjusted ("FFOA") was $5.0 million, or $0.16 per share, compared to FFOA loss of $(1.9) million for the Predecessor for the same period in 2010. For the quarter ended June 30, 2011, the Company reported a net loss of $(0.6) million, compared to a $(5.1) million net loss for the predecessor entity (the "Predecessor") in the comparable period in 2010. A reconciliation of net loss to FFO and FFOA can be found at the end of this release.

"Campus Crest had a strong second quarter, delivering year over year margin improvement and pre-leasing gains as we continue to improve our operational programs," stated Ted Rollins, Co-Chairman and Chief Executive Officer of Campus Crest. "We have strong momentum for our pre-leasing for the 2011/2012 academic year and are tracking well ahead of where we were at this time last year. We also continue to improve our operations with such initiatives as online leasing which is being introduced during the third quarter. With our expanded, experienced management and leasing teams, a robust lineup of development opportunities and favorable demographic and economic conditions for privatized student housing, we look forward to driving shareholder value."

Operating Results

For the three months ended June 30, 2011, the same store wholly-owned portfolio, comprised of 20 properties containing 10,024 beds, had an average occupancy of 88.3% and an average Total Revenue Per Occupied Bed ("Total RevPOB") of $478. This compares to the prior year occupancy of 89.0% and Total RevPOB of $482 as the Company experienced decreased service revenue. For the three months ended June 30, 2011, Net Operating Income ("NOI") for same store wholly-owned properties increased 12.1% to $6.7 million in 2011 compared to $6.0 million in 2010. The change in NOI was driven by a 13.3% decrease in property operating expenses partially driven by cost savings from reduced marketing and lower repairs and maintenance expenditures. A reconciliation of net loss to NOI can be found at the end of this release. In addition, details regarding same store NOI and calculations thereof may be found in the supplemental earnings schedule.

As of June 30, 2011, the Company's wholly-owned 21 operating student housing properties totaled 3,920 units with 10,528 beds, in addition to 4 projects under construction for delivery for the 2011/2012 academic year comprised of 844 units and 2,316 beds. Through its joint venture with Harrison Street Real Estate Capital ("HSRE"), the Company manages and owns a 49.9% interest in six additional operating student housing properties which contain 1,128 units with 3,052 beds as well as a 20% interest in two properties currently under construction which contain 432 units and 1,168 beds for delivery for the 2011/2012 academic year. The Company owns, manages and operates a total of 6,324 units and 17,064 beds for all properties, including those under construction. All of the Company's properties were built by the Company and its Predecessor and are, on average, within six tenths of a mile from campus with an average age of 2.5 years as of June 30, 2011.

Leasing Update

As of August 1, 2011, the Company's existing wholly-owned portfolio was 87.0% leased for the 2011/2012 academic year compared to 80.2% leased for the same date prior year, and the Company's joint venture portfolio was 86.9% leased compared to 84.9% leased for the same date prior year. As of August 1, 2011, the overall operating portfolio was 87.0% leased versus 81.2% for the same date prior year. The Company's development properties, wholly-owned and joint venture, were 70.0% leased at August 1, 2011 for the 2011/2012 academic year.

Development Activity

The Company continued work on four new wholly-owned and two joint venture communities to be delivered for the 2011/2012 academic year. The wholly-owned properties have a total of 844 units with 2,316 beds with total expected project costs of approximately $87.5 million. The two projects owned in the joint venture with HSRE contain 432 units and 1,168 beds with total expected construction costs of approximately $46.1 million. Total gross fees to the Company for the joint venture projects are approximately $4.0 million, of which $3.3 million have been earned through June 30, 2011.

Subsequent to the end of the second quarter, the Company announced two development properties for delivery in the 2012/2013 academic year. The Company is developing wholly-owned properties at Auburn University in Auburn, Alabama and the University of Maine in Orono, Maine. The Auburn property will have 216 units with 600 beds and will be located 0.1 miles from the campus of Auburn University. The Orono property will have 188 units with 620 beds and will be located 0.5 miles from The University of Maine. The total cost of these projects is expected to be approximately $51.7 million.

Balance Sheet and Financing Activity

The Company had approximately $147.1 million of debt outstanding at June 30, 2011. Of the total debt outstanding, approximately $60.8 million was fixed rate debt with a weighted average effective interest rate of 6.04% and weighted average of 5.4 years to maturity. The Company's variable rate revolving credit facility had a balance of $74.5 million as of June 30, 2011, an interest rate of 2.95%, 2.3 years to maturity and an optional one year extension. The Company has no other maturities until the fourth quarter of 2016 outside of routine construction loan maturities. Additionally, as of June 30, 2011, the Company had construction loan balances totaling $11.7 million, which have partially funded four wholly-owned properties currently in development to be delivered for the 2011/2012 academic year.

The Company funds its joint venture projects with individual construction loans, and currently has $85.5 million of joint venture debt outstanding, of which the Company is a 49.9% owner, and $17.2 million of joint venture debt outstanding of which the Company is a 20% owner. The Company guarantees the joint venture debt.

In June and July 2011, the Company closed on $31.5 million of construction financing to partially fund the construction projects in Auburn, Alabama and Orono, Maine scheduled to deliver for the 2012/2013 academic year.

In addition, the Company received commitments from its current lender group to amend the variable rate revolving credit facility to change the facility from secured to unsecured, increase the committed facility to $150 million (in addition to an accordion feature that can increase the size of the facility by an additional $175 million), reduce the interest rate by 100 basis points, and extend the term by one year with the option for an additional one year extension. This amendment is expected to close in mid-August 2011.

Dividend

On June 15, 2011, the Company declared a second quarter dividend of $0.16 per common share and operating partnership unit, equating to $0.64 per common share and operating partnership unit on an annualized basis. The dividend was paid on July 13, 2011 to shareholders of record as of June 29, 2011.

2011 Outlook

Based upon management's current estimates, the Company is reiterating its guidance for full year 2011 FFO per fully diluted share of $0.72 to $0.78.

Conference Call Details

The Company will host a conference call on Wednesday, August 3, 2011, at 9:00 a.m. (Eastern time) to discuss the financial results.

The call can be accessed live over the phone by dialing [phone], or for international callers, [phone]. A replay will be available shortly after the call and can be accessed by dialing [phone], or for international callers, [phone]. The passcode for the replay is 375362. The replay will be available until August 10, 2011.

Interested parties may also listen to a simultaneous webcast of the conference call by logging onto the Company's website at http://investors.campuscrest.com. The on-line replay will be available for a limited time beginning immediately following the call.

Supplemental Schedules

The Company has published supplemental earnings schedules in order to provide additional disclosure and financial information for the benefit of the Company's stakeholders. These can be found under the "Earnings Center" tab in the Investor Relations section of the Company's web site at http://investors.campuscrest.com.

About Campus Crest Communities, Inc.

Campus Crest Communities, Inc. (NYSE: CCG) is a leading developer, builder, owner and manager of high-quality, purpose-built student housing properties located in targeted U.S. markets. The Company is a self-managed, self-administered and vertically-integrated real estate investment trust which operates all of its properties under The Grove(R) brand. Campus Crest Communities owns interests in 33 student housing properties containing approximately 6,324 apartment units and 17,064 beds. Since its inception, the Company has focused on customer service, privacy, on-site amenities and other lifestyle considerations to provide college students with a higher standard of living. Additional information can be found on the Company's website at http://www.campuscrest.com.