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How American Campus Communities Revolutionized Student Housing

The COVID-19 pandemic has drastically changed the college experience, with remote instruction and other adjustments becoming the new norm. However, American Campus Communities, Inc. (NYSE: ACC), a student housing REIT, believes that these challenging times...

The COVID-19 pandemic has drastically changed the college experience, with remote instruction and other adjustments becoming the new norm. However, American Campus Communities, Inc. (NYSE: ACC), a student housing REIT, believes that these challenging times highlight the importance of their business model. By providing high-quality, modern, and healthy housing options, American Campus Communities helps students succeed in this ever-changing environment.

Despite the occupancy rate of their student housing portfolio decreasing to about 90% compared to last year's 97%, American Campus Communities CEO Bill Bayless remains optimistic. Average rents have even slightly increased, and Bayless attributes this trend to the flexibility of universities offering both online and in-person learning options. Students are continuously choosing to return to campus with their peers, realizing that remote learning alone cannot replicate the college experience. As Alexander Goldfarb, a managing director and senior research analyst with Piper Sandler, points out, students want to be together and form connections and bonds.

Since its establishment in 1993, American Campus Communities has played a significant role in revolutionizing the student housing model. Currently, the company provides housing at 68 universities, including renowned institutions such as Virginia Commonwealth University, the University of Colorado at Boulder, California State University, Drexel University, and Purdue University.

Improving Customer Treatment

The idea behind American Campus Communities was born when Bill Bayless, the company's founder, was a resident assistant at West Virginia University's Summit Hall in 1985. He questioned why students and parents were treated as temporary tenants rather than valued customers. This simple question led to the formation of American Campus Communities, which has since transformed the once fragmented sector into a respected development and operations powerhouse.

The company's approach focuses on enhancing the day-to-day lives of students. They offer private rooms with individual bathrooms, replacing the traditional bunk beds and communal showers. This improvement in living conditions has not only benefited students but also eased the financial and management burdens faced by colleges and universities. As a result, American Campus Communities has become the leading student housing player in the REIT sector, with a market cap of approximately $5 billion.

Setting New Standards

American Campus Communities has set new standards for student housing. Gone are the days of mom-and-pop operations and outdated facilities. Students now reside in modern accommodations on or near campus, equipped with strong internet connections, health-centered amenities, and kitchens. Additionally, engaged employees on-site assist students, ensuring their academic success.

Bill Bayless reflects on the changes, saying, "In the 1980s and continuing into the 1990s, you had a lot of absentee landlords and declining neighborhoods around college campuses. Students didn't have access to high-quality products that would enhance their pursuit of higher education." However, American Campus Communities has transformed this landscape, providing high-quality housing options that prioritize the needs of modern students. This has given parents and guardians peace of mind, while universities can cater to their students without depleting their resources.

Innovations and Campus Partnerships

American Campus Communities continues to innovate and forge partnerships with universities. They cater to college freshmen who often require extra support during their transition to university life. The company has also announced exciting concepts, such as housing for Disney College Program participants in Orlando and the Greek Leadership Village at Arizona State University. The Greek Leadership Village is a student-led project that will provide fraternity and sorority members with meeting spaces, council offices, retail space, and housing facilities.

According to Cydney Donnell, an American Campus Communities board member and associate head of the finance department at Texas A&M University's Mays Business School, the company's visionary leadership serves a unique market niche. Donnell attests to their unwavering support for colleges and universities and acknowledges the misconceptions surrounding student housing as an investment class.

A Resilient Response to the Pandemic

American Campus Communities' emphasis on providing students with more space has proven invaluable during the COVID-19 pandemic. The company's early focus on private rooms and individual leases has helped students adhere to social distancing measures. This resilience has ensured that American Campus Communities continues to thrive, even in these challenging times.

As the college experience evolves, American Campus Communities remains committed to its vision of offering exceptional student housing. By prioritizing the needs of students, the company has revolutionized the way students live and learn. With their unwavering dedication to quality and innovation, American Campus Communities continues to shape the future of student housing.