ACC's Cottages of Columbia, University of Missouri, Columbia, Mo.
Courtesy ACC ACC's Cottages of Columbia, University of Missouri, Columbia, Mo.

The big will get bigger in the largest deal of 2012.

Already the largest owner, manager and developer of student housing, Austin-based American Campus Communities (ACC) announced last week it would purchase 19 student housing properties, good for more than 12,000 beds, from Kayne Anderson Capital Advisors LP. This is the second large portfolio deal this year for ACC, which closed its acquisition of a 15-asset portfolio for $627 million from Campus Acquisitions in September.

The $862.8 million deal includes the purchase of student housing properties near universities like Michigan State, Texas Tech, and the University of Southern California, among others. The deal is the largest apartment transaction of the year, excluding Lehman's Archstone deal.

ACC will pay $466.6 million, and assume about $396.2 million in outstanding debt. The firm will pay for the transaction through a combination of cash on hand, debt from its revolving credit line, a bridge loan and the sale of debt or stock. In fact, the company is selling 10 million shares of common stock to help fund the purchase.

The company will invest about $12.3 million in upgrades at the communities, which are spread across 13 states. The properties have an average age of 3.7 years and an average occupancy of 92.3 percent. "Approximately 75 percent of the selected portfolio is an average 0.3 miles from campus in submarkets with barriers to entry," said ACC CEO Bill Bayless. 

The acquisition will close in the fourth quarter of 2012.