(By Balaseshan) Campus Crest Communities Inc. (NYSE:CCG) said it has closed on the purchase of the properties owned by its joint venture partner, Harrison Street Real Estate.
The company bought the remaining 50.1% interest in The Grove at Moscow, Idaho, and the remaining 80.0% interest in The Grove at Valdosta, Georgia.
Campus Crest utilized about $43.5 million of proceeds from its recent common equity offering to fund the $16.2 million purchase price and retire $27.3 million of mortgage indebtedness secured by the properties.
The acquisitions imply a nominal capitalization rate of about 7.2% based on management's current estimate of the properties' next 12 months net operating income.
Chief Executive Ted Rollins said these assets, which the company developed and operates, have demonstrated strong pre-leasing and operational results, and are located at universities Campus Crest believes have attractive market characteristics.
With the completion of this acquisition, the company has purchased wholly-owned interests in seven properties from Harrison and increased its wholly-owned operating assets from 27 to 29 properties. The company continues to own interests in four additional operating assets held in joint ventures with Harrison.
The company said its preferred offering in February provided funding for its academic year 2012/2013 development pipeline, and its recent common offering provided the flexibility to buy these assets and reduce its leverage, on a net-debt-to-enterprise-value basis, by over 750 basis points, which is responsible given the macroeconomic backdrop.
CCG is trading down 0.19% at $10.43 on Friday. The stock has been trading between $8.71 and $13.22 for the past 52 weeks.