FINANCING

The financing that fits your needs.

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Contact us at P3@americancampus.com

We have structured or secured $10.4 billion of student housing transactions. And with that experience comes the understanding that your financial needs are just as unique as the housing challenges you’re looking to solve.

Financing to make it happen.

We approach each project independently and analyze the merits of all financing options with you. You choose the model that best meets your objectives for credit treatment, balance sheet treatment, cash flow and operational controls. Rather than advocating any single financing model, we help you find the financing structure that fits your goals.

TRANSACTION
STRUCTURES THAT FIT

  • American Campus Equity (ACE®)
  • Project-based, tax-exempt bonds
  • Project-based, taxable bonds
  • Taxable leasehold mortgages
  • University financed
  • Off-campus asset conveyed to university

ACE®: Accelerating your vision.

Whatever your vision, engaging our American Campus Equity (ACE®) program can help you get there faster by giving you the financial freedom you need to dedicate your capital to what matters most: educational and research facilities. All while delivering lower development costs and operating expenses, lower rents to residents, and without the use of taxpayer funds.

No use of university financial resources

At no time are any college/university resources used to finance an ACE® project. No tax-exempt debt is issued, 501(c)3 or otherwise.

Positive credit impact

Our direct ownership of the project, financial strength and large equity position will positively impact how the credit-rating agencies view the transaction.

Single-source partnership

We serve as your sole partner and bring our own equity. As your financial, development and operating partner, we are fully vested in the project’s long-term success.

No fees

We do not charge development/acquisition or transactional fees on ACE® projects. Our financial return is not derived from fees but earned through long-term cash flows and the benefits of ownership.

Expedited timeline

Our ability to fund significant pre-closing expenses creates efficiencies that lead to an expedited timeline and project delivery.

Public-Private Partnerships turn financial challenges into educational opportunities.

The P3 model is helping today’s most forward-thinking institutions focus on their core competencies while delivering the best possible experience for their students. A privatized approach to student housing preserves your debt capacity, while bringing a wide range of benefits across all facets of the project.

  • More efficient delivery timeline
  • Lower total development cost
  • Single procurement
  • Single contract and point of contact
  • Financial flexibility
  • Potential for off-balance sheet treatment
  • Potential for lessened impact on credit rating and/or debt capacity
  • Project execution
  • Professional expertise
  • Management and operating efficiencies

"The ACE® program was a key factor in our selection of American Campus for two primary reasons: It gives us the ability to preserve our debt capacity for our core academic infrastructure; and with American Campus serving as our sole partner without charging front-end fees, our interests are aligned in every aspect of the project."

- Carol Campbell
ASU Chief Financial Officer (retired)

TAX-EXEMPT BONDS

Lower cost of capital, potentially more university cash flow.

With a qualified not-for-profit organization acting as the borrower and owner of the project, the 501(c)3 status exempts the bonds’ interest from federal income taxes, resulting in a lower cost of capital than traditional taxable financing.

Benefits of Tax-exempt Bond Financing:

  • Annual net cash flow received or directed by the university
  • University maintains control of the land, with no risk of loss in case of default
  • Credit enhancements may be purchased from a commercial bank or bond issuer
  • Foundation ground lease revenue from the not-for-profit borrower
  • The borrower may enter into a management contract with the university or other third-party manager
  • Ground lease automatically terminates upon full debt repayment, with the university then owning the project free and clear
  • Debt is non-recourse to the institution, minimizing balance sheet impact
  • University does not completely transfer all financial exposure over the life of the project. Universities have a history of supporting strategically important third-party housing projects when they struggle.
     

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