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American Campus Communities (ACC 1.12%) is the only pure real estate investment trust (REIT) that focuses on student housing. You may be surprised by the huge growth opportunities in the student housing industry. In this Fool Live video clip recorded on November 16, Motley Fool.com contributor Matt DiLallo and editors Deidre Woollard and Kayla Schorr discussed the American campus community and why it is worth studying now.

Deidre Woollard: On American campuses, when all universities are closed, many people are very worried. Some people worry that American campuses will be in trouble, but they have rebounded. With strong earnings in the third quarter, the fall opening occupancy rate reached 95.8%, so it did see a sharp rebound. I believe that they are still at a loss, but they have increased their fully diluted FFOM [modified operating capital] by 25% year-on-year. Their same-store net operating income increased by about 10.5%, so all the trends that American campuses saw before the pandemic seemed to have stalled rather than undermined their arguments in general.

Matt DiLallo: This is the one that really surprised me because we have no students, but they still keep many students in these off-campus dormitories. Even last year, they would go to these off-campus accommodations and take classes online, because they just want that kind of university experience. I think no one sees how flexible this business will be.

Kayla Schorr: First of all, I think maybe we should go back and share the slides, because I know we have some key information here. I am happy to share my screen.

Woolard: I can do it.

Schorr: But what I want to say is that many college dormitories inform students, "Only do singles." or "You must wear a mask in every common area of ​​the dormitory." And there are many restrictions. Places like American campus community housing options are very attractive to students because they have more freedom and do not have to live in dormitories during the pandemic.

DiLallo: Then there is demographic data, which is what really drives their development now. The university market where they are located is very good and attracts many students. In many of these markets, supply is becoming an issue. They can only pre-sell a lot of houses because these students have no rooms at all. They are in the right place at the right time and can benefit from the true prosperity of students entering these major universities.

Woolard: But I think I believe that one of the things you and I talked about on American campuses is also the idea that universities don’t necessarily want to be in the housing business, and of course they don’t want to be in the construction and housing business, because it’s very expensive. This is time-consuming, and this is not their core business. They don't necessarily want to be involved, especially if they don't own the land yet, which really solves the demand.

I think the overall concept of going to college has changed, because in the past most campuses would allow you to live on campus for at least your freshman year, usually your freshman or sophomore year, and then let you live off campus. Now, I think partly because of the way people communicate now and more online methods, I think students need to be on campus to get the "university experience" with fewer commands.

Schorr: Sorry, continue Matt.

DiLallo: I just want to say that we are not even talking about places far away from campus, because many American campuses, their properties are often within walking distance, or they usually have very good shuttle systems or similar things, so Your relationship is very close. It's not like you live 10 miles from campus, you are very close.

Schorr: I want to say that it's interesting to actually look at these properties. The university I attended does not have specific American campus community buildings, but their modeling is very similar to them. They are really designed for students, so they have study rooms, different facilities that college students will use. Many of them are furnished. Although they are apartment buildings, they are very, very subtle because they are designed for students.

Another interesting thing about them is that I am currently studying American campus communities, many of which are in cities. They provide a very competitive option for students going to university in the urban area, and another option is these extremely expensive city apartments with few facilities. This is a very attractive company.

Delaro: I know. Whenever I saw their building, I would be jealous, because when I was in school, the campus, my mother called it a trailer park. This is how the dormitory looks and feels. This is not like that. You mentioned the convenience facilities, what the students have now is really good. It's not like I went to university a long time ago.

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