American Campus Communities (ACC) has recently underperformed the REIT index in the double-digits on fears this real estate investment trust would miss numbers, but the competent management team behind this college real estate company has a track record that suggests this underperformance presents investors with a buying opportunity, says Alexander D. Goldfarb, Managing Director and Senior REIT Analyst at Sandler O’Neill + Partners, L.P.
“While they did get behind with their preleasing, they also closed on about $1.6 billion of investments over the past year, so for a few months during the winter management was more focused on integration of those acquisitions versus the preleasing, but they’re back on the preleasing,” Goldfarb said.
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Goldfarb says ACC‘s management team has an outstanding track record going back almost a decade, and he expects this underperformance to be a temporary glitch in an otherwise stellar performance.
“It’s an extremely competent team that has a stellar track record since going public almost 10 years ago, and this magnitude of underperformance for a team that’s consistently delivered to us seems like a great buying opportunity. We think American Campus is a great company that’s been underappreciated by the market. The stock has underperformed the REIT index by roughly 20% year to date on fears that they’ll miss their preleasing numbers,” Goldfarb said.
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