Alexander D. Goldfarb is the Senior REIT Analyst in the research department of Sandler O’Neill + Partners, L.P., and has long been an advocate for buying American Campus Communities (ACC). In February 2010, Mr. Goldfarb put his investment thesis succinctly: “Universities always raise tuition; they don’t seem to know what cutting cost is. So all ACC has to do is just draft behind those tuition increases. To me, that’s a huge growth area.” At the time, the REIT was trading at $26 per unit.
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Mr. Goldfarb reiterated his ACC bullish call in June 2012 and his REIT investment thesis with this comment in an interview in an October 2012 interview: “Real estate, even at today’s valuations, because you have positive spread between financing costs and acquisition costs, you can easily achieve those 8% targeted returns that institutional investors seek, and it’s just a very attractive sector.” Currently American Campus trades at over $39 per unit and has an annual yield of over 3.7%.
In a June 8, 2013, SEC filing, BlackRock (BLK) declared a 10.17% ownership in American Campus, and one of the Directors of ACC, Oliver Luck, has been emptying his piggy bank and purchasing some units, as shown by this June 7, 2013, filing showing a purchase of 496 units of the REIT. BlackRock institutional support and insider buying demonstrate continuing value for this real estate investment opportunity.
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