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American Campus Communities Inc (NYSE:ACC)
Q1 2020 Earnings Call
Apr 21, 2020, 10:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good day and welcome to the American Campus Communities 2020 First Quarter Earnings Conference Call and Webcast. [Operator Instructions]

I would now like to turn the conference over to Ryan Dennison, Senior Vice President, Capital Markets and Investor Relations. Please go ahead.

Ryan Dennison -- Senior Vice President, Capital Markets and Investor Relations

Thank you. Good morning and thank you for joining the American Campus Communities 2020 first quarter conference call. The press release is furnished on Form 8-K to provide access to the widest possible audience. In the release, the Company has reconciled the non-GAAP financial measures to those directly comparable GAAP measures in accordance with Reg G requirements. Also posted on the Company website in the Investor Relations section, you will find an earnings materials package, which includes both the press release and a supplemental financial package.

We are hosting a live webcast for today's call, which you can access on the website with the replay available for one month. Our supplemental analyst package and our webcast presentation are one and the same. Webcast slides may be advanced by you to facilitate following along.

Management will be making forward-looking statements today as referenced in the disclosure in the press release, in the supplemental financial package and in SEC filings. Management would like to inform you that certain statements made during this conference call which are not historical facts may be deemed forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995.

Although the Company believes the expectations reflected in any forward-looking statement are based on reasonable assumptions, they are subject to economic risks and uncertainties. The Company can provide no assurance that its expectations will be achieved and actual results may vary. Factors and risks that could cause actual results to differ materially from expectations are detailed in the press release and from time to time in the Company's periodic filings with the SEC. The Company undertakes no obligation to advise or update any forward-looking statements to reflect events or circumstances after the date of this release.

Having said that, I'd now like to introduce the members of senior management that are joined here together with us for this call and they are all socially distancing. Bill Bayless, Chief Executive Officer; Jim Hopke, President; Jennifer Beese, Chief Operating Officer; William Talbot; Chief Investment Officer; Daniel Perry, Chief Financial Officer; Kim Voss, Chief Accounting Officer; and Jamie Wilhelm, EVP, Public-Private Partnerships.

With that, I'll turn the call over to Bill for his remarks. Bill?

Bill Bayless -- Chief Executive Officer & Director

Thank you, Ryan. Good morning, and thank all of you for joining us as we discuss our Q1 2020 financial and operating results. Aand more importantly, provide a comprehensive update related to our response, activities and thoughts with regard to the COVID-19 pandemic and its potential impacts on our business. Because of the latter, our remarks today will be somewhat lengthy.

As you can see from last night's release and our Q1 results, 2020 was off to an excellent start prior to the coronavirus crisis. The beat of our previously issued Q1 guidance was a result of exceeding our NOI budget for each of the three months in the quarter. In addition, as we disclosed in our prior press release, as of March 24, our fall 2020 lease-up was 3,200 leases ahead of the prior year with rental rate growth of 2.25%. While it was early in the year, all facets of our business were exceeding our internal expectations.

In late February, we launched a COVID-19 task force. At that time, our focus and planning revolved around activities and procedures to manage active cases of the virus among our residents and our ACC workforce. And what we thought at the time would still be normal and ordinary operating environments. With regard to having to respond to actual cases of the virus, today, we continue to be very fortunate as we have only been notified of nine confirmed cases of COVID-19 among our 135,000 student residents and only four confirmed cases among our more than 3,000 employees. To our knowledge, all cases were mild and none required hospitalization.

With the virus being officially designated as a pandemic on March 11 and with federal, state and local governments as well as colleges and universities soon thereafter taking unprecedented actions resulting in this black swan event, our priorities and immediate focus turned exclusively to implementing the CDC guidelines at our communities and managing the impacts related to the governmental actions taken in response to the COVID-19 pandemic.

Immediately following that pandemic classification and with the early emergence of unparalleled action by governmental entities, I sent the following internal communication to members of the ACC senior management. Team, as we embark into unprecedented territory with regard to the national response to COVID-19, I feel especially blessed to have this leadership team guiding the Company. In the span of just a few days, the world has changed in the manner none of us could have reasonably contemplated and as I stated yesterday, it's likely to continue to do so. I'm very thankful and proud of how all of you have responded.

In the days and weeks ahead, we will continue to face many more challenges that will require making very difficult real-time decisions. In times like these, it's when we should reflect on our values and let them guide our thoughts and our actions. On the last employee quarterly update call, I was asked which of our values was my favorite or the most important, I responded ACC value number four, do the right thing. And I elaborated that if we follow that one, ultimately, we achieve all of them.

Let's keep that in the back of our minds as we face the days ahead. On a daily basis, put the health, safety and well-being of our residents and the ACC family first. If you have to make a real-time decision on the spot, let that be your guiding principle. In three to six months, we will hopefully look back and take comfort that we all did the right things.

The team then got to work and face the unprecedented challenges that were emerging daily. In our attempt to do the right thing by all stakeholders, we adopted the following eight principal objectives to guide us through this crisis. Objective one: strive to maintain a healthy and academically oriented environment for our residents, by adopting and implementing all CDC guidelines with regard to cleaning, sanitation and social distancing as we continue to deliver essential services. And ensure that our state-of-the-art broadband service continues to be reliable to facilitate the delivery of online education as universities move to that medium to deliver classroom lectures.

Objective two: be compassionate and provide financial assistance and support to residents and their families who suffer diminishment of income as a result of the COVID-19 crisis. Objective three: strive to ensure that all American Campus team members have a safe, healthy and productive work environment as they continue to deliver services to our residents and university partners, and as they continue to construct and deliver our development projects.

Objective four: work with our public-private partnership university partners to understand their individual unique challenges with regard to COVID-19 and to assist them in implementing their plans and accomplishing their objectives. Anyone can be a good partner when things are going well. Our goal is to demonstrate that we are a good partner at times of crisis such as this.

Objective five: attempt to limit all negative financial and operational impacts to the period directly associated with this crisis and work to prevent negative financial impacts from carrying forward into our stabilized business model or from negatively impacting our long-term valuation for our portfolio and for our sector.

Objective six: adapt our marketing and leasing strategies to successfully complete the fall lease-up and collaboratively work with all the universities we serve in an attempt to return to state of normalcy, stability and business as usual for the 2020-2021 academic year. Objective seven: ensure that we have the necessary balance sheet liquidity to withstand the duration of the crisis. And objective eight: reflect on all the challenges that we will face during this black swan event and take note of the lessons we will learn in an effort to be better prepared for future pandemics, to improve our future products, services and operational policies as well as to advance and refine our investment and capital allocation strategies, transaction structures and underwriting standards.

During the first three weeks of the crisis, we were largely focused on gathering and maintaining all the critical data we needed in each of the 92 university markets we serve to be able to take decisive action based on highly volatile and changing circumstances. We were supporting our P3 university partners as they were responding to federal, state and local shelter-in-place and public health decisions. We were also implementing the evolving CDC guidelines in our Company and at all of our communities. And we were communicating and disseminating information to our residents and our employees. And we were focused on developing a program to assist and provide relief to our residents and the families who may suffer financial hardship.

With regard to gathering and maintaining data, our market research and training departments were immediately transformed into the COVID-19 critical data group, they developed what came to be known as our university tracker information system, where for the 92 markets we serve, we continually monitored and updated all state and local governmental guidance and shelter-in-place orders, all university decisions related to curriculum delivery, academic calendar changes, housing closures and/or housing policy changes, refunds related to tuition, room and board and fees and confirmed COVID-19 cases reported by the universities, our communities, and our staffs.

Supporting our numerous P3 university partners during the first two weeks of the crisis was one of our most daunting challenges. Universities across the nation were facing this unprecedented situation, evaluating the actual impacts of the virus in their own geographic region while simultaneously monitoring the actions being taken and the precedence being set by other institutions of higher education. Ultimately, with evolving CDC guidelines, limitations on group gathering sizes decreasing frequently and social distancing standards being widely implemented, nearly all of our universities canceled in-person class instruction between March 16 and March 23, moving to some form of online education or alternate form of curriculum delivery for the remainder of the spring semester.

In addition, many universities closed or strongly urged the vacating of their on-campus residence halls. We believe, in part due to the simple fact that it was very difficult to accomplish CDC guidelines and to meet social distancing standards in many of their 1940s, '50s and '60s era residence halls which have community restrooms and group bathing facilities. This is a meaningful fact that we'll touch on throughout this call.

In many cases, universities made these on-campus housing decisions under great pressure with an extreme sense of urgency as governors and/or local officials were about to issue shelter-in-place orders, an event which most universities nor we had contemplated in the early planning stages of managing the impacts of the coronavirus. Even though most of our own modern on-campus residents hall products did enable CDC guidelines and social distancing, as universities does not want to treat on-campus residents differently by facility. In meeting our established principle to be a good partner in a time of crisis, we supported each universities' decision and agreed to share in the financial losses of those decisions.

Because our modern residence halls were better suited to achieve CDC guidelines and social distancing, our ACE properties were typically not required to be vacated, but ultimately students were given the choice and the option to vacate and to receive a pro-rated refund. These on-campus abatements and refunds of rent were not a substantial percentage of the overall 2019-2020 total contract revenue, given that all these residence halls had May ending leases. The total on-campus abated refund of rent is expected to be in the range of $13 million to $17 million.

The vacating of university campuses and the corresponding housing decisions we discussed that, again, in many cases were made in crisis and with a great sense of urgency with little time to fully assess the impacts had four primary unintended consequences. One, for many students their college housing is their only home and they had nowhere else to go. Two, many students wanted to stay in their primary college residents and did not want to go home and risk exposing parents and grandparents who are likely in a higher risk category for complications from COVID-19. Three, the manner in which some universities as landlords required or highly suggested students leave their on-campus housing caused trial attorneys to claim a construction eviction had occurred, which fueled the demand for student refunds. And four, the universities requiring or strongly urging students to vacate on-campus housing and ultimately giving refunds put public relations, media and at times political pressure on private off-campus landlords to consider doing the same.

In response to that last item, we issued a detailed statement on our COVID-19 website page clearly explaining and delineating the differences between on-campus residence halls and private off-campus apartment style housing with regard to the physical product differences and the ability to achieve CDC guidelines and social distancing, the fact that most first year students living in residence halls were required to live on campus where off-campus students made an open market choice to lease an apartment.

The fact that private sector landlord tenant contract law governs us and our off-campus residents unlike the university on-campus resident relationship that is not controlled by such contracts. The difference in lease term where off-campus 12 month leases are unrelated to the university's nine month academic year calendar. And lastly, and most importantly in our statement, we announced our COVID-19 resident hardship program and we made the following pledge to our residents.

Our pledge is that every American Campus Communities resident will continue to have a home during this crisis regardless of their ability to pay rent on a timely basis. We will act in good faith working with every student families suffering financial hardship on a case-by-case basis to ensure our residents, continue to have a home and complete their online instruction in an academically oriented environment. At this difficult time there will be no late fees, no online payment fees and no financial related evictions. Also, there will be no negative impacts to the credit reports of those suffering financial hardship related to the COVID-19 pandemic.

The Resident Hardship Program has been very well received by our residents and the universities we serve. Its administration includes potential abatement of rent, payment deferrals, payment plans and in all cases, education and resources for students and parents on how to access the CARES Act assistance based on the specifics of their individual situation.

At this time, 2,787 students have applied for assistance under the Resident Hardship Program. To date, we have approved over $1.6 million in rent abatement for the month of April and over $400,000 for the month of May. We have also approved more than 1,000 rent deferrals till May 15 for rent due May 1 and till June 15 for rent due June 1. With many hardship participants being residents who have renewed their lease for the next academic year or who are prospective renewals, we want to be compassionate and we want to put them in a position to return to normalcy and financial good standing as part of our guiding principles to return to normalcy for the fall 2020-21 academic year and to limit the financial impacts to this period directly associated with the pandemic.

And with that, I'd like to discuss our principal objective of a return to normalcy in the 2020-2021 academic year. From our discussions with our partner universities and with public statements made by other universities. We believe nearly all of the universities that we serve are working from a primary premise that they will be resuming in-person classes in the fall of 2020. Of course, they're making those plans under the assumption there is some degree of social distancing and limitations on group gathering sizes will likely continue to exist.

Shrinking in-person class sizes, alternating in-person lectures with online lectures and other creative solutions are being discussed. At American Campus, we have an extensive outreach program in formulation to make sure universities in all of our markets are aware of the amount and availability of private modern off-campus housing, all of which is well suited to achieve CDC guidelines and to facilitate social distancing. We want to ensure that universities look to all the modern housing inventory available to them, both on and off-campus for the fall, especially if they continue to have concerns regarding housing students in their older traditional dorms with group restrooms and common bathing facilities. We hope this outreach and information will aid universities and being comfortable in making the decision to return to in-person classes in the fall.

As a backup scenario, and in case the pandemic continues to flare up into the summer and fall, most universities' backup plan is to continue with online instruction in the fall and resume in-person classes in the spring semester in January. This is not their preference with regard to the quality of education and their own economic pressures, but as the backup plan has to be in place at this time.

For American Campus, we're going to attempt to give students comfort that they should continue leasing for fall and that they should be comfortable in returning even if the universities decide to deliver fall lectures online. Our discussion rationale as to why students should and we believe will return to campus in the fall even if lectures continue to be online is as follows. One, our modern communities do facilitate implementation of CDC guidelines and social distancing. Two, our properties offer state-of-the-art broadband technology with servers ranging from 200 megabits to 1 gig per resident.

Three, they will be living in an academically oriented environment conducive to academic achievement and success. Four, with many experiencing depression and anxiety associated with the current isolation, a return to college and seeing colleagues and friends even in a social distancing environment will be a positive impact to mental health. Five, financial aid packages are in many cases sized based on the cost of housing and food incurred by the student. To achieve this amount of aid it's predicated on actually living at college. And six, a return to normal activity among this young and healthy demographic of traditional age college students appears to be desirable to them and their parents.

We'd also like to address the question some have asked regarding whether the COVID-19 shift to online classes will ultimately lead to a permanent replacement of on-campus in-person education at large public universities. We believe the answer is an emphatic, no. Lectures are only a small part of the personal growth, experience and education students receive in-person on campus. The active learning engagement that takes place cannot be achieved online. Mentoring from instructors, tutoring from graduate assistants, collaboration with other students in labs and group projects, the exposure, debate, and collaboration it takes place both academically and socially with students from different cultures, different belief systems, different socioeconomic backgrounds, different values, different perspectives. It's all part of the critical personal growth that takes place in the college experience.

The process of having your own views, beliefs and thoughts challenged, fortified or evolve and change if they don't hold up is, again, essentially the personal growth that takes place in-person on campus. This active learning in-person on-campus engagement is what prepares us for life after college. It all goes far beyond a classroom lecture, not to mention the lifelong relationships, pride, and sense of belonging with your college peers that evolve in each unique university culture. For me, that's let's go mountaineers, for others it's roll tide roll, hook 'em horns, gig 'em or go tigers.

Personal growth in education occurs far beyond the lectures in the classroom. The reality is that the broader on campus in person experience prepares us to evaluate, learn, mentor, collaborate, rationalize logical conclusions to overcome its challenges and to seize opportunities for the rest of our lives. For me, personally, my business and life success just simply would not have happened without my in-person on-campus education at West Virginia University.

As we now talk to students, professors and university officials, this hiatus to on-campus learning is only making it abundantly clear to all that in-person on-campus instruction is the preferred and most effective medium for the delivery of higher education now and in the future.

A return to normalcy will occur, hopefully, this fall with the commencement of in-person classes but almost certainly sometime during the 2020-2021 academic year. And we believe American Campus will continue to be the industry's best-in-class company, the university partner of choice and the group that institutional capital desires to partner with if given the opportunity. We also importantly believe that the stability of cash flow investment thesis and the recession resiliency that our space has always provided will continue to prove out over the long term when compared to the broader residential sector and other areas of real estate.

And while we may not be immune from the short-term financial impacts of a black swan event as has been demonstrated by the COVID-19 pandemic. We and our university partners are much better prepared to complete the process of withstanding this event and in facing similar ones in the future.

And ultimately, as I've referenced numerous times in my comments, we believe universities have realized through this pandemic that many other older facilities with group restrooms and community bathing facilities are less than ideal with regard to pandemics, spreading communicable illnesses or even managing a flu outbreak as they look to potentially take these facilities out of service in the years ahead and replace them with modern housing products such as those we have been developing on campus for decades. No one is better positioned than American Campus to assist them in carrying out that objective.

In closing my remarks, I'd like to thank the American Campus team for their incredible dedication and hard work throughout this crisis, especially our on-site teams who are coming to work every day to provide essential services to our residents. I'd also like to thank our corporate team members who putting countless hours in dealing with this unique and complicated situation, and I'd like to give a special shout out to those working from home without child care. We've had quite a few infants and toddlers make appearances on ACC video calls in the last several weeks. And to my executive and senior management team, I have never been more proud than I am of the work that you have done over the last month.

We want to thank our independent board of directors who have made themselves available throughout this crisis and devoted significant time and contributed greatly in assisting the executive team as we approach the emerging challenges. We'd like to thank our university partners for working with us hand in hand as together we faced an unprecedented situation from which we both learn valuable lessons. We'd like to thank you, our shareholders who believed in us and supported us over the years.

Throughout this crisis, the decisions that we have made and will continue to make are not based on maximizing earnings for any given quarter or for the current year but rather in making sure that the decisions we make at this time of national crisis are based on our values and our culture of doing the right thing for our student residents, our university partners, the ACC team members and all stakeholders, which will enable us to emerge from this crisis poised to create stable and long-term value for years to come.

And lastly and most importantly, I want to thank our student residents and their families for their patients, their understanding and their continued patronage. While we haven't been able to honor every request, we do renew our pledge that every American Campus Communities resident will continue to have a home during this crisis regardless of their ability to pay rent and that we will act in good faith, working with every student family suffering financial hardship on a case-by-case basis to ensure our residents continue to have a home and to complete their online instruction in an academically oriented environment.

With that, I'll turn it over to Jennifer to discuss operations and leasing.

Jennifer Beese -- Executive Vice President, Chief Operating Officer

Thanks, Bill. As seen on page S-5 of the supplemental, quarterly same-store property NOI increased by 1.2% on a 0.7% increase in revenue and operating expenses coming in flat to prior-year quarter related to our ongoing asset management initiatives. We exceeded our expectations for the quarter and while we certainly saw cost savings in March as we pivoted our operations and business focus to meet pandemic protocols. We had also performed well in the first two months of the quarter.

From an expense perspective, during the social distancing phase of fighting COVID-19, we have and will continue to evaluate opportunities to mitigate costs where possible, including elimination of non-essential travel expenses, reductions in event related and promotional marketing costs, controllable utility expenses and most non-essential repairs and maintenance and capital items. As we continue to provide essential services at our properties and move our business forward, we have not laid off or furloughed any of our corporate or property staff at our owned communities, which largely remain fully staffed. While our payroll growth for the first quarter was 6.9%, it came in 4 percentage points below our original expectations for the quarter. As we discussed on the last call, payroll growth this quarter was expected to be elevated due to a combination of a difficult comp in the prior-year quarter and increases in FLSA minimum exempt status salaries and statutory minimum wage increases in numerous states.

Moving into next quarter, even as we continue to provide essential services, we expect our payroll expenses to moderate or decline as they will reflect the result of a hiring freeze, allowing natural attrition to create efficiencies and limited over time amounts.

Nearly all of the universities we serve have moved to some form of online education to deliver their spring and summer academic curriculums permitting students to complete and earn full credits. It is our goal to ensure that all of our residents can continue to receive an academic instruction, complete their coursework and have a home conducive to their academic success. As Bill mentioned, part of the unintended consequences of universities closing their on-campus housing was the displacement of students that wanted to remain in their respective markets.

During the month of March and April, the off-campus market has seen an increase in move-ins, largely due to these displaced students. In fact, ACC has welcomed over 900 new residents to our modern purpose-built facilities during this time. Also during the month of April, we have seen approximately 93% of our student residents make their April rent payments. As detailed in our March 26 press release, our pre-leasing for the fall semester was outpacing prior year pace by 330 basis points at that time. As expected, since the pace of our activity has slowed during this crisis we will periodically update the market regarding our leasing status for the 2020 and 2021 academic year.

As you can see on page S-8 of our supplemental, our 2021 same-store properties are 76.6% leased for academic year 2020 and 2021 compared to 76.2% leased in the prior year. This chart reflects the slower pace of applications and leases over the last three days, last 10 days and since March 16. Our leasing velocity is at approximately 60% of normal pace, a slowdown which was expected. We take comfort in the fact that this time our communities are maintaining comparable market share to last year's lease up and have not experienced elevated levels of lease cancellations for the upcoming academic year.

We are utilizing a variety of online and social tools in our leasing activities including virtual tours, chat functionality and social media marketing to continue to build traffic, procure applications and execute leases. We believe that the leasing velocity going forward will heavily be influenced by the timing of universities providing clarity on the reopening of in-person classes on campus. Daniel will cover broader revenue impacts resulting from COVID-19 in his prepared remarks. With that I'd like to thank the entire ACC team and particularly our on-site teams during this unprecedented times.

And now I'll return the call over to William who will discuss our investments activity.

William W. Talbot -- Executive Vice President, Chief Investment Officer

Thanks, Jennifer. Beginning first of our capital recycling activities, we completed the disposition of The Varsity, serving the University of Maryland on March 20 at a sales price of $148 million. The transaction closed at contract pricing in the midst of the COVID-19 crisis and represents a 4.1% economic cap rate on in-place revenue and projected operating expenses.

Moving to our 2020 development deliveries, I am pleased to report that all housing projects are still ongoing and under construction as housing has been deemed an essential service within each ethical jurisdiction, including our own projects in [Phonetic] San Francisco State University and the University of Southern California Health Sciences campus. Labor on site remained strong and our general contractor partners have implemented guidelines compliant with the CDC on each development site.

Despite the disruption across the country, our 2020 deliveries continue to track on time and on budget. Circumstances in municipal regulations can change daily in each of these markets and we continue to carefully monitor the situation. As it relates to our developments serving the Disney College Program, we expect to receive all necessary certificates for occupancy this week for the entire first phase, which includes the three residential buildings totaling 800 beds, as well as the community center and the Disney Education Center and work still continues on all phases under construction. As has been reported, Walt Disney World is currently closed due to the COVID-19 pandemic and Disney has suspended the college program temporarily. Disney has not announced a date for the reopening of the parks and resorts, but we would expect a phased approach to reopening with a similar phased recommencement of the Disney College Program.

As a reminder, we expect to deliver an additional 800 beds in August, bringing the total amount of beds to 1,600 delivered in 2020, a modest amount compared to the historical participant levels prior to the suspension of the program. Per the terms of the ground lease and Disney's continued commitment to the partnership, all participants will occupy our beds first with additional participants being housed in the existing communities that will go offline as we deliver additional beds. Our project will be ready for immediate occupancy when Disney elects to restart the program and our beds will be filled with the first arriving participants.

Disney is maintaining a strong bench of interested applicants for the intern program and although the ultimate timing related to occupancy of the project is unknown, we remain in constant regular contact with our partners at Disney. If the intern program is suspended for a prolonged period of time, we have the right in the ground lease to open the project to all of Walt Disney World's more than 75,000 Orlando-based employees along with additional backup provisions where we have the right to convert the project to a hotel and which Disney has the right to offer and manage as part of their hospitality portfolio. Each of these alternate uses have pro forma returns equal to or greater than the developments intended primary use.

Moving to our on-campus development pursuits. We are extremely pleased to announce two new on-campus development initiatives. On March 27, we entered into a pre-development agreement with MIT for the development of a graduate student housing community expected to consist of approximately 650 beds. In addition, we are awarded a second development project on the campus of Virginia Commonwealth University. The full scope, transaction structure, feasibility, fees and timing for both projects has not yet been finalized. We continue to pursue numerous active procurements that are continuing throughout the COVID-19 crisis and remain active and continue the work of our university partners on pre-development activities surrounding our previously announced awarded projects.

As Bill mentioned, this pandemic has highlighted universities' limitations to operate within CDC guidelines, including social distancing in older 1940s, '50s and '60s-style residence halls that consists primarily of small, dorm-style double occupancy rooms and community restrooms and baths. We believe that many universities will now seek to replace these older facilities with new modern developments that are better suited to comply with CDC guidelines and social distancing requirements during a pandemic-type situation. ACC is uniquely positioned to act on this opportunity.

I'll now turn it over to Daniel to discuss our financial results.

Daniel Perry -- Executive Vice President, Chief Financial Officer, Treasurer

Thanks, William. As we reported last night, total FFOM for the first quarter of 2020 was $97.6 million or $0.70 per fully diluted share, which was $0.01 above the high end of our expectations. Prior to the impacts of the unprecedented actions taken by federal and local governments in response to COVID-19, American Campus was performing well relative to our plan for the year. We had completed a $400 million 10-year bond issuance at a record rate and redeemed the bonds due to mature in October.

Completed the $148 million disposition of The Varsity and been awarded two new on-campus development projects, as William discussed, even after the effects of the governmental shutdown had started to take effect. And our lease up for the 2020-2021 academic year was trending ahead of expectations. Further, same-store NOI growth was better in all three months of the quarter than we anticipated, primarily due to good operating expense control. More specifically, we were able to maintain operating expenses lower than our budget for each line item in each of the three months of the quarter other than in the uncontrollable area of insurance.

As Jennifer described, through the coming months and quarters, we will continue to lean on expense control measures to somewhat offset any potential negative revenue impacts we experienced due to the pandemic. We have also deferred most non-essential capital improvement projects at this time. Due to uncertainty about the length of time governmental shelter-in-place orders will continue, we are unable to predict the full magnitude of the pandemic and its effect on our results of operations for the remainder of 2020. Therefore, we are not issuing new earnings guidance at this time.

As we reported in last night's press release, at our ACE properties and off-campus residence halls, to date, we have agreed to refund approximately $13 million to $17 million in rent to students who have elected to return to their permanent residences for the remainder of the spring semester at the urging of their universities. We realize this will have a significant negative effect on 2020 FFOM absent any potential government stimulus offset. But as part of our value set, Bill discussed, it is imperative that we act as a good long-term housing partner to the universities we serve.

At our off-campus properties and 12-month apartment style on-campus ACE properties we have been monitoring rent collections for April closely. And at this time, approximately 93% of residents have made April rent payments, which translates into approximately $3.7 million in delinquent rent at this time. We will continue to pursue collection of outstanding April rent payments, but we are also working on a case-by-case basis with students and parents who have endured financial hardship due to COVID-19. Based on requests received to-date, we expect to provide approximately $1.6 million in rental assistance for the month of April related to financial hardships.

Finally, given the uncertainty, most of the country is expecting with regards to summer camps this year, we expect that most of the summer camp and conference business at our residence hall properties will be canceled, which typically generates approximately $4.5 million in other income per year. American Campus is fortunate to have a strong and healthy balance sheet and substantial liquidity to allow us to absorb the disruption COVID-19 has caused. We have approximately $570 million in liquidity on our balance sheet between the cash on hand and availability under our revolving credit facility. We have no remaining debt maturities in 2020 and a manageable $168 million in secured mortgage debt maturing in 2021.

With the completion of the $400 million bond offering in January and the $148 million disposition in March, we have no other capital events to complete that were part of our capital plan for 2020. As detailed on page S-15 of our earnings supplemental including all projects currently under development for delivery through 2023 we have only $355 million in remaining development capital needs. As of March 31, the Company's debt to total asset value, NAV, of $177 million and cash on hand was 39.7% and net debt-to-EBITDA was 6.9 times.

With that, I'll turn it back to the operator to start the question-and-answer portion of the call.

Questions and Answers:

Operator

Thank you. We will now begin the question-and-answer session. [Operator Instructions] The first question today will come from Alexander Goldfarb with Piper Sandler. Please go ahead.

Alexander Goldfarb -- Piper Sandler -- Analyst

Hey, Good morning. Good morning down there.

Bill Bayless -- Chief Executive Officer & Director

Good morning.

Alexander Goldfarb -- Piper Sandler -- Analyst

A few questions for you guys. First, can you just give some more perspective on how the schools are thinking about opening for the fall. Clearly, there is -- it would seem pretty tough for them to stand out full tuition, expect full tuition and a lot of these guys have big football programs that are financially important. So, if each school sort of making its own decision, are they being governed by the state legislature, are they all looking to the CDC. I mean, what are your contacts there telling you about their ability to open and what steps they are taking right now to explore how to open for the fall?

Bill Bayless -- Chief Executive Officer & Director

Yes. And as we talked about in our comments, Alex, most schools and those that we partner with directly and those where we're off-campus and following their statements, are all planning on having in-person classes in the fall. That's their goal. It's their objective. They all plan on but one thing that we saw consistently there have been no refunds of tuition even as they moved online and there have been no discussions whatsoever of any type of tuition relief current or going forward, that's a critical source of revenue for the institutions. And so they have been pretty stalwart from that perspective. I think, everyone as we all are as a nation are being very practical and realistic at the moment. Everybody is watching and tracking what the governmental actions are of the pandemic and how America may attempt to open back up and the university certainly consider themselves part of that.

They're all very optimistic, but they all have backup plans. Everyone is being realistic to make sure that if they are not able to implement that they can continue the online portion in the fall. I would also say, you may see a lot of variation geographically. Ultimately, when you look at the coastal areas and the highly urbanized areas versus your large, rural land grant institutions, you could see some differentiation there based on how the virus plays out.

As it relates to college sports, that's something that everybody is watching. The biggest challenge is that typically for the football season, the football players come back very early to start training camp. And so we've heard conversations that there could be a delay in the opening of the season or maybe even a pushing till spring or compressing it somewhat. We typically have all those weeks between the end of the season and the bowl games.

And so we believe most institutions, certainly, want that to continue to take place. How they regulate crowds and whether it's everybody back in the stadium or there is some variation of that is all to be determined, but universities just like every business in America look at this crisis from the perspective of they want to make sure their sound coming out of the other side, and so they do look at their sources of revenue that how they may be in jeopardy and how they can preserve whatever they can while continuing to deliver a quality product and service to their residents.

Alexander Goldfarb -- Piper Sandler -- Analyst

Okay. And then, Jennifer, you mentioned that pre-leasing is at the pace of 60% of last year. So, it seems like to some degree the students are more than half optimistic that school is starting. So, can you just give a little bit more color and the recent three-day data seems to be a pickup, but maybe that's just three days. But can you sort of give us color on what the students are feeling for their incentive to be back on campus.

And then are you guys, is your view that whoever is signing up right now has the right to cancel, no questions asked or if the students are signing up now they are financially committing just like they did this prior year?

Bill Bayless -- Chief Executive Officer & Director

Yeah. Alex, let me go ahead and take some of that is that when you look at the chart we put in there, and this is how we started measuring the leasing velocity when the pandemic began. As we started internally looking at that every day currently, three days, 10 days, 20 days and then year-to-date. And I'll be candid, I mean, when this all first started three weeks ago and the shelter-in-place orders were put in and the universities haven't provided a lot of clarity on definitiveness related to fall. And we have commented in our press release that we expected a slow down in velocity.

I personally thought it would be much greater than it is. And look, we've had 5,000 leases signed since March 16 through today. And 60% of the normal activity is pretty solid activity. The other thing that we have seen with these leases that we have in place is, our cancellation rate is actually down 200 less than our usual trend through this time this year. And so we see students continuing to make decisions and also all of those that previously made decisions there is no acceleration whatsoever in request for any cancellations.

And so I think we and students are all working from the perspective of that scenario one that universities are going to be -- going back in session. As I mentioned in our comments, we still have properties off-campus properties where students are online as high as in the 90s in occupancy where students are staying there and taking their classes. And so with all the things we talked about with our technology infrastructure, not many students have a gig of delivery of broadband in their homes.

And so there's a lot of reasons for students to want to be in their college towns in an academic environment to where even if the schools don't open up in-person classes in the fall, I don't think that necessarily speaks to a student may not want to be at their college town taking those classes online. And so from our perspective, that all needs to play out. The way that we look at our contracts that are currently in place that have been pre-signed for fall, certainly, we are going to honor those contracts.

We would expect many and most students would move in in just in full candor if a student never takes possession of an apartment unit. That's typically a situation where in normal and ordinary circumstances, it's very difficult to collect or hold them to that rent. But those are all bridges we will cross and manage through and keep communicating with you all as we go through. But at this point, we continue to be optimistic in what we're seeing from student behavior in terms of not seeking cancellation of the existing leases, continue to sign leases for fall and prepare as though every one's hoping that those fall on-campus openings will take place.

And the other thing I mentioned also in my prepared remarks and I really think it's something that could be for long term for American Campus positive impact and that is that the universities and the reason we have our outreach program now that we're formulating and undertaking is that if you're college and university and you're someone that hasn't modernized your housing and your stock does consist primarily of older traditional residence halls with group bathing and restroom facilities. That's a product that just think of yourselves as parent, your kids, in this type of environment, you may have a little bit of apprehension.

And so that's where we're making sure all the colleges and universities understand all of the product available to them and even to the point where multifamily in proximity to universities. We want to make sure they understand that's available. So, they know there are products that students can achieve all the government guidelines near their campuses.

Alexander Goldfarb -- Piper Sandler -- Analyst

Thank you, Bill.

Operator

Our next question will come from Nicholas Joseph with Citi. Please go ahead.

Nicholas Joseph -- Citi -- Analyst

Thanks. Just on the pre-leasing that you announced this morning. So, your 40 basis point you had year-over-year in terms of occupancy, but what is the rent growth for those leases versus where they are this current academic year?

Bill Bayless -- Chief Executive Officer & Director

Yeah. And I covered that in my script, Nick. We are at 2.25% rental rate growth at this moment.

Nicholas Joseph -- Citi -- Analyst

And has there been any change over the last three weeks versus what you had signed pre-COVID?

Bill Bayless -- Chief Executive Officer & Director

No, it actually trended up slightly, about 10 bps. And again our velocity was excellent going into this. And so we did have pricing power going in. And as I've -- the thing that we monitor most closely at this point in time when we look at our velocity being 60%. When we look at it market by market, we're always measuring what is our historical velocity compared to our velocity prior year, but then more importantly, what is the market velocity this year compared to prior year.

And as long as we see parallel and relativity in terms of market share as Jennifer mentioned in her script, then we have not seen major decreases in rent in any of the markets where people were panicking. I think, the industry all acknowledges that some students are just being prudent and waiting to hear what the universities' ultimate actions are going to be, what the start dates are going to be in delaying that decision. So, we have not seen pricing diminishment at this point in time, certainly, as we look at finishing the lease-up in the months of -- we do think it's going to be later.

We think this velocity slowness will continue at least until everything is being done virtually in online. We're doing Facebook tour or FaceTime tours, all the technology. There is no one coming in in the physical models or so. When the shelter-in-place orders are lifted and students are -- some students got caught, a lot of these happened over spring break. And then the universities extended its spring break a week.

And so a lot of residents got caught at home when the shelters-in-place were ordered and are waiting for them to be lifted to come back. And so there is a potential when the shelters-in-place geographically are lifted that we'll see some uptick in velocity. But we think it is going to be later in June, July and August, and that's where, if there is any volatility in pricing that we hope won't happen but we'll monitor it closely as when it could.

Nicholas Joseph -- Citi -- Analyst

Thanks. That's helpful. And then just one more, in terms off-campus rent collection, so you had 93% in April. What are your current expectations for May, June and July? And is there any reason you would think it would be above or below what you saw in April?

Bill Bayless -- Chief Executive Officer & Director

It's just too hard to tell. And I mean, I'm sure as you ask all the residential multifamily companies this question too, we're all going to -- everybody is going to answer, there's just so much of a degree of uncertainty. The one thing that we are attempting to do. And one, we do want to help the students and families who are suffering at this time financially. The other thing that I mentioned in my comments and Brian Winger, our Counsel, and a team that he's leading, we have gone through that CARES Act backwards, forwards and sideways from the perspective of our residents and our parents.

And so when we're collecting their hardship applications, we're getting the details that them losing their part-time jobs or mom and dad independent contractors or small business owners. And when we respond, we're sending them what we believe are the most direct avenues available to them in the CARES Act. And so we're attempting with the people that are having hardship now in addition to providing them relief to make sure they know all the resources available to them. So, hopefully, that will change their situation.

So, theoretically, could people be better than they were in April. Yeah, theoretically. But obviously, more people are losing their job, some people even the CARES Act since [Phonetic] may not be enough. So, at this point there's just really too many unknowns as we go into those months. But we're hopeful, we -- I'll be candid again and when this -- three, four weeks ago, the world was pretty scary. And when I sat around and thought what April collections may be they weren't 93%. So, I will tell you, I'm very happy to see the level of continued rent payments that are taking place. And I think the multifamily folks would say the same as I understand. We're right in line with the rest of the residential sector in those percentages.

Nicholas Joseph -- Citi -- Analyst

Thank you.

Operator

Our next question will come from Neil Malkin with Capital One Securities. Please go ahead.

Neil Malkin -- Capital One Securities -- Analyst

Hey, everyone. Good morning.

Bill Bayless -- Chief Executive Officer & Director

Good morning.

Neil Malkin -- Capital One Securities -- Analyst

My first question was about the ACE, you gave the number $13 million to $17 million is what you believe the potential revenue loss for April and May would be, but I think about 25% of your total bed are ACE. So, it would seem to me that number would be much higher for both months. So, is there a difference between the 10-month and 12-month, I just -- could you explain, how you get to that $13 million to $17 million. Like I said, it has been like it would be higher.

Bill Bayless -- Chief Executive Officer & Director

The large majority of that $13 million to $17 million is in first year residence halls, where the leases in those residence halls and in May. And so the period for which students moved out ranged anywhere from April 1 to April 20. And so the pro rata refunds are on the tail of the academic year leases. You may remember those residence halls are pro forma [Phonetic] and invested in based on virtually all of their contract revenue comes from August through May. And so those leases are small impacts in terms of the total contract revenue.

And why it's a smaller percentage that when you think of the over broader all ACE revenue thinking about it on a 12-month basis. We do have some 12-month on campus properties that are apartments. And for the most part, those continue to be treated as off-campus. And that while the residence hall properties that we have on campus in most cases are administered under the university's housing requirements and their actual direct management and policies consistent with their own, where we have ACE apartment properties, typically, we leased to the students again in an open market environment open choice where they're covered by tenant landlord law under normal leases.

And those we administer in and so for example when we give our rent delinquency number, those 12-month apartments on campus are typically covered in the same categories, all the off-campus, they are included in at delinquency percentage that you heard.

Neil Malkin -- Capital One Securities -- Analyst

Okay. So, $13 million to $17 million sounds like it's a former not the latter. Is that the way to think about that?

Bill Bayless -- Chief Executive Officer & Director

Yeah, yeah, it's -- think of it predominantly as the nine-month residence hall products.

Neil Malkin -- Capital One Securities -- Analyst

Got it. Thanks. And then just in terms of your then Hardship Programs, just wondering if you talk internally about how would you demarcate or what time will you use to say like we're not going to be giving aid anymore. Is it a federal thing, majority of state having the shelter-in-place expire, what would be the use of that?

Bill Bayless -- Chief Executive Officer & Director

And this is where, as we have said, we are going to administer this on a case-by-case basis. And we have set up and again the amount of work the team has done in 30 days to prepare for these unique situations is administer and process this. But as I mentioned, right now we have 2,985 applicants in the Hardship Program and we have administered that program for them and as you heard in my comments we've made adjustments for them for April and May in the numbers that I gave and we provided deferments. And as I just mentioned, we're are pointing them to hear the sources of the stimulus available for you.

We will now work with those residents in the program literally on a case-by-case basis, in terms of what they can afford to pay, whether it's partial or nothing or what other forms of deferral we may need. If they are a graduating senior and they're going to have a hopefully a job, it maybe a little harder for them, but they are going to have a job, then we may have a payment plan for them that extends beyond the end of this academic year for them.

By contrast if they're returning resident and on their new leases in the fall, they're going to have to pay rent in April 1 or August 1 or September 1. We're going to work with them to try to give them as much relief as we can to put them in a financial position that they can become a paying tenant in a return to normalcy. And so administratively, I mean, this is a lot of work and we've got about 25 people that have been rededicated solely to administering the hardship program with the site personnel. Also, we, our board of directors is involved through all this.

And so as we look at, some companies have announced here is the size of the pool, we felt it was better for us to attempt to administer on a case by case and to be flexible as we rolled it out to see what the impacts are and to make decisions based upon the scale and the cost, and so we'll continue to do that.

Neil Malkin -- Capital One Securities -- Analyst

Okay, great. And then the last one, I know it's early on, but just given the sort of older vintage of traditional on-campus housing and the [Indecipherable], have you seen any new universities start to reach it out to you just kind of regarding that there would be any indication of -- maybe how the post-COVID trajectory of how the public partnership would grow?

Bill Bayless -- Chief Executive Officer & Director

Yeah. No, it's still too early and again we and our university partners have absolutely gone through a bit of a crisis in the last weeks and are just catching our breath from having the administration of all this behind. And as I mentioned, our first conversations with them on this subject matter is first revolving around reopening this fall and making sure that if they have any concerns relating to the product in the context of their reopening plans that we make sure that they're are really thinking about everything available to them in the off-campus housing market. So, that they think about all the product that can achieve the CDC guidelines.

Those conversations are then naturally going to evolve into the graduation of those discussions. I'll tell you also, we talked about one of the things when we went into this, one of the objectives I mentioned was, let's pay attention to the lessons we learn in this. And so we have two properties where we have actually designed what we at the time thought were just absolutely the best compartmentalized group bathing and restroom facilities in a modern fashion. And we thought that may be a big part of our future, because that really allows you to create great efficiencies and to get your cost per resident -- your rent per resident down.

And so we look at that we say, OK, we now rethink where we were evolving some of our product design. The other thing we're looking at is, is there a way to think about sanitization and sterilization in those type of products as modern technology improves. And so, I think, all of higher education coming out of this is really going to be doing a lot of reflection over the next six, 12, 18 months. And I do think what we have all just experience is going to be a big driver of future design and program on campus.

And we will -- the average age in the 68 markets we serve of on-campus housing is 52 years old. And so, we're talking about a lot of product that may need to be recycled. The other thing that I'll say is that off-campus purpose-built apartments with their full kitchens and living rooms typically never more than one or two people for bathroom are an absolute product of choice in this environment. And so, again, that's where we're going to have the outreach to make sure universities are thinking about all that may be available to them.

Neil Malkin -- Capital One Securities -- Analyst

Thanks, guys.

Operator

Our next question will come from Austin Wurschmidt with KeyBanc. Please go ahead.

Austin Wurschmidt -- KeyBanc -- Analyst

Hi. Good morning, everybody. As it relates to the pre-leasing detail, would you be willing to break out specifically what off-campus pre-leasing is for the fall, it seems like maybe that would provide a better sense of the potential downside risk to the extent that schools aren't able to reopen come fall?

Bill Bayless -- Chief Executive Officer & Director

Yeah. Austin, we had not specifically broking that -- broken that out in the total figures that we have given. I don't know we want to get into those levels of the tail in terms of the disclosure. I'll actually -- the one thing that we do want to do through this process and certainly will take into consideration the question that you did just asked. We want to provide as much transparency as possible as it relates to delinquency and lease up, all the way through this unique period. And so it's something that we'll continue to do throughout this time for certain. I will say, I don't believe there's any material differences between the total numbers we're showing you and the off-campus, on-campus segmentation. It's minimal.

Austin Wurschmidt -- KeyBanc -- Analyst

Okay. Understood. And then just a quick clarification with respect to the $2 million of rental assistance, is that figure captured in the $3.7 million of April delinquency?

Bill Bayless -- Chief Executive Officer & Director

Yes.

Austin Wurschmidt -- KeyBanc -- Analyst

Or is that separate?

Bill Bayless -- Chief Executive Officer & Director

No, that is within. So, when you look at that the 7% delinquency, the amount being awarded under the hardship program is to people that are part of that delinquency. So, that's not on top of that is within.

Daniel Perry -- Executive Vice President, Chief Financial Officer, Treasurer

Yeah. One thing I will clarify on that as Bill said in his prepared remarks, Austin, is that $2 million is comprised of some amount related to folks who are asking for hardship for the month of April, which is $1.6 million of the $2 million and some amount which is the remaning $400,000 is related to folks who paid the rent in April, but have submitted the financial hardship form for the month of May. So, the $1.6 million is what's specifically a supplement of the $3.7 million.

Austin Wurschmidt -- KeyBanc -- Analyst

Appreciate the thoughts. And then just last one from me is, I'm curious what the contingency plan is, I guess, again to the extent that the universities don't reopen come fall and what that may mean for your capital plan impact to the balance sheet? And then ultimately how you're thinking about the dividend?

Daniel Perry -- Executive Vice President, Chief Financial Officer, Treasurer

So, several big topics there. Obviously, as we start to look into the fall and think about what could happen in terms of occupancy and what would that mean for us. Right now, we make about $76 million a month in revenue. So, if you just start to do the math on it and you say OK about 10% of -- every 10% of occupancy is about $7.6 million of revenue, that would tell you that around 60% occupancy would be about $130 million of revenue over those 4.5 months of the fall. If we went to an extreme of a scenario as schools not recommencing in-person learning until the spring semester.

And so that combined with the current revenues that we're talking about with regards to the refunds, rent delinquencies and the lost summer camp and conference business, would put us in that $160 million to $170 million range. So, we have plenty of capacity and liquidity to absorb that. We talked about, we have $170 million of cash on hand or availability on our line of credit, we have about $230 million in development funding needs for the rest of this year and then we would obviously have some level of free cash flow generation that you would normally consider as part of that.

So, plenty of liquidity to absorb it and get us through this time period. Obviously, the other topic you mentioned is the dividend. That is something we always discuss in great detail with our board, obviously as you can imagine. It will be discussed in more detail than normal at our upcoming board meetings. We've talked a lot in the past about the value of our dividend. The value, the stability of our dividend, we maintained our dividend throughout the great recession in '08 and '09 and that was something that we were very proud of.

Our investors placed a lot of value on and we are cognizant of that. But also we are obviously in unprecedented times and want to make sure that we are healthy as we can be. And so all of those things will be taken into consideration as we continue to assess the dividend, not just this quarter but throughout the rest of the year.

Austin Wurschmidt -- KeyBanc -- Analyst

Appreciate the thoughts there and hopefully it doesn't come to any of that.

Bill Bayless -- Chief Executive Officer & Director

Yeah, we certainly hope so as well.

Operator

Our next question will come from Jeffery Spector with Bank of America. Please go ahead. Mr. Spector, your line is now live.

Jeffery Spector -- Bank of America/Merrill Lynch -- Analyst

Can you hear me now?

Bill Bayless -- Chief Executive Officer & Director

Yes, sir.

Jeffery Spector -- Bank of America/Merrill Lynch -- Analyst

Great. Thanks for the opening remarks, and in particular, all you're doing. A few questions on the backup plan discussed, let's say, fall lecturers online. Is there a scenario where even the on-campus dorms using CDC guidelines could actually be open?

Bill Bayless -- Chief Executive Officer & Director

Yeah, I mean, there is -- and when you look at the modern products that we have built on-campus and the residence hall products that we built, the large majority of what we've constructed over the last 10 years, all have in-unit bathing and restrooms. And so you are able to achieve that. There where the universities are working their plan is how they make sure they deliver the food service portion of students living in facilities without kitchens to make sure they meet the CDC guidelines, as it relates to that particular arena.

But a lot of the modern residence hall products indeed do provide for better ability to do the social distancing. Even in the residence halls also that may be older, I'm sure another consideration and Jamie Wilhelm just actually slip me enough from one of the things they're doing is they're looking at reducing density to get it to more manageable numbers within the guidelines on some of their older products. And so these are and again, when you ask us -- the last 30 days have been around managing the impacts of the crisis as emerged [Phonetic].

The next 30 days for us is having these dialogs with the universities where we all think out of the box to make sure we create the most acceptable modern socially distanced products available that they have available to think about what they want to do in the fall. The other thing I will mention again that I answered to the previous question, you very well may see geographic differences on how this occurs. Again, when you think about a large urban university in Boston, New York versus Tuscaloosa, Alabama or Lawrence, Kansas. They have completely different environments and different trends of the viruses that people may be dealing with. So, this will not be one size fits every universe.

Jeffery Spector -- Bank of America/Merrill Lynch -- Analyst

Okay. That's encouraging. I was thinking about...

Ryan Dennison -- Senior Vice President, Capital Markets and Investor Relations

Jeff, we lost you there.

Jeffery Spector -- Bank of America/Merrill Lynch -- Analyst

Can you hear me OK?

Ryan Dennison -- Senior Vice President, Capital Markets and Investor Relations

Yes.

Bill Bayless -- Chief Executive Officer & Director

Yeah, we got you back. The last word was, I was thinking about.

Jeffery Spector -- Bank of America/Merrill Lynch -- Analyst

Just your comment, so that's encouraging that there is a scenario even if it's online learning potentially even on-campus dorms opening based on the CDC guidelines and your comment on food services, that's exactly. I was thinking about, whether it's on-campus or off-campus in terms of food services or your 24/7 gyms or the study lounges.

Bill Bayless -- Chief Executive Officer & Director

Yeah.

Jeffery Spector -- Bank of America/Merrill Lynch -- Analyst

Can all of that be done based on CDC guidelines?

Bill Bayless -- Chief Executive Officer & Director

Now, here's what we have done. And so take our gyms as a great example. All of our gyms in our facilities are closed at the moment. And so part of implementing the CDC guidelines is making sure within areas of the building where you would not be adhering to the standards that we take the operational actions to do so. And I want to put this in perspective, I'm looking at our university tracker that I mentioned earlier.

Right now today with fall classes online, 25 of the universities we serve continue to have on-campus occupants that they are providing modified food services to, right now. And so universities are already doing that in this session. So, it is something, and again, in many cases if they -- and again, all -- take, our ACE products at Arizona State, which are all modern design. The students at ASU were given the option to vacate versus being told you have to leave.

And so we would expect universities in the fall to continue that in energy universities that -- and let's [Phonetic] universities need this income also. They are already strapped for cash in their budget and so when they look at their sources of income, tuition fees, room and board, those are things that to the extent that they can safely accomplish the reopening of those items. They're heavily motivated to do so.

Jeffery Spector -- Bank of America/Merrill Lynch -- Analyst

Okay. Thank you. That's very interesting and helpful. And then, Bill, based on your comments about geographic diversity, I guess, even the stats you provided the three-day versus 10-day leasing stats, is there any -- are there any differences based on geography where you are seeing strength versus weakness or is it really across your portfolio?

Bill Bayless -- Chief Executive Officer & Director

It does vary somewhat. We were -- the first call that I had with Jennifer and the LM, the leasing marketing director team, this was three weeks ago. At that point in time, they said Boston had greatly slowed down, but the University of Kentucky was almost as though nothing was happening in terms of the pandemic and things were normal. And so, based on how the virus is behaving in various places and that's when all the shelter-in-place orders were yet in place. And so where there weren't shelter-in-place orders, we were still seeing a lot of walk in traffic.

So that's one of my comments where I mentioned, as we geographically see the Company implement the plan of reopening America and stay in place orders taken out in certain places, we think we'll probably see earlier pickups in velocity than where those orders are staying in place longer.

Jeffery Spector -- Bank of America/Merrill Lynch -- Analyst

Okay. Thank you. And then my last question on a positive note, the -- as you mentioned 1Q results very strong you just mentioned all facets exceeded expectations. Let's think of hopefully a normalized world in the coming ones. Can you just talk a little bit more about the different facets and what attributed to the beats and what was working right before all of this started?

Daniel Perry -- Executive Vice President, Chief Financial Officer, Treasurer

Yeah, Jeff, this is Daniel. Really, as we talked about across the board, we had seen good controls. When you look at, certainly in the areas of marketing, you've heard us talk -- we were down 10.6% year-over-year in marketing. We have talked about that we are in the process of transitioning from primarily a traditional marketing medium to really a much greater percentage of our marketing being done via social media marketing, and online marketing. We are seeing good progress with weaning off those traditional methods which tend to be more expensive and we can be more direct with the social and digital and online mediums.

And so we would expect to continue to benefit from that. Obviously, we are going to start seeing just some benefit because for this period of time where students are not on campus. We're not doing on-campus promotional events and things like that that we will use in the future. And so some of that will come back. Repairs and maintenance, continuing to try and create efficiencies there with our national purchasing contracts and some of the asset management initiatives we have done with the finishes at the properties to bring down those expenses.

On the utilities management front, we continue to see real benefits from our LED initiatives, our peak billing hour usage initiatives. And so really across the board, we're continuing to see great returns on all of the asset management initiatives that we've deployed across the portfolio. I thought it was really important to communicate that during the first quarter it was each and every month and each line item, other than insurance that we outperformed our budget and obviously for the first two-and-a-half months of the quarter, there was really pretty much nothing related to COVID-19 going on.

Jeffery Spector -- Bank of America/Merrill Lynch -- Analyst

Thank you. Yes.

Bill Bayless -- Chief Executive Officer & Director

The other thing we would point out is that business has continued as usual in the other areas of our business. Jamie Wilhelm and his team continue to do presentations to universities now they are on various video call methodologies. As William said we signed the pre-development agreement with MIT right in the midst of all this. And so schools are continuing to strategically move forward on all the initiatives that they had in place. We're just accomplishing it in different ways now.

Jeffery Spector -- Bank of America/Merrill Lynch -- Analyst

Great. Thank you. I wish the ACC team well, thank you.

Daniel Perry -- Executive Vice President, Chief Financial Officer, Treasurer

Thanks, Jeff.

Bill Bayless -- Chief Executive Officer & Director

Thank you, and yours.

Operator

Our next question will come from Drew Babin with Baird. Please go ahead.

Drew Babin -- Robert W. Baird & Co. -- Analyst

Hey, good morning.

Bill Bayless -- Chief Executive Officer & Director

Good morning.

Drew Babin -- Robert W. Baird & Co. -- Analyst

Couple of silverlining type [Phonetic] questions here, obviously competitive new supply has been -- has just come into the fray the last few years, especially kind of in the later stages of lease-up maybe using Austin as an examples of a market where you're going to see a decent amount of competition this year, do you view this event is something that makes it highly unlikely that a lot of the competitive private developments might actually deliver this year. Most of them getting kind of pushed out create an opportunity where everybody knows ACC is going to be open, the facilities are going to be there for them. Is that something that's helping you or something that you can leverage?

Bill Bayless -- Chief Executive Officer & Director

Well, we would say when you look at our leasing velocity being 3,200 beds ahead prior to the crisis, we had talked on the last earnings call that supply is down this year and it was a much more favorable supply delivery pipeline being smaller. And so, we believe we were seeing that benefit even before the crisis. And so as we look at what the impacts of the crisis may be as it relates to supply delivery or the next couple of years supply, that's likely a market dynamic that is probably going to continue to work in our favor beyond this crisis.

Drew Babin -- Robert W. Baird & Co. -- Analyst

Okay. And related to that, to the extent there is ACE relationships where university might not open on-campus in the fall, therefore students are not going to be there in the on-campus facilities in that event, might it be possible that ground rent forgiveness might be some kind of an offset to that or is that something that's been talked about with the universities?

Bill Bayless -- Chief Executive Officer & Director

If we ended up in a situation where that occurs. And again, our first premise of activity would be as I just mentioned in answering the last question, even where -- we have students today living in our facilities at ASU and living in some of their non-ACC facilities while they're delivering classes online. And so even under the perspective that classes are online in the fall, we do believe, our belief at this point in time is that university still will open some portion of on-campus housing for the students that want to be there. And we're very well positioned to that our newer modern products will be the products that allow them to achieve the CDC guidelines of social distancing.

So, even in that arena, we think that's possible. If we did end up in a worst-case scenario where our transactions were not occupied in the fall, certainly, we would have those discussions with universities at that point in time. The one thing, and again, we couldn't be -- the partnerships that we have with our university partners everything that we have done throughout this crisis has been in hand in hand, acting in good faith and thinking about what is important to the other side of the table at all times. And so it's something that our relationships are only stronger coming out of this then they were going in.

Drew Babin -- Robert W. Baird & Co. -- Analyst

Okay. Good to know. And one question for you, Daniel, on the balance sheet front. In talking to your creditors, to the extent that there is some kind of temporary reduction in EBITDA resulting from this. Are there any covenants that kind of come into play where you may be having to have some discussions about just covenant relief in the interim here and I guess in a situation where if a fall is severely impacted would additional asset sales be potentially something you look at, to keep leverage down in that type of scenario where does that stand right now in those discussions.

Daniel Perry -- Executive Vice President, Chief Financial Officer, Treasurer

Yeah. So, with regards to creditors, obviously, we have very little secured debt on our properties, right now only about 8% of total debt is secured debt. I think we're down to maybe less than 15 properties that have mortgage debt on and maybe less than 12. And in many cases, you're not reporting on covenants, but rather ratios just as part of a reporting standard for those mortgage loans. The primary covenants we would be looking at will be with regards to our corporate credit facility and our revolver.

The one that is when we do stress testing on it that we would be the closest on would be our debt to total assets for our revolving credit facility that is based on a trailing 12-month EBITDA or NOI that is capped up. And we have about $170 million of room that we could lose within a 12-month period of NOI before we would get close to that.

As you heard me answering a question earlier, I said that if we came down to about 60% occupancy, that would lead to about $130 million of lost revenue if that played out through the entire fall semester, if you put that together with the refunds and things that are occurring right now that would get you close to that $170 million. But of course that doesn't take into consideration the potential mitigation. We will have through reduced expenses. And as you can imagine if we were in that kind of a scenario in the fall, we would be looking to more extensive expense efficiencies that we can drive as part of a different environment for the fall than what we're currently anticipating.

Drew Babin -- Robert W. Baird & Co. -- Analyst

Okay. Now I appreciate you framing that out. That's all from me. Thank you.

Daniel Perry -- Executive Vice President, Chief Financial Officer, Treasurer

Sure. Thanks.

Operator

Our next question will come from Steve Sakwa with Evercore ISI. Please go ahead.

Steve Sakwa -- Evercore ISI -- Analyst

Thanks. Most of my questions have been asked. But just one quick one and just as it relates to kind of accounting, for the -- I guess, the students that are requesting rent relief and there is deferral, are you still sort of booking those as GAAP revenue in the quarter, say, for Q2? And then, if those students don't pay or there is bad debt and you sort of take the write-off down the road or how does that get handled?

Kim K. Voss -- Executive Vice President, Chief Accounting Officer

Hi, Steve. This is Kim Voss. Yes, the intent from an accounting standpoint is that you would see that reduction in revenue and the intent is that all of that would be taken in the months that those abatements are provided. The accounting rule makers have provided some recent relief to make that more straightforward for companies and allow them to take that hit per se to revenue all in the periods that those abatements are provided rather than smoothing it out over the term of the lease. So that's our intent.

Steve Sakwa -- Evercore ISI -- Analyst

Okay. So, basically it's going to be on a cash collection basis not sort of a kind of a gap smoothing basis.

Kim K. Voss -- Executive Vice President, Chief Accounting Officer

As abatements are provided, you'll see those abatements hit on a dollar for dollar basis. But one of the things we'll also continue to look at very closely as we monitor collection is just the ongoing impact that that will have on our provision for uncollectible accounts which always isn't necessarily a cash for cash analysis, but something that we look at you know on a broader scale in terms of how much do we ultimately think we're going to collect for potentially those residents that are under payment plans and things of that sort. So, it's a little bit of a mixed bag between the direct effect of the abatements as well as the ongoing assessment for bad debt over a period of time.

Steve Sakwa -- Evercore ISI -- Analyst

Okay. Thanks very much. Appreciate all the details.

Operator

Our next question will come from Derek Johnston with Deutsche Bank. Please go ahead.

Derek Johnston -- Deutsche Bank -- Analyst

Good morning, everybody. Hi. We've read about a wide variety of options when college does resume and clearly not necessarily a complete return to normalcy right away. One option that we've heard contemplated is one student per dorm room, do you think this is at all possible and how impactful would it be on ACC as you guys at lease by bed?

Bill Bayless -- Chief Executive Officer & Director

Yeah. And it will vary for, and again, many universities as we mentioned in their older products that have much higher densities in common facilities that one student per dorm room is a much better option. And then ultimately what they're attempting to do is, probably get their number of people sharing a common bathing facility down to an acceptable less than 10 and per the CDC standards. We're very well positioned in that in our modern products.

Again, and that typically the way our units are designed are never more than two people per room and with one either only more than two -- never more than two-sharing the in-unit bed. And so we tend to be better suited for that than many of the older products, but we would expect, again, in different geographic regions for universities to be very creative in terms of based on what their inventory is how to maximize the use of it, while complying with the CDC guidelines.

Derek Johnston -- Deutsche Bank -- Analyst

Okay, great. And just secondly, so The Varsity was sold at a very healthy 4.1 cap on $320 million [Phonetic], but clearly that was post the negotiated price. And as you move toward closing, was there a push back on pricing during COVID's acceleration? How did that deal progress throughout this time?

And secondly, have the private transaction markets adjusted meaningfully since the papering of this transaction, and going forward, do you expect any additional dispositions in 2020 at this time?

William W. Talbot -- Executive Vice President, Chief Investment Officer

Hey, this is William. You know throughout the whole process and as this crisis was emerging, it was fairly business as usual with the disposition, the buyers being grey star. The transaction actually ended up closing a little sooner as the crisis emerge. They wanted to get it done just with the uncertainty. So, we actually saw a little bit of an acceleration of the final timing of that transaction closing. When you step back now and look at the overall transaction market for student housing, it's certainly taking a temporary pause and as people are evaluating all the different circumstances, obviously a lot of people looking to what the decisions are related to fall. So, you really have seen that transaction market step back and waiting I think more clarity for the future. And then the final question you asked, there are no more planned dispositions at this time for 2020 calendar year.

Bill Bayless -- Chief Executive Officer & Director

Unless someone does offer a 4 cap and then we may reconsider it.

Derek Johnston -- Deutsche Bank -- Analyst

Thanks everyone.

Operator

Our next question will come from Anthony Paolone with J.P. Morgan. Please go ahead.

Anthony Paolone -- J.P. Morgan -- Analyst

Thank you. I guess, one thing I've [Phonetic] asked is, going back to, I think one of the original questions actually if schemes have the option to start the next school year online and they don't show up and they pre-leased, and they don't take possession, what do you do, do you all -- are you taking larger deposits as you approach, say, August, September to show that there is some skin in the game or how's that work?

Bill Bayless -- Chief Executive Officer & Director

No, we certainly won't increase any depositor fees throughout this crisis. Just as a -- that would be not something in the spirit of doing the right thing that we would consider doing. One, we will have dialog throughout the entire summer with those students and we certainly won't wait and to see that whether not someone shows up. As I said earlier, even though you have a signed contract for the fall, it is very difficult to make any argument to collect rent via normal and ordinary processes for someone that never took possession of the unit.

As I mentioned, at this point in time we have had our typical volume of people requesting to cancel for fall is better than the prior year. And so we have not yet had any students that are looking to cancel those leases. And so that's the dialog that we will continue to have. Again, Tony, I think a lot of it will, to the extent that you have situations of that nature evolved, it's going to be regional situations where maybe you have a ramp up of the virus in one location and students behave differently. I mean, those are the things that we'll just have to deal with throughout this process. And again, we'll just keep being transparent with you all as it comes into play.

We do believe there is going to be a return to normalcy. Will it be with the commencement of this fall's classes, we'd love that, that's what we hope for, but we just won't know until we get through this process and we see how the virus plays out geographically and how it occurs. As I mentioned what we are going to be doing is having dialog with the students that have signed those leases just like you said, to talk about what the benefits are of -- and right now as I mentioned, we estimate that -- we're anywhere from 30% to 100% occupied right now in the spring semester, while students are taking classes online.

And so we don't believe it's a toggle of if the university goes online, we're going to have any residents or if the university does go online, we're back to normal. The reality is that's the kids still want to be -- students don't want to be in their college towns in many cases. And so this is one of the uncertainties that we're going to work through to try to create as much stability regardless of the online or in person classroom decision and that we will manage through this process.

We certainly believe right now as I mentioned in my comments for those universities that may find themselves having to remain online and then January becomes that point of normalcy from a classroom instruction perspective. That doesn't mean that all those students don't want to come to class till January. And so that's what we'll just have to manage through and part of the uncertainty of this is something we feel good about based on the current consumer trends we're seeing in terms of request for cancellation and continuing to lease.

Anthony Paolone -- J.P. Morgan -- Analyst

Okay. So, again, thank you.

Bill Bayless -- Chief Executive Officer & Director

Thank you, Tony.

Operator

And our final question will come from Nicholas Joseph with Citi. Please go ahead.

Michael Bilerman -- Citi -- Analyst

Hi. Great. It's Michael Bilerman here with Nick. So, I was wondering how you're thinking about any potential legal liability from the standpoint of, if you do open your facilities to a greater extent in the fall and the virus is still around in some form and it occurs at your assets. I don't know if you've built things into your leases or how do you absolve sort of the Company to manage any potential liability from that from residents contracting the virus at your assets?

Bill Bayless -- Chief Executive Officer & Director

Yeah. And certainly and this is something for all residential real estate in terms of anyone that owns real estate and whether or not viruses -- same thing for workplaces as you think about that. And so, there is not specific language in our leases nor I believe in anyone's leases that directly correlate to that situation. The only thing that we can do is what every company in America is doing in all of the services they provide, and that is implementing the government CDC guidelines and following them as it relates to the items that we can control with regard to sanitation and the like.

The other thing that I did mentioned, Michael, where we take appropriate precautions and our leases do allow us to do this. In our resident leases, we do not guarantee that all of the common amenities are open. And so that's where I've mentioned we have closed down gyms, swimming pools, recreation rooms and facilities to where it is largely ingress and egress to your unit and out, no different than traditional multifamily.

Michael Bilerman -- Citi -- Analyst

Right. How do you -- with most of the offices -- office tenants, they're only going back and it's still a ways away to maybe 50% occupancy, I guess, and I know every state and every city is going to be a little bit different, but how do you even obtain and I do view this period of time where students were already at school and you have gone to distance learning very different than whether school opens up in the fall or not, right. I don't think you can just take what's happening today in terms of students just staying on-site versus a new school year starting. But how do you ensure a certain amount of proper distancing from an occupancy perspective overall.

Bill Bayless -- Chief Executive Officer & Director

Yeah. Proper distancing within a unit, the people that you are -- typically there's four people living in a unit and those four people are going to be -- they are currently living together and they're going to be exposed to each other and they're signing their leases and moving in with the understanding of they know who they are living with. In the rare cases of that we have had occur of COVID-19 on property and a student has gotten it, in some cases all of the roommates have quarantined with that person, because they were exposed and so they stayed together throughout that crisis with people bringing groceries and dropping into the door and the like.

The other thing that -- I think back, Michael, when we visited with you all in early March at your conference and at that point in time when we talked about managing COVID-19, it was very much solely around none of us contemplated the level to which the government actions would take place. It was around managing when people were infected by the virus and how we handle that. And that's where universities and then as we talked about then, our plan and what we did do in all those cases, we immediately worked with the university, we immediately worked with the local health department and follow the quarantine procedures to isolate and do that. Universities, as they talk about fall are talking about may be keeping certain facilities offline, let's say those older traditional residence halls that are more difficult for any cases of COVID-19 that occur in the market to assist people in isolating the students as it occurs.

And so it will be geared more toward the management of those incidents when and if they occur, but I mean certainly it is -- there is nothing that we can do to -- attorneys will be attorneys. And so certainly we are comfortable with how our leases are constructed and what the decisions that students make as residents and we make as landlord, that is what it is.

Michael Bilerman -- Citi -- Analyst

And how do you think about, you talked a little bit about how the dorm product on university campus relative to your modern built product, have you found any universities willing to master leased a certain number of your beds to offset their occupancy and their needs for social distancing? And what percentage of the portfolio could that entail effectively a university master leasing a certain portion of your beds?

Bill Bayless -- Chief Executive Officer & Director

Yeah, that's something and William and his team that is their primary focus that we mentioned in the next 30 to 60 days as those conversations are taking place. And that -- and right now, a lot of the ACE portfolio, not a lot, but a portion of the ACE portfolio right now is already master leased by universities. And so that is something that we do think as possible, not just for our ACE partners but for where we serve universities off-campus. And so, it's certainly a possibility, Michael, that we think is I can't quantify it at this point in time. But we are having those conversations with institutions

Michael Bilerman -- Citi -- Analyst

Right. Yeah, I'm thinking more about your off-campus product in the university basically coming in and securing those beds. It doesn't sound like anything has been negotiated yet after that [Phonetic].

Bill Bayless -- Chief Executive Officer & Director

Has not been negotiated yet, again, they and us have just made our way through managing the early part of this crisis. But now with most universities that formed their reopening task forces. And so it's again working in concert with them to have those discussions and those conversations. I also and certainly where the universities I think immediately are going to look to off-campus housing. This may provide also some alternative and hope again for multi-family and hotels that are right next to campus as universities look at exhausting off-campus housing and moving to the next step there if needed.

Michael Bilerman -- Citi -- Analyst

Okay. Thanks for the time.

Bill Bayless -- Chief Executive Officer & Director

You got it.

Operator

This will conclude today's question-and-answer session. And I would like to turn it over to management for any closing remarks.

Bill Bayless -- Chief Executive Officer & Director

Again, we would like to thank all of you for taking the time today. I know this was a long call and our remarks were especially long but we wanted to be as thorough and comprehensive as we could and helping you all understand the thought processes and the values that we are holding dear as we go through this crisis. Certainly, we nor any company is isolated from the short-term financial impact associated with this crisis as you have seen and we would expect to continue while the crisis is here.

We do believe, however, there will be a moment in time whether it is the fall term or whether is the spring term where we will have a return to normalcy. And as we stated, we believe in coming out of that crisis, we will return to the position we have in the market and the report that we have in the market with our partners and will be the same investment thesis that we have had for the long term of being a company that is recession, resilient and also offers great stability of cash flows.

We will keep you up to speed as things emerge, our next earnings call, of course, is toward the end of July. And at that point in time, we'll have much greater color as it relates to the decisions universities have made with regard to online education versus in-resident and we'll be much further along in our pre-leasing. We want to thank again our employees and our residents and their families in being patient and understanding as we all work through this together. Thank you so much.

Operator

[Operator Closing Remarks]

Duration: 103 minutes

Call participants:

Ryan Dennison -- Senior Vice President, Capital Markets and Investor Relations

Bill Bayless -- Chief Executive Officer & Director

Jennifer Beese -- Executive Vice President, Chief Operating Officer

William W. Talbot -- Executive Vice President, Chief Investment Officer

Daniel Perry -- Executive Vice President, Chief Financial Officer, Treasurer

Kim K. Voss -- Executive Vice President, Chief Accounting Officer

Alexander Goldfarb -- Piper Sandler -- Analyst

Nicholas Joseph -- Citi -- Analyst

Neil Malkin -- Capital One Securities -- Analyst

Austin Wurschmidt -- KeyBanc -- Analyst

Jeffery Spector -- Bank of America/Merrill Lynch -- Analyst

Drew Babin -- Robert W. Baird & Co. -- Analyst

Steve Sakwa -- Evercore ISI -- Analyst

Derek Johnston -- Deutsche Bank -- Analyst

Anthony Paolone -- J.P. Morgan -- Analyst

Michael Bilerman -- Citi -- Analyst

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