The stock of the Austin, Texas-based real estate investment trust rose $1.02, or 6 percent, to $18.14 in midday trading.

The REIT said late Tuesday that funds from operations, or FFO, rose to $16.8 million, or 34 cents per share, in the fourth quarter, from $14.4 million, or 44 cents per share. Per-share results declined year over year because weighted shares outstanding rose by more than 50 percent.

On average, analysts polled by Thomson Reuters expected quarterly FFO of 33 cents per share.

Funds from operations, or FFO, which adds such items as amortization and depreciation back to net income, is considered a key measure of strength for REITs because it provides a more accurate picture of cash performance.

For the year, American Campus recorded FFO of $44.8 million, or $1.12, per share, up from $28.4 million, or $1 per share, in 2007.

The company also offered 2009 FFO guidance of $1.59 per share to $1.77 per share. Analysts are expecting FFO of $1.54 per share.

Robert W. Baird & Co. analyst Paula Poskon reiterated her "Outperform" rating on the shares in a research note Wednesday.

Poskon said that student housing revenue isn't affected as much by economic conditions as apartments, so more investors may consider the sector as the economy deteriorates.

Specifically, Poskon said that American Campus' operating margins have topped its peers and its performance as a public company has been more consistent. Additionally, its development pipeline offers more opportunities for growth, she said.