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EdR Announces Year-end Acquisition And Disposition Activity

EdR (NYSE:EDR), one of the nation’s largest developers, owners and managers of collegiate housing, today announced several recent closings and transactions in November and December 2012.
  • EdR completed the previously announced purchase of two communities adjacent to Texas Tech University in Lubbock, Texas for $74 million with cash-on-hand and the assumption of two fixed-rate mortgage loans totaling $48.5 million.
  • The company purchased The Province, a purpose-built collegiate community adjacent to Kent State University, for $45 million in cash.
  • EdR closed on the sale of The Reserve at Star Pass — a 1,020-bed collegiate housing community 4.5 miles from the University of Arizona —for $25.5 million. These proceeds were utilized to reduce borrowings under the Company’s unsecured line of credit.
  • EdR acquired the ground lease encumbering its 74% owned asset, University Towers — a 953-bed collegiate community adjacent to North Carolina State University in Raleigh, N.C. The $7.5 million purchase price included an attached 454-space parking deck.

“We continue to improve our portfolio by adding high-quality, accretive assets in strong, growing markets while also selectively recycling capital out of assets that no longer meet our return criteria,” said Randy Churchey, EdR’s president and chief executive officer. “With a robust pipeline, low leverage and the consistent execution of our positioning strategy, we continue to grow value for our company and our shareholders.”

Additional Information on the Two Community Acquisitions

Texas Tech University — The Centre at Overton Park and The Suites at Overton Park include 866 beds within 576 units in a variety of unfurnished one-, two-, three- and four-bedroom styles each with private bedrooms and baths. Constructed in 2005 and 2009, respectively, amenities include a controlled-access parking structure with 1,227 spaces, fitness center, study rooms and a computer lab.

The properties currently are leased to both students and non-students, with an expected economic occupancy of 88% over the next twelve months and an average monthly rental rate of $1,103 per unit. EdR will transition the property to primarily student residents over the next few years. Based on this and other information, EdR’s purchase price represents an approximate 5.5% economic cap rate in Year 1 and 6.3% in Year 2.

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