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VOL. 127 | NO. 84 | Monday, April 30, 2012

EdR Doubles Q1 Net Income

By Sarah Baker

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EdR more than doubled its first-quarter net income year over year, results the Memphis-based collegiate housing REIT attributes to strong 2012 pre-leasing to date.

EdR reported a first-quarter net income of $1.9 million compared to $0.7 million for the first quarter of 2011.

Analysts were offered those totals during EdR’s Q1 conference call Thursday, April 26, after market close.

“The collegiate housing industry continues to produce year-over-year increases in profitability and favorable supply and demand fundamentals,” said EdR president and CEO Randy Churchey. “Demand continues to be stable, at an increase of approximately 1 percent per year, and this is expected to continue through 2019.”

Churchey said EdR delivered an 11 percent increase in same-community net operating income and is on pace for a solid 2012/2013 lease opening, with a projected 4 percent increase in net rental rate.

Total revenue saw a 23.6 percent jump year over year, reaching $37.9 million in Q1 compared to $30.6 million in Q1 2011.

EdR’s net operating income was $19.5 million for the quarter, up 35.2 percent – or $5.1 million – from Q1 2011.

Core funds from operations for the three months ended March 31 was $12.6 million, a 34 percent increase from $9.4 million during the same period in 2011.

During Q1, EdR broke ground on New Central Residence Hall, the first building in a multi-phase project aimed at revitalizing University of Kentucky’s on-campus housing. The two-building, four-story community will be available for occupancy in fall 2013.

UK and EdR are currently in discussions regarding Phase II, during which EdR will assume management of the university’s 6,000-bed housing portfolio and systematically replace and expand to some 9,000 beds within the next five to seven years.

“We view this public-private partnership with the University of Kentucky as a watershed event,” Churchey said. “We believe other universities will look to this type of partnership to replace existing housing stock.”

In support of Phase II, the Kentucky Legislature authorized an additional $175 million for the on-campus partnership, with expected deliveries in 2014 and 2015. This amount is in addition to the previously approved $52 million.

This $25.8 million project is being financed through EdR’s On-Campus Equity Plan – the ONE Plan – which uses the company’s equity to fund projects on university-owned land. This gives the university access to a single partner.

Meanwhile, EdR entered into agreements to develop, own and manage a 609-bed, $52 million community near the Biomedical Campus of Arizona State University in Downtown Phoenix.

Also during the quarter, EdR awarded new third-party development projects at East Stroudsburg and Mansfield universities in Pennsylvania. Both represent second phases and have a combined estimated project cost of $90 million and anticipated deliveries of 2013 or 2014.

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RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 50 299 14,717
MORTGAGES 59 436 19,330
FORECLOSURE NOTICES 14 91 3,796
BUILDING PERMITS 135 697 35,330
BANKRUPTCIES 58 306 14,034
BUSINESS LICENSES 22 87 5,013
UTILITY CONNECTIONS 121 483 21,433
MARRIAGE LICENSES 22 104 4,557

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