EdR Sees Q2 Net Income Rise

By Sarah Baker

EdR’s second quarter was marked by improvements in same-community net operating income, operating profits of new communities and lower interest expense, the Memphis-based collegiate housing REIT reported in its Thursday, July 26, conference call.

EdR reported a net income of $1.3 million for the three months ended June 30, compared to $0.6 million during the same period in 2011.

“All lines of business continued to grow in the first half of 2012,” EdR president and CEO Randy Churchey said in a statement. “We are adding $362 million of owned and participating development communities this fall and next, and our pipeline of acquisitions and new developments are at all-time highs. Operationally, we achieved another quarter of double-digit same-community NOI growth, commenced three new third-party development projects and signed two new third-party management agreements.”

Total revenue saw a 23 percent jump year over year, reaching $36 million in Q2 compared to $29 million in Q2 2011.

EdR’s core funds from operations was $11.6 million for the second quarter, compared to $8.4 million in the prior year.

During Q2, EdR was awarded a new third-party development project at Clarion University of Pennsylvania. With a project total cost of $44.7 million, the 700-bed community is scheduled to be delivered in the summer of 2014.

EdR also reported that construction on New Central Residence Hall, the first building in a multi-phase project aimed at revitalizing University of Kentucky’s on-campus housing, is progressing as planned. The 601-bed, two-building, four-story community will be available for occupancy in the summer of 2013.

EdR expects its total investment of about $152 million in projects to continue to progress on schedule and on budget. It also has six developments planned for 2013 totaling $210 million that are proceeding as anticipated.

“We are on pace to successfully deliver ten developments in 2012 and 2013, a record for EdR,” said Tom Trubiana, EdR’s executive vice president and chief investment officer. “In addition, the volume of new opportunities that are in our pipeline should allow us to maintain or increase our pace of activity going forward.”

The company’s same-community portfolio is currently 83.9 percent preleased for the 2012/2013 lease term, compared to 86.1 percent at this time last year. EdR anticipates net rental rates for the 2012/2013 lease term to be 5 percent ahead of the prior lease term.