VOL. 127 | NO. 211 | Monday, October 29, 2012
EdR’s Net Income Rises in Third Quarter
By Sarah Baker
EdR reported a net income of $489,000 in the third quarter, the Memphis-based collegiate housing real estate investment trust reported after market close Thursday, Oct. 25.
That compared to a $6.5 million loss during 2011’s third quarter. EdR attributed its year-over-year net increase to improvements in same-community net operating income, operating profits of new communities, lower interest expense and a $5.2 million gain on sale of assets in 2012.
“The transformation of our portfolio of communities continues to evolve as we further work to position EdR to outperform in this growing industry,” EdR president and CEO Randy Churchey said in a statement. “We have sold 35 percent of the communities that were in our portfolio at the beginning of 2010 and since that time we have also added $468 million of acquisitions and $91 million of developments to our portfolio.
“In addition, we announced $343 million of developments delivering in 2013 and 2014. The culmination of these transactions has reduced our median distance from campus to 0.2 miles from 1.3 miles, increased our average rental rate by 20 percent to $562 per bed and continues us along the path of adding well-located quality assets to our portfolio.”
Total revenue saw a 23.6 percent jump year over year, reaching $35 million in Q3 compared to $28 million in Q3 2011.
EdR’s core funds from operations was $5.9 million for the three months ended Sept. 30, compared to $2.4 million during the same period last year.
During Q3, EdR signed agreements with the University of Kentucky for Phase II of the multi-year, 9,000-bed, campus-housing revitalization project. Phase II includes four communities with 2,317 beds and total estimated project costs of $133.7 million. These communities are scheduled to open summer of 2014.
Meanwhile, EdR acquired three communities with a total of 1,847 beds and a combined purchase price of $137.3 million. The company also closed on the sale of two communities, NorthPointe serving University of Arizona and The Reserve on Frankford serving Texas Tech University, for a gross sales price and net cash proceeds of approximately $42.3 million.
EdR is in the process of assuming $49.5 million of debt related to the $74.8 million acquisition of two communities adjacent to Texas Tech with a total of 866 beds. The assumption process and closing of the acquisition is expected to be completed in the fourth quarter.
Tom Trubiana, EdR’s executive vice president and chief investment officer, said the company is pleased with the progress of its development projects.
“We opened four owned and participating development communities a couple of months ago, are on pace to successfully deliver five developments in 2013 and have announced over $153.5 million of anticipated development deliveries for 2014,” Trubiana said. “In addition, the volume of new opportunities that are in our pipeline should allow us to maintain our pace of activity for the foreseeable future.”
Same-community opening occupancy for the 2012-2013 lease term was 90.5 percent, compared to 94.7 percent for the 2011-2012 lease term. Net rental rates for the 2012-2013 lease term increased 5.1 percent over the prior lease term.