EdR Net Income Improves in Fourth Quarter

By Sarah Baker

EdR reported a net income of $4.8 million in the fourth quarter, compared to a $5.8 million loss during 2011’s fourth quarter.

The Memphis-based collegiate housing real estate investment trust attributed its year-over-year net increase to operating profits from new communities, a $7.9 million loss on sale of assets in 2011 and lower interest expense.

Randy Churchey, EdR president and CEO, said in a Tuesday, Feb. 19, conference call with shareholders that the company had a misstep with the finish to the fall 2012 leasing campaign. Consensus industry same-store revenue increases ranged from flat to less than 3 percent, while EdR ended at a same-store revenue increase of 1 percent.

“After two consecutive years of industry-leading increases in same-store revenue, this finish was humbling and disappointing,” Churchey said. “But we’ve learned from this experience and believe we will perform better this fall.”

“We continue to find and convert attractive investment opportunities that meet our criteria.”

–Tom Trubiana
Executive vice president, EdR

Total revenues for the three months ended Dec. 31, were $43 million, compared to $32.7 million for the same period in 2011.

EdR’s core funds from operations for the quarter were $18.1 million, up $5.5 million from the prior year. EdR said that improvement reflects an increase in operating profits from new communities and lower interest expense.

Same-community net operating income for the quarter decreased 2.7 percent on flat revenue and a 3.3 percent increase in operating expenses. For the full year, same-community net operating income increased 5.7 percent.

Among EdR’s quarter highlights were that it commenced construction on Phase II of the $133.7 million “on-campus revitalization” at the University of Kentucky, a delivery of 2,317 beds in the spring of 2014.

Also in the quarter, EdR acquired five communities with a total of 2,581 beds for $206.3 million.

Since year-end, EdR entered into a 50/50 joint venture to develop an $89.2 million, 901-bed community within two blocks of the University of Minnesota. EdR will manage the community when it opens in the summer of 2014.

In total, EdR has $442.3 million of potential new assets under contract or in development for delivery in 2013 and 2014.

“We continue to find and convert attractive investment opportunities that meet our quality, location and return criteria,” Tom Trubiana, EdR’s executive vice president and chief investment officer, said in a statement.