Education Realty Trust, Inc. (NYSE:EDR)

CAPS Rating: 3 out of 5

A self-managed and self-advised REIT engaged in the ownership, acquisition and management of quality student housing communities. It also provides student housing development consulting services to universities, charitable foundations and others.

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Member Avatar TMFCavalier (56.86) Submitted: 10/8/2014 1:12:01 PM : Outperform Start Price: $10.36 EDR Score: +5.88

Business in One Sentence
REIT focused on developing, acquiring, owning, and managing collegiate housing communities located near university campuses.

Value Proposition
- Communities are nice and in prime locations (either on-campus or extremely close to campus).
- Median and average distance to campus of 0.1 miles and 0.5 miles, respectively

Company Strategy and Advantage
Strategy:
- Acquire collegiate housing communities nationwide and selectively develop owned properties
- Focuses on high quality institutions with large enrollment bases
- 70% of properties in national top 150 schools – average university in EDR market has 1.8x applicant to admittance ratio
- Avg. full-time enrollment of 27,401 students
- Build third-party business of management services and development consulting services (e.g. University of North Carolina, University of Michigan, University of Louisville)
- Maximize net operating income from the operation of owned properties through proactive and goal-oriented property management strategies
- On-Campus Equity Plan (ONE Plan) – private equity program for universities, which allows universities to use EDR’s equity and financial stability to develop and revitalize campus housing while preserving their credit capacity for other campus projects. EDR is the service and equity provider for the university – helping to simplify the process.
- Developed, owns, and manages two on-campus housing communities at Syracuse University
- Developed, owns, and manages on-campus high-rise apartment for University of Texas
- Selected to develop, own, and manage multi-phase/multi-community project at the University of Kentucky
- Upcoming projects with University of Connecticut and University of Colorado

Competitive Advantage:
- Geography of student housing very important – limited space available close to campuses and EDR has communities in highly desirable/convenient locations
- Proven on-campus development and management expertise makes universities more likely to work with EDR
- Thomas Trubiana – EVP & CIO has over 30 years in the collegiate housing business

Other Business Details
- Own 49 collegiate housing communities located in 23 states containing 27,982 beds in 9,933 apartment units on or near 41 university campuses
- Manage 22 collegiate housing communities located in 10 states containing 11,722 beds in 3,777 apartment units on or near 18 university campuses
   Nearly all properties are under 12 month leases - student and parental guarantor on lease
- 4.4x interest coverage / Net debt to adj. EBITDA: 5.6x
- Debt to Gross Asset: 33% (variable rate debt 33% of total debt)
- 66% of assets unencumbered assets
- 94% occupancy rate in 2013

Risks
- Specific risk to enrollment rates at universities
- Major shifts in U.S. higher education
- To maintain REIT status, EDR may be forced to limit the activities of Management Company and Development Company

Big Few
- How much are students/parents willing to pay for housing? Some of these units/communities are sweet (pools, lounge areas, rec areas, etc.)
- How much competition is there in general for these prime location communities? Some campuses/towns are more accommodating than others.
- How large does EDR think the development/managing business can be? Possible spin-off?

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Member Avatar outinthesnow (50.24) Submitted: 12/27/2013 1:12:08 AM : Outperform Start Price: $8.51 EDR Score: +23.92

Back to safe growth

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Member Avatar davidebuell (58.94) Submitted: 8/23/2012 1:24:50 PM : Outperform Start Price: $10.31 EDR Score: -31.91

With challenging budget conditions at many large public universities, public student housing REITs will be able to take advantage to grow. In addition, the Company's expertise with managing will allow the Company to increase operating income.

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Member Avatar hugh89 (40.50) Submitted: 5/16/2010 7:30:29 AM : Outperform Start Price: $5.92 EDR Score: +15.74

Heavy debt. However, before it went freefall in 2008, average for this stock was $11-13 range+. Believe they have potential to regain their former range, as college ranks swell once more due to economic recovery, allowing anyone who buys in now to double their money

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Member Avatar egassam (44.01) Submitted: 4/17/2007 11:14:32 PM : Outperform Start Price: $10.31 EDR Score: -33.79

Owns lots of great property

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Member Avatar mart2240 (< 20) Submitted: 11/8/2006 2:47:10 PM : Outperform Start Price: $9.85 EDR Score: -37.61

The Stock still gives a high Dividend

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Member Avatar ria12 (< 20) Submitted: 10/25/2006 12:10:09 PM : Outperform Start Price: $10.56 EDR Score: -45.93

With more and more people going back to school for second and third degrees, the need for good housing near the universities is going to grow in the coming years.

Results 1 - 7 of 7

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