Acquiring at Texas Christian University and the University of Notre Dame
Developing at the University of Colorado Boulder
Education Realty Trust Inc. (NYSE: EDR), one of the nation's largest developers, owners and managers of collegiate housing, today announced two acquisitions and one collegiate housing development.
"We are pleased to announce these transactions for collegiate housing communities at three prominent institutions, Texas Christian University, Notre Dame, and University of Colorado Boulder," stated Randy Churchey, Education Realty Trust's president and chief executive officer. "We continue to successfully execute on our business plan of purchasing well-located assets on or adjacent to robust universities which are intended to meet the growing demand for collegiate student housing and provide value to our shareholders."
The company is purchasing a leasehold interest in GrandMarc at Westberry Place, a collegiate housing community on the Texas Christian University (TCU) campus located in Fort Worth, Texas as previously disclosed in company filings for $54.7 million. The property, subject to a 53-year ground lease with TCU, will be purchased with cash on hand and the assumption of a $37.1 million variable-interest rate mortgage. The transaction is expected to close in mid-November 2011.
The GrandMarc is considered by TCU to be located on campus and, therefore, it is available to meet TCU's requirement that students live on campus their first four semesters.
Built in 2006, GrandMarc at Westberry Place is a mixed-use apartment community including 644 beds within 244 units in a variety of furnished one-, two-, three- and four-bedroom styles and 625-space, controlled-access parking structure. The property is 97.8% leased for the 2011-2012 academic year and has an average monthly rental rate of $842 per bed. The ground floor provides nearly 30,000 square feet of retail, which is 100% leased to a variety of shops, service providers, restaurants and TCU. Based on this leasing and other information, EDR's purchase price represents a 6.8% economic cap rate on expected next 12 months' net operating income. The property is subject to a tax abatement that expires in 2017. Assuming this tax abatement is normalized, the company's purchase price would represent an approximate 6% economic cap rate on expected next 12 months' net operating income.
In addition, EDR purchased Irish Row — a collegiate housing community adjacent to the University of Notre Dame in South Bend, Indiana — for $27.5 million in cash.
Irish Row is a purpose-built collegiate community, constructed in 2009 and 2011, consisting of 326 beds in 127 units in a variety of two-, three-, and four-bedroom styles. The average monthly rental rate is $726 per bed, and the community is currently 100% leased for the 2011/2012 academic year. Based on this leasing and other information, the purchase price represents a 6% economic cap rate on expected next 12 months' net operating income.
The company also will purchase of The Lotus Center, a collegiate housing community adjacent to the University of Colorado Boulder (CU-Boulder) for $6.0 million. The purchase is expected to close in mid-November 2011 and will be funded with cash on hand.
The Lotus Center, located on 2.5 acres adjacent to the CU-Boulder, was originally constructed in 1960 but received extensive internal renovations in 2008. The property consists of 40 beds within 9 units, with an average monthly rental rate of $750 per bed. The community is currently 100% occupied for the 2011/2012 academic year. EDR expects to build adjacent housing with an underground parking garage, adding 199 beds within 59 apartments in a variety of one-, two-, three-, and four-bedroom styles. Each unit will include a washer and dryer, free WiFi and cable, kitchen and full, private baths, and the total parking spaces will increase to 179 upon completion. Construction on the $19.7 million, 199-bed addition is expected to commence in 2012 for a summer 2013 opening.
About Education Realty Trust
Education Realty Trust Inc. (NYSE: EDR) is one of America's largest owners, developers and managers of collegiate housing. EDR is a self-administered and self-managed real estate investment trust that — with the purchase of these existing beds — owns or manages 60 communities in 23 states with nearly 34,500 beds within nearly 11,000 units. For more information please visit the company's web site at www.educationrealty.com.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
Statements about the company's business that are not historical facts are "forward-looking statements." Forward-looking statements are based on current expectations. You should not rely on our forward-looking statements because the matters they describe are subject to known and unknown risks and uncertainties that could cause the company's future results, performance, or achievements to differ significantly from the results, performance, or achievements expressed or implied by such statements. Such risks are set forth under the captions "Item 1A. Risk Factors" and "Forward-Looking Statements" in our annual report on Form 10-K and under the caption "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations" (or similar captions) in our quarterly reports on Form 10-Q, and as described in our other filings with the Securities and Exchange Commission. Forward-looking statements speak only as of the dates on which they are made, and the company undertakes no obligation to update publicly or revise any guidance or other forward-looking statement, whether as a result of new information, future developments, or otherwise.
Contacts:
Education Realty Trust
Randall H. Brown, 901-259-2500
Executive
Vice President, CFO & Treasurer
rbrown@edrtrust.com
or
Susan
Jennings, 901-259-2506
Vice President, Corporate Communications
and Marketing
sjennings@edrtrust.com
