Education Realty Trust, Inc.
) - commonly known as EdR -disclosed investments worth $171 million
in acquisitions and developments at 3 major U.S. universities. The
move comes as part of the company's effort to solidify its
portfolio and expand its operating horizon. To fund this
investment, the company reaped capital through a recent equity
The investment specifically involved the acquisition of a
collegiate housing community serving Arizona State University in
Tempe. The two other investments were a cottage community next to
the University of Louisville as well as the fourth phase of its
Storrs Center/The Oaks on the Square development pedestrian to the
University of Connecticut.
The Tempe property, known as The District on Apache is fully
occupied and for the coming academic year, the property is 90%
pre-leased. Notably, EdR agreed to acquire The District on Apache
for around $92 million and aimed for first-year, unleveraged
economic yield of 6.25% for this buyout. The company is on course
for a closing in September.
For the Louisville project, EdR collaborated with Georgia-based
Landmark Properties. The company will enjoy 75% stake and would
manage the community following completion. The property is slated
for delivery in 2015 and is anticipated to cost around $45 million,
with EdR's share of about $33.8 million.
The third one is the fourth phase of its Storrs Center/The Oaks on
the Square development. EdR will own and manage the $45 million
residential development following its completion in summer 2015.
Specifically, EdR would manage the residential part, The Oaks on
The Square. The property would be next to the other 3 phases
comprising 414 apartments in total and are fully pre-leased for the
2014-2015 leasing session.
Going forward, we expect such strategic investments in buyouts and
development of properties placed in attractive markets to augment
the company's operating platform and help in top-line expansion.
Education Realty Trust currently carries a Zacks Rank #3 (Hold).
Investors interested in the REIT industry may consider stocks like
Spirit Realty Capital, Inc.
Equity LifeStyle Properties, Inc.
). While Spirit Realty has a Zacks Rank #1 (Strong Buy), Equity
LifeStyle and UDR carry a Zacks Rank #2 (Buy).
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