MEMPHIS, Tenn., Nov. 28, 2006 (PRIME NEWSWIRE) -- Education Realty Trust, Inc. (NYSE:EDR) today announced it has completed the joint venture purchase of Fontainebleu, a 437-bed off-campus collegiate community near the University of California, Santa Barbara (UCSB) for $42.5 million.
The joint venture purchase is the second for EDR on the West Coast in two months and extends the scope of company operations in California, which annually leads America in the number of high school graduates. EDR expects the transaction to be immediately accretive.
The purchase is structured in a joint venture with JPMorgan Asset Management, a global leader in asset management serving institutions, individuals and financial intermediaries. EDR owns a 10 percent minority interest in the joint venture and provides fee-based management services to Fontainebleu through its community management subsidiary, Allen & O'Hara Education Services, Inc. (AOES).
The Fontainebleu community is located at the gateway to the 989-acre UCSB campus, located along the Pacific Coast about 100 miles northwest of Los Angeles. UCSB is one of only 62 research-intensive universities in the United States and since 1998 UCSB faculty members have won five Nobel prizes. Enrollment at UCSB exceeds 21,000 students. In addition, nearby Santa Barbara City College (SBCC) has an enrollment of almost 17,000 students.
"We are pleased with the purchase of this high-profile property in an exceptional market in partnership with such a sophisticated group of hands-on real estate investors. We expect our community and our joint venture will perform very well over time," said EDR Executive Vice President and Chief Investment Officer Craig Cardwell.
Fontainebleu is comprised of a residence hall building and a separate apartment building. It is currently 95 percent occupied. All students have a room-and-board contract with full meal service for the academic year. The summer business is supplemented by an array of successful summer camps and workshops.
The joint venture expects to invest in a substantial renovation plan to upgrade and reposition the student community. Work is expected to begin in the spring of 2007 and take two years to complete. Allen & O'Hara Development Company, LLC, the development company subsidiary of EDR, will oversee the renovation project.
EDR and AOES managers are familiar with the Santa Barbara, California market. Allen & O'Hara, Inc., EDR's predecessor company, was the original developer and owner of Francisco Torres, a landmark student housing community serving University of California, Santa Barbara students, and maintained an interest in it from 1968 until 1999.
The $42.5 million joint venture purchase closed on November 21, 2006. It is being financed in part by a seven-year, interest-only $29.1 million loan, which carries an interest rate of 5.64 percent.
In September 2006, EDR closed a separate $45 million joint-venture purchase of University Village Towers, a 525-bed off-campus collegiate community serving students at the University of California, Riverside.
About Education Realty Trust
Education Realty Trust, Inc. (NYSE:EDR) is a real estate investment trust that owns, manages and develops high-quality collegiate student housing. Led by a team with more than 170 years of shared industry experience, EDR is one of America's largest owners and operators of collegiate student housing. Its portfolio includes 36,797 beds at 60 properties in 21 states. For more information please visit the company's Web site at www.educationrealty.com.
About JPMorgan Asset Management
JPMorgan Asset Management is a global asset management leader providing world-class investment solutions to institutions, individuals and financial intermediaries. The firm is responsible for $898 billion in assets under management, including $41.1 billion in real estate managed by JPMorgan Asset Management -- Real Estate, as of June 30, 2006. (See Note.) With a 36-year history of successful investing and a staff of more than 180 real estate professionals, JPMorgan Asset Management -- Real Estate identifies, analyzes, negotiates, acquires, develops, redevelops, renovates, operates, maintains, finances and sells commercial properties, on behalf of its clients. JPMorgan Asset Management's broad investment capabilities and framework for analyzing opportunities in today's complex real estate markets provides critical insights for its institutional clients in both the public and private markets. (Note: Based on AUM for the Asset & Wealth Management (JPMAM, PB, PCS) division of JPMorgan Chase & Co. as of June 30, 2006.)
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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 date on which they are made, and EDR undertakes no obligation to update publicly or revise any forward-looking statement, whether as a result of new information, future developments, or otherwise.