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Education Realty Closes Credit Facility

EDR ACC

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Education Realty Trust Inc. (EDR - Snapshot Report) recently announced the closure of an unsecured revolving credit facility with an increase in size to $175 million from $95 million. The facility also comprises an option allowing the company to increase the size to $135.0 million. The $175 million credit facility has an initial term of three years, and the company may request an extension of the maturity date for an additional year.

This expanded new facility will enable the company to attain financial flexibility and seize investment opportunities and make acquisitions, which in turn will boost top-line growth. As of June 30, 2011, Education Realty’s cash position stood at $71.3 million.

During the second quarter of 2011, the company reported FFO (fund from operations) of $6.4 million or 9 cents per share compared with $6.9 million or 12 cents per share in the year-earlier quarter. Fund from operations, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.

Education Realty is a real estate investment trust (REIT) that develops, acquires, owns, and manages student housing communities located in close proximity to university campuses in the United States. It manages 57 communities in 23 states with more than 33,800 beds across more than 10,600 units.

Education Realty currently retains a Zacks #2 Rank, which translates into a short-term Buy rating. We are also maintaining our long-term Neutral recommendation on the stock. One of its competitors, American Campus Communities Inc (ACC - Snapshot Report) also holds a Zacks #2 Rank.

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