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UNITED STATES SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549


FORM 10-K


|           |  |                                                                                             
|---------- |  | --------------------------------------------------------------------------------------------
|(Mark One) |  |                                                                                             
|þ          |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934    
|          
|           |  | For the fiscal year ended December 31, 2004                                                 
|          
|OR        
|          
|o          |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934
|          
|           |  | For the transition period
    from           to                                             

Commission file number: 001-32417


Education Realty Trust, Inc.


(Exact Name of Registrant as Specified in Its Charter)


|                                                                                              |  |                                         
|--------------------------------------------------------------------------------------------- |  | ----------------------------------------
|Maryland                                                                                      |  | 20-1869228                              
|(State or other jurisdiction of
    incorporation or organization)                            |  | (I.R.S. Employer
    Identification No.)
|                                                                                             
|530 Oak Court Drive, Suite 300,
    Memphis Tennessee(Address of principal executive offices) |  | 38117(Zip Code)                         

Registrants telephone number, including area code:
(901)259-2500


Securities registered pursuant to section 12(b) of the
Act:


|                                       |  |                                       
|-------------------------------------- |  | --------------------------------------
|(Title of Class)                       |  | (Name of Exchange on Which Registered)
|                                       |  |                                       
|Common Stock, $.01 par value per share |  | New York Stock Exchange               

Securities registered pursuant to section 12(g) of the
Act:


None


o þ


þ


o þ






DOCUMENTS INCORPORATED BY REFERENCE












---










EDUCATION REALTY TRUST, INC.


FORM 10-K


Year Ended December 31, 2004


|                                                     |  |                                                                                                                      |    |      |    | 
|---------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------- | -- | ---- | -- | 
|                                                     |  |                                                                                                                      |    | Page |   
|                                                     |  |                                                                                                                      |    |      |   
|Item 1.                                              |  | Business                                                                                                             |    |      | 2  | 
|Item 2.                                              |  | Properties                                                                                                           |    |      | 24 | 
|Item 3.                                              |  | Legal Proceedings                                                                                                    |    |      | 26 | 
|Item 4.                                              |  | Submission of Matters to a Vote of Security
    Holders                                                              |    |      | 26 | 
|Item 5.                                              |  | Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities |    |      | 26 | 
|Item 6.                                              |  | Selected Financial Data                                                                                              |    |      | 28 | 
|Item 7.                                              |  | Managements Discussion and Analysis
    of Financial Condition and Results of Operations                            |    |      | 31 | 
|Item 7A.                                             |  | Quantitative and Qualitative Disclosures
    About Market Risk                                                       |    |      | 43 | 
|Item 8.                                              |  | Financial Statements and Supplementary
    Data                                                                      |    |      | 44 | 
|Item 9.                                              |  | Changes in and Disagreements with
    Accountants on Accounting and Financial Disclosure                             |    |      | 44 | 
|Item 9A.                                             |  | Controls and Procedures                                                                                              |    |      | 44 | 
|Item 9B.                                             |  | Other Information                                                                                                    |    |      | 44 | 
|Item 10.                                             |  | Directors and Executive Officers of the
    Registrant                                                               |    |      | 44 | 
|Item 11.                                             |  | Executive Compensation                                                                                               |    |      | 44 | 
|Item 12.                                             |  | Security Ownership of Certain Beneficial
    Owners and Management and Related Stockholder Matters                   |    |      | 44 | 
|Item 13.                                             |  | Certain Relationships and Related
    Transactions                                                                   |    |      | 44 | 
|Item 14.                                             |  | Principal Accounting Fees and Services                                                                               |    |      | 44 | 
|Item 15.                                             |  | Exhibits and Financial Statement
    Schedules                                                                       |    |      | 45 | 
|Signatures                                           |  |                                                                                                                      | 46 |     
|EX-31.1 SECTION 302 CERTIFICATION OF THE CEO        
|EX-31.2 SECTION 302 CERTIFICATION OF THE CFO        
|EX-32.1 SECTION 906 CERTIFICATION OF THE CEO AND CFO





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FORWARD-LOOKING STATEMENTS






1



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PART I







|        |          
|------- | ---------
|Item 1. | Business.

Our Company








| |   |                                                                                                                                                           
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | located in close proximity to university campuses (within two
    miles or less);                                                                         
|
| |  | average age of approximately six years;                                                                                                                   
|
| |  | designed specifically for students with modern unit plans and
    amenities; and                                                                          
|
| |  | supported by our long-standing Community Assistant program and
    other student-oriented activities and services that enhance the
    college experience.

Initial Public Offering and Formation Transactions






| |   |                                                                                                                                                                                                                                        
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Approximately $123.1 million to pay the cash portion of our
    formation transactions.                                                                                                                                                
|
| |  | Approximately $118.4 million to repay mortgage debt assumed
    in the formation transactions, including prepayment fees of
    approximately $3.7 million.                                                                            
|
| |  | Approximately $6.0 million to fund our revolving loan
    commitment to an affiliate of JPI.                                                                                                                                           
|
| |  | Approximately $1.1 million to pay loan origination fees
    relating to our $75 million revolving credit facility that
    was obtained on January 31, 2005.                                                                           
|
| |  | Approximately $72.2 million for general corporate uses,
    which may include the acquisition of additional student housing
    communities, repayment of additional indebtedness and payment of
    distributions to our stockholders.

2



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| |                                         
| | ----------------------------------------
| | Our Structure Following the Closing Date







Our Management Company and Our Development Company




Our Business and Growth Strategy




3



---



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Acquisition Strategy






|  |                                                                       
|- | ----------------------------------------------------------------------
| | campus reputation                                                     
| | competitive admissions criteria                                       
| | limited number of on-campus beds and limited 
     plans for expansion
| | distance of property from campus                                      
| | property unit mix                                                     
| | competition                                                           
| | significant out-of-state enrollment                                   
| | operating performance                                                 
| | potential for improved management                                     
| | ownership and capital structure                                       
| | presence of desired amenities                                         
| | maintenance of the property                                           
| | access to a university-sponsored or public 
     transportation line  
| | parking availability                                                  





Operating Strategy




Maximize property profitability.




| |   |                                                                                                            
| | - | -----------------------------------------------------------------------------------------------------------
| |  | establishing internal controls and procedures for cost control
    consistently throughout our communities;
|
| |  | operating with flat property-level management structures,
    minimizing multiple layers of management;    

4



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| |   |                                                                                                                                                                                           
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | negotiating utility and service-level pricing arrangements with
    national and regional vendors and requiring corporate-level
    approval of service agreements for each community; and
|
| |  | conducting an annual assessment of the costs and effectiveness
    of each of our marketing strategies in order to place greater
    emphasis on lower cost/high-impact initiatives.      

Proactive marketing practices.


Develop and retain personnel.


Maintain and develop strategic relationships.


Third-Party Services








| |                                
| | -------------------------------
| | Third-party management services





5



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|                                     |                            |            |                                             |           |  |       |            |  |  |     | 
|------------------------------------ | -------------------------- | ---------- | ------------------------------------------- | --------- |  | ----- | ---------- |  |  | --- | 
|Property                             |                            | University |                                             | # of Beds |  |       | # of Units | 
|                                     |                            |            |                                             |           |  |       |            | 
|On-campus properties                 |                            |            |                                             |           |  |       |            |  |  |    
|                                     | Calhoun Street Apartments  |            | University of Cincinnati                    |           |  | 758   |            |  |  | 288 | 
|                                     | Reinhard Villages          |            | Clarion University of Pennsylvania          |           |  | 656   |            |  |  | 180 | 
|                                     | University Park            |            | Salisbury University (Maryland)             |           |  | 576   |            |  |  | 145 | 
|                                     | Bettie Johnson Hall        |            | University of Louisville                    |           |  | 493   |            |  |  | 224 | 
|                                     | University Village         |            | California State University  San Marcos    |           |  | 471   |            |  |  | 126 | 
|                                     | Normal Hills Apartments    |            | Alabama A&M University                      |           |  | 448   |            |  |  | 240 | 
|                                     | Kurz Hall                  |            | University of Louisville                    |           |  | 402   |            |  |  | 224 | 
|                                     | Arlington Park Apartments  |            | University of Northern Colorado             |           |  | 396   |            |  |  | 180 | 
|                                     | University Park  Phase II |            | Salisbury University (Maryland)             |           |  | 312   |            |  |  | 108 | 
|                                     | Minardi Hall               |            | University of Louisville                    |           |  | 38    |            |  |  | 20  | 
|                                     |                            |            |                                             |           |  |       |            | 
|Total on-campus                      |                            |            | 4,550                                       |           |  |       | 1,735      | 
|Off-campus properties                |                            |            |                                             |           |  |       |            |  |  |    
|                                     | Granville Towers           |            | University of North Carolina at Chapel Hill |           |  | 1,453 |            |  |  | 363 | 
|                                     | The Reserve on Stinson     |            | University of Oklahoma                      |           |  | 720   |            |  |  | 240 | 
|                                     | Illini Tower               |            | University of Illinois at Champaign         |           |  | 709   |            |  |  | 175 | 
|                                     | Stratford Heights          |            | University of Cincinnati                    |           |  | 710   |            |  |  | 174 | 
|                                     | Honeysuckle Apartments     |            | Bloomsburg University of Pennsylvania       |           |  | 480   |            |  |  | 167 | 
|                                     | Evergreen Commons          |            | Lock Haven University of Pennsylvania       |           |  | 408   |            |  |  | 108 | 
|                                     |                            |            |                                             |           |  |       |            | 
|Total off-campus                     |                            |            | 4,480                                       |           |  |       | 1,227      | 
|                                     |                            |            |                                             |           |  |      
|Totals (for both on- and off-campus) |                            |            | 9,030                                       |           |  |       | 2,962      | 
|                                     |                            |            |                                             |           |  |      



| |                                            
| | -------------------------------------------
| | Third-party development consulting services





| |   |                                                                                                                          
| | - | -------------------------------------------------------------------------------------------------------------------------
| |  | market analysis and evaluation of housing needs and options;                                                             
|
| |  | cooperation with university in architectural design;                                                                     
|
| |  | negotiation of ground lease, development agreement, construction
    contract, architectural contract and bond documents;
|
| |  | oversight of architectural design process;                                                                               
|
| |  | coordination of governmental and university plan approvals;                                                              
|
| |  | oversight of construction process;                                                                                       

6



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| |   |                                                
| | - | -----------------------------------------------
| |  | design, purchase and installation of furniture;
|
| |  | pre-opening marketing to students; and         
|
| |  | obtaining final approvals of construction.     





Our Operations






Residence Life and Student Development




7



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| |   |                                                                                                                         
| | - | ------------------------------------------------------------------------------------------------------------------------
| |  | community-building and social activities geared to
    university-related events, holidays, public safety and education;
|
| |  | study and attention skills counseling;                                                                                  
|
| |  | career development, resume writing and employment search skill
    training;                                            
|
| |  | sponsorship of intramural sport teams, academic clubs and
    alumni-based activities;                                  
|
| |  | parent and resident appreciation events;                                                                                
|
| |  | community service activities including recycling, blood drives,
    food drives and student volunteer committees;       
|
| |  | lectures focused on social issues, including effective
    communication, multi-cultural awareness and substance abuse; 
|
| |  | university outreach activities; and                                                                                     
|
| |  | voter registration, enrollment and education.                                                                           



Marketing








Leasing




8



---



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| |   |                                                                                                                                                                                                                                                                                           
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Rent typically covers all common area amenities and water/
    sewer/ trash removal. Internet and cable TV service are included
    where required by market conditions.                                                                                                                  
|
| |  | Student residents pay a non-refundable service fee in addition
    to an application fee. The service fee is used to recover the
    costs of redecorating at the end of the academic year.                                                                                               
|
| |  | Units are inspected quarterly for damage or routine repairs. All
    cited damages are repaired and immediately charged to the
    resident account for collection. This procedure reduces
    end-of-year repairs and keeps the units in good order throughout
    the term of residency.
|
| |  | Subletting units is permitted with our written consent and for a
    fee.                                                                                                                                                                                                                 
|
| |  | Student residents are responsible for any damages that their
    visitors cause anywhere on the premises.                                                                                                                                                                                 

Strategic Relationships






9



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Information Management






| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Real-time capabilities for accounting, lease administration
    and monitoring. Our information systems provide both on-site
    and corporate management with comprehensive reports to assist
    them in the daily operation of each student housing community.
    Internet-based links provide real time transfers of information,
    permitting our corporate management and accounting group to
    interface with the on-site staff efficiently on a daily basis,
    as needed. This reduces the incidence of errors during the
    monthly reporting period and results in timely and accurate
    financial reporting.                                                                                                                               
|
| |  | Leasing and marketing. We load data that we collect on
    each resident prospect into our software database, allowing us
    to track and conduct follow-up sales pursuits on all residents
    from their initial contact with us through move-in. This
    procedure allows us to measure our success using sales closing
    ratios and also to perform follow-up with prospects that elect
    to reside elsewhere. Our corporate staff uses internally
    generated customized reports to monitor leasing progress daily
    throughout the sales season. Together with feedback from the
    on-site leasing team, this allows us to reposition ourselves in
    the market as needed to adjust to competitor activity or general
    market conditions.

Competition




| |                              
| | -----------------------------
| | Competition from universities







| |                                
| | -------------------------------
| | Competition from private owners



10



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| |                          
| | -------------------------
| | Our competitive strengths





| |   |                                                                                                                       
| | - | ----------------------------------------------------------------------------------------------------------------------
| |  | Senior management team with over 160 years of collective
    experience working together at our Predecessor.          
|
| |  | Property portfolio with modern unit plans and amenities and
    average age of approximately six years.               
|
| |  | Focused acquisition strategy.                                                                                         
|
| |  | Complementary third-party services business, including
    third-party management and development consulting services.
|
| |  | Established marketing practices.                                                                                      
|
| |  | Focus on customer satisfaction and quality control.                                                                   

Employees






| |   |                                                                         
| | - | ------------------------------------------------------------------------
| |  | 795 on-site employees, including 200 Community Assistants;              
|
| |  | 19 persons in our property management services department;              
|
| |  | seven persons in our development consulting services
    department; and
|
| |  | 16 executive, corporate administration and financial personnel.         







|                  |  |                                                       |  |                      |    | 
|----------------- |  | ----------------------------------------------------- |  | -------------------- | -- | 
|                  |  |                                                       |  | Number of Years with |   
|Executive Officer |  | Title                                                 |  | Our Predecessor      |   
|                  |  |                                                       |  |                      |   
|Paul O. Bower     |  | Chairman, Chief Executive Officer and President       |  |                      | 35 | 
|Craig L. Cardwell |  | Executive Vice President and Chief Investment Officer |  |                      | 33 | 
|Thomas J. Hickey  |  | Senior Vice President of Operations                   |  |                      | 32 | 
|Wallace L. Wilcox |  | Vice President of Construction                        |  |                      | 24 | 
|William W. Harris |  | Senior Vice President of Development                  |  |                      | 22 | 
|Susan B. Arrison  |  | Vice President of Human Resources                     |  |                      | 14 | 
|Randall H. Brown  |  | Executive Vice President and Chief Financial Officer  |  |                      | 5  | 

11



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Code of Business Conduct and Ethics


www.educationrealty.com.


Available Information


http://www.educationrealty.com http://www.sec.gov.


Risk Factors




| |                                                 
| | ------------------------------------------------
| | Risks related to our properties and our business



| |                                                                                                                                                                                                                                                                                        
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our results of operations are subject to the following risks
    inherent in the student housing industry: annual leasing cycle,
    concentrated lease-up period, seasonal cash flows and increased
    risk of student defaults during the summer months of a
    twelve-month lease.





| |                                                                                                                                               
| | ----------------------------------------------------------------------------------------------------------------------------------------------
| | Our use of debt financing reduces cash available for
    distribution and may expose us to the risk of default under our
    debt obligations.





| |   |                                                                                                                                                               
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | we may be unable to borrow additional funds as needed or on
    favorable terms;                                                                              
|
| |  | we may be unable to refinance our indebtedness at maturity or
    the refinancing terms may be less favorable than the terms of
    our original indebtedness;
|
| |  | we may be forced to dispose of one or more of our properties,
    possibly on disadvantageous terms;                                                          

12



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| |   |                                                                                                                                                                                                                                                            
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | we may default on our payment or other obligations as a result
    of insufficient cash flow or otherwise, and the lenders or
    mortgagees may foreclose on our properties that secure their
    loans and receive an assignment of rents and leases; and
|
| |  | foreclosures could create taxable income without accompanying
    cash proceeds, a circumstance that could hinder our ability to
    meet the REIT distribution requirements.                                                                              



| |                                                         
| | --------------------------------------------------------
| | We are recently organized and have no operating history.





| |                                                                                         
| | ----------------------------------------------------------------------------------------
| | The consideration we paid for our initial assets may exceed
    their fair market value.





| |                                                                                                                                                                                 
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We face significant competition from university-owned student
    housing and from other private student housing communities
    located within close proximity to universities.







13



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| |                                                                                     
| | ------------------------------------------------------------------------------------
| | We may not be able to recover our costs for our development
    consulting services.





| |                                                                                                                                                                  
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The terms of our acquisition agreements with JPI may cause us
    to incur additional costs and liabilities in connection with the
    JPI portfolio acquisition.





14



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| |                                                                                                                                                                                                                               
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We may be unable to take advantage of certain disposition
    opportunities because of additional costs we have agreed to pay
    if we sell certain of our properties in taxable transactions for
    a period of five years.





| |                                                                                                                                                          
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------
| | We rely on our relationships with universities, and changes
    in university personnel and/or policies could adversely affect
    our operating results.







| |                                                                                                                                                                  
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our growth will be dependent upon our ability to acquire
    and/or develop, lease, integrate and manage additional student
    housing communities successfully.







| |   |                                                                                                                                                                       
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | we may be unable to acquire a desired property at all or at a
    desired purchase price because of competition from other
    purchasers of student housing;         
|
| |  | many of our future acquisitions are likely to be dependent on
    external financing, and we may be unable to finance an
    acquisition on favorable terms or at all;
|
| |  | we may be required to incur significant capital expenditures to
    improve or renovate acquired properties;                                                          
|
| |  | we may be unable to quickly and efficiently integrate new
    acquisitions, particularly acquisitions of portfolios of
    properties, into our existing operations;  

15



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| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | market conditions may result in higher than expected vacancy
    rates and lower than expected rental rates; and                                                                                                                                                                                                                                                                                                                                                                             
|
| |  | we may acquire properties subject to liabilities but without any
    recourse, or with only limited recourse, to the sellers, or with
    liabilities that are unknown to us, such as liabilities for
    undisclosed environmental contamination, claims by tenants,
    vendors or other persons dealing with the former owners of the
    properties and claims for indemnification by members, directors,
    officers and others indemnified by the former owners of the
    properties.



Risks related to the real
estate industry




| |                                                                                                                                                           
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our performance and the value of our real estate assets are
    subject to risks associated with real estate assets and with the
    real estate industry.





| |   |                                                                                                                 
| | - | ----------------------------------------------------------------------------------------------------------------
| |  | local oversupply of student housing units, increased competition
    or reduction in demand for student housing;
|
| |  | inability to collect rent from tenants;                                                                         
|
| |  | vacancies or our inability to lease beds on favorable terms;                                                    
|
| |  | increased operating costs, including insurance premiums,
    utilities, and real estate taxes;                  
|
| |  | costs of complying with changes in governmental regulations;                                                    
|
| |  | the relative illiquidity of real estate investments;                                                            
|
| |  | changing student demographics;                                                                                  
|
| |  | national, regional and local economic conditions; and                                                           
|
| |  | rising interest rates.                                                                                          



| |                                                                                                                                                                                                             
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We have limited time to perform due diligence on many of our
    acquired properties, which could subject us to significant
    unexpected liabilities and under-performance of the acquired
    properties.



16



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| |                                                
| | -----------------------------------------------
| | Certain losses may not be covered by insurance.





| |                                                                                                                              
| | -----------------------------------------------------------------------------------------------------------------------------
| | Future terrorist attacks in the United States could harm the
    demand for and the value of our student housing communities.







| |                                                                                                                         
| | ------------------------------------------------------------------------------------------------------------------------
| | We could incur significant costs related to government
    regulation and private litigation over environmental matters.





17



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| |                                                                                          
| | -----------------------------------------------------------------------------------------
| | We could be exposed to liability and remedial costs related
    to environmental matters.











18



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| |                                                                                                        
| | -------------------------------------------------------------------------------------------------------
| | We may incur significant costs complying with the Americans
    with Disabilities Act and similar laws.







| |                                                                     
| | --------------------------------------------------------------------
| | We may incur significant costs complying with other
    regulations.





| |                                                                             
| | ----------------------------------------------------------------------------
| | Our potential participation in joint ventures presents
    additional risks.



19



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| |                                                                                                                                                          
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------
| | Illiquidity of real estate investments could significantly
    impede our ability to respond to adverse changes in the
    performance of our properties.





Risks related to our
organization and structure




| |                                                                                                     
| | ----------------------------------------------------------------------------------------------------
| | To maintain our REIT status, we may be forced to limit the
    activities of our Management Company.





| |                                                                                                
| | -----------------------------------------------------------------------------------------------
| | We will depend heavily on the availability of equity and debt
    capital to fund our business.





| |   |                                                                                  
| | - | ---------------------------------------------------------------------------------
| |  | general market conditions;                                                       
|
| |  | our current debt levels and the number of properties subject to
    encumbrances;
|
| |  | our current performance and the markets perception of our
    growth potential; 
|
| |  | our cash flow and cash distributions; and                                        
|
| |  | the market price per share of our common stock.                                  

20



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| |                                                                                  
| | ---------------------------------------------------------------------------------
| | Our charter contains restrictions on the ownership and
    transfer of our stock.







| |                                                                                                            
| | -----------------------------------------------------------------------------------------------------------
| | Certain tax and anti-takeover provisions of our charter and
    bylaws may inhibit a change of our control.





| |   |                                                                                                                                                           
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the REIT ownership limit described above;                                                                                                                 
|
| |  | authorization of the issuance of our preferred shares with
    powers, preferences or rights to be determined by our board of
    directors;              
|
| |  | the right of our board of directors, without a stockholder vote,
    to increase our authorized shares and classify or reclassify
    unissued shares; and
|
| |  | advance notice requirements for stockholder nomination of
    directors and for other proposals to be presented at stockholder
    meetings.              



| |                                                                                                             
| | ------------------------------------------------------------------------------------------------------------
| | The Maryland business statutes also impose potential
    restrictions on a change of control of our Company.



21



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| |                                                                                                                            
| | ---------------------------------------------------------------------------------------------------------------------------
| | We have the right to change some of our policies that may be
    important to our stockholders without stockholder consent.





| |                                                                                                                                                           
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------
| | The ability of our board of directors to revoke our REIT
    election without stockholder approval may cause adverse
    consequences to our stockholders.





| |                                                                                                                 
| | ----------------------------------------------------------------------------------------------------------------
| | Our rights and the rights of our stockholders to take action
    against our directors and officers are limited.





| |                                                                                    
| | -----------------------------------------------------------------------------------
| | Our success depends on key personnel whose continued service
    is not guaranteed.



Federal income tax
risks




| |                                                                                                               
| | --------------------------------------------------------------------------------------------------------------
| | Failure to qualify as a REIT would have significant adverse
    consequences to us and the value of our stock.



22



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| |   |                                                                                                                                                                                                          
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | we would not be allowed a deduction for distributions to
    stockholders in computing our taxable income, and such amounts
    would be subject to federal income tax at regular corporate
    rates;   
|
| |  | we also could be subject to the federal alternative minimum tax
    and possibly increased state and local taxes; and                                                                                    
|
| |  | unless we are entitled to relief under applicable statutory
    provisions, we could not elect to be taxed as a REIT for four
    taxable years following the year during which we were
    disqualified.







| |                                                                                                 
| | ------------------------------------------------------------------------------------------------
| | We may be subject to federal and state income taxes that
    would harm our financial condition.





| |                                                                                                                                                                                                       
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | An investment in our common stock has various tax risks,
    including the treatment of distributions in excess of earnings
    and the inability to apply passive losses against
    distributions.



23



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| |                                                                                   
| | ----------------------------------------------------------------------------------
| | Future distributions may include a significant portion as a
    return of capital.






Item 2.Properties.


General










| |   |                                                                                                                                                           
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | located in close proximity to university campuses (within two
    miles or less);                                                                         
|
| |  | average age of approximately six years;                                                                                                                   
|
| |  | designed specifically for students with modern unit plans and
    amenities; and                                                                          
|
| |  | supported by our long-standing Community Assistant program and
    other student-oriented activities and services that enhance the
    college experience.

24



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##### Table of Contents



Properties




|                       |  |                           |                                 |      |       |         |       |      |         |                              |       |           |           |         |               |         |                |     |           |        |  |   |       |     |  |   |     |    
|---------------------- |  | ------------------------- | ------------------------------- | ---- | ----- | ------- | ----- | ---- | ------- | ---------------------------- | ----- | --------- | --------- | ------- | ------------- | ------- | -------------- | --- | --------- | ------ |  | - | ----- | --- |  | - | --- | ---
|                       |  |                           |                                 |      |       |         |       |      |         | Year Ended December 31, 2004 |      
|                       |  |                           |                                 |      |       |         |       |      |         |                              |      
|                       |  |                           |                                 |      |       |         |       |      |         |                              |       | Revenue   |          
|                       |  |                           |                                 |      |       | Average |       |      | Average |                              |       | Month-End |           |         | Monthly Total |         |                | Per |          
|                       |  |                           |                                 | Year |       |         | # of  |      |         | # of                         |       |           | Occupancy |         |               | Revenue |                |     | Available |       
|Name                   |  | Primary University Served |                                 |      | Built |         |       | Beds |         |                              | Units |           |           | Rate(1) |               |         | (in thousands) |     |           | Bed(2) | 
|                       |  |                           |                                 |      |       |         |       |      |         |                              |       |           |           |         |               |         |                |     |           |        | 
|NorthPointe            |  |                           | University of Arizona           |      |       |         | 1999  |      |         |                              | 912   |           |           |         | 300           |         |                |     | 91.9      | %      |  | $ | 4,057 |     |  | $ | 371 |    
|The Reserve at Athens  |  |                           | University of Georgia           |      |       |         | 1999  |      |         |                              | 612   |           |           |         | 200           |         |                |     | 93.8      |        |  |   | 2,661 |     |  |   | 362 |    
|The Reserve at Clemson |  |                           | Clemson University              |      |       |         | 1999  |      |         |                              | 590   |           |           |         | 177           |         |                |     | 95.0      |        |  |   | 2,316 |     |  |   | 327 |    
|Players Club           |  |                           | Florida State University        |      |       |         | 1994  |      |         |                              | 336   |           |           |         | 84            |         |                |     | 94.4      |        |  |   | 1,530 |     |  |   | 379 |    
|The Gables             |  |                           | Western Kentucky University     |      |       |         | 1995  |      |         |                              | 290   |           |           |         | 73            |         |                |     | 97.3      |        |  |   | 1,118 |     |  |   | 321 |    
|College Station        |  |                           | Augusta State University        |      |       |         | 1989  |      |         |                              | 203   |           |           |         | 61            |         |                |     | 88.4      |        |  |   | 617   |     |  |   | 253 |    
|University Towers(3)   |  |                           | North Carolina State University |      |       |         | 1989  |      |         |                              | 953   |           |           |         | 251           |         |                |     | 75.9      |        |  |   | 7,406 | (3) |  |   | 648 | (3)
|                       |  |                           |                                 |      |       |         |       |      |         |                              |       |           |           |         |               |         |                |     |           |        | 
|Total                  |  |                           | 1995                            | (4)  |       |         | 3,896 |      |         |                              | 1,146 |           |           |         | 89.2          | %       |                | $   | 19,705    |        |  | $ | 421   | (4)
|                       |  |                           |                                 |      |       |         |       |      |         |                              |       |           |           |         |               |         |                |    

|                       |  |                           |                                 |      |       |         |       |      |         |                              |       |           |           |         |               |         |                |     |           |        |  |   |       |     |  |   |     |    
|---------------------- |  | ------------------------- | ------------------------------- | ---- | ----- | ------- | ----- | ---- | ------- | ---------------------------- | ----- | --------- | --------- | ------- | ------------- | ------- | -------------- | --- | --------- | ------ |  | - | ----- | --- |  | - | --- | ---
|                       |  |                           |                                 |      |       |         |       |      |         | Year Ended December 31, 2003 |      
|                       |  |                           |                                 |      |       |         |       |      |         |                              |      
|                       |  |                           |                                 |      |       |         |       |      |         |                              |       | Revenue   |          
|                       |  |                           |                                 |      |       | Average |       |      | Average |                              |       | Month-End |           |         | Monthly Total |         |                | Per |          
|                       |  |                           |                                 | Year |       |         | # of  |      |         | # of                         |       |           | Occupancy |         |               | Revenue |                |     | Available |       
|Name                   |  | Primary University Served |                                 |      | Built |         |       | Beds |         |                              | Units |           |           | Rate(1) |               |         | (in thousands) |     |           | Bed(2) | 
|                       |  |                           |                                 |      |       |         |       |      |         |                              |       |           |           |         |               |         |                |     |           |        | 
|NorthPointe            |  |                           | University of Arizona           |      |       |         | 1999  |      |         |                              | 912   |           |           |         | 300           |         |                |     | 85.7      | %      |  | $ | 3,772 |     |  | $ | 345 |    
|The Reserve at Athens  |  |                           | University of Georgia           |      |       |         | 1999  |      |         |                              | 612   |           |           |         | 200           |         |                |     | 82.6      |        |  |   | 2,463 |     |  |   | 335 |    
|The Reserve at Clemson |  |                           | Clemson University              |      |       |         | 1999  |      |         |                              | 590   |           |           |         | 177           |         |                |     | 84.6      |        |  |   | 2,101 |     |  |   | 297 |    
|Players Club           |  |                           | Florida State University        |      |       |         | 1994  |      |         |                              | 336   |           |           |         | 84            |         |                |     | 90.8      |        |  |   | 1,428 |     |  |   | 354 |    
|The Gables             |  |                           | Western Kentucky University     |      |       |         | 1995  |      |         |                              | 290   |           |           |         | 73            |         |                |     | 96.5      |        |  |   | 1,006 |     |  |   | 289 |    
|College Station        |  |                           | Augusta State University        |      |       |         | 1989  |      |         |                              | 203   |           |           |         | 61            |         |                |     | 91.0      |        |  |   | 567   |     |  |   | 233 |    
|University Towers(3)   |  |                           | North Carolina State University |      |       |         | 1989  |      |         |                              | 953   |           |           |         | 251           |         |                |     | 79.6      |        |  |   | 7,652 | (3) |  |   | 669 | (3)
|                       |  |                           |                                 |      |       |         |       |      |         |                              |       |           |           |         |               |         |                |     |           |        | 
|Total                  |  |                           | 1995                            | (4)  |       |         | 3,896 |      |         |                              | 1,146 |           |           |         | 85.1          | %       |                | $   | 18,986    |        |  | $ | 406   | (4)
|                       |  |                           |                                 |      |       |         |       |      |         |                              |       |           |           |         |               |         |                |    






|    |                                                                                                                                                                                   
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Average physical month-end occupancy rate for the twelve months
    ended December 31, 2004 and 2003.                                                                             
|   
|(2) | Monthly revenue per available bed is equal to total annual
    revenue divided by the total number of beds (including staff and
    model beds) at the property divided by twelve.
|   
|(3) | Revenues shown above for University Towers include revenue from
    food service operations.                                                                                      
|   
|(4) | Represents average for all properties in portfolio.                                                                                                                               

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##### Table of Contents



Indebtedness




|                                  |  |                                              |        |             |         |  |          |               |      |                   |  |   |          |  |  |  |           | 
|--------------------------------- |  | -------------------------------------------- | ------ | ----------- | ------- |  | -------- | ------------- | ---- | ----------------- |  | - | -------- |  |  |  | --------- | 
|                                  |  |                                              |        |             |         |  |          | Outstanding   |      |                   | 
|                                  |  |                                              |        |             |         |  |          | Balance as of |      |                   | 
|                                  |  |                                              |        | Origination |         |  | Interest |               |      | December 31, 2004 |  |   | Maturity | 
|Property                          |  | Lender                                       |        | Date        |         |  | Rate     |               |      | (in thousands)    |  |   | Date     | 
|                                  |  |                                              |        |             |         |  |          |               |      |                   |  |   |          | 
|NorthPointe                       |  | Bank of America, N.A.                        |        |             | 4/2002  |  |          |               | 6.63 |                   |  | $ | 18,784   |  |  |  | 5/1/2007  | 
|The Reserve at Athens             |  | Bank of America, N.A.                        |        |             | 4/2001  |  |          |               | 7.15 |                   |  |   | 14,754   |  |  |  | 5/1/2006  | 
|The Reserve at Clemson            |  | Bank of America, N.A.                        |        |             | 4/2002  |  |          |               | 6.63 |                   |  |   | 11,952   |  |  |  | 5/1/2007  | 
|Players Club                      |  | Bank of America, N.A.                        |        |             | 4/2001  |  |          |               | 7.15 |                   |  |   | 4,731    |  |  |  | 5/1/2006  | 
|The Gables                        |  | Bank of America, N.A.                        |        |             | 10/2003 |  |          |               | 5.50 |                   |  |   | 4,557    |  |  |  | 11/1/2013 | 
|College Station                   |  | South Trust                                  |        |             | 3/2004  |  |          |               | 5.88 |                   |  |   | 900      |  |  |  | 12/1/2008 | 
|College Station (Second Mortgage) |  | Wrightsboro Properties, LLC                  |        |             | 9/1999  |  |          |               | 9.00 |                   |  |   | 1,032    |  |  |  | 7/15/2009 | 
|University Towers                 |  | Nationsbanc Mortgage
    Capital Corporation |        |             | 2/1998  |  |          |               | 6.77 |                   |  |   | 24,401   |  |  |  | 3/1/2008  | 
|                                  |  |                                              |        |             |         |  |          |               |      |                   |  |   |          | 
|Total                             |  | $                                            | 81,111 |             |         |  |          |              
|                                  |  |                                              |        |             |         | 








|        |                   
|------- | ------------------
|Item 3. | Legal Proceedings.








|        |                                                         
|------- | --------------------------------------------------------
|Item 4. | Submission of Matters to a Vote of Security
    Holders.



PART II







|        |                                                                                                                      
|------- | ---------------------------------------------------------------------------------------------------------------------
|Item 5. | Market for Registrants Common Equity, Related
    Stockholder Matters and Issuer Purchases of Equity
    Securities.

Market Information






26



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##### Table of Contents







| |   |                                                                                                                                                             
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Approximately $123.1 million to pay the cash portion of our
    formation transactions.                                                                     
|
| |  | Approximately $118.4 million to repay mortgage debt assumed
    in the formation transactions, including prepayment fees of
    approximately $3.7 million. 
|
| |  | Approximately $6.0 million to fund our revolving loan
    commitment to an affiliate of JPI.                                                                
|
| |  | Approximately $1.1 million to pay loan origination fees
    relating to our $75 million revolving credit facility that
    was obtained on January 31, 2005.



Recent Sales of Unregistered Securities










27



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##### Table of Contents










|        |                         
|------- | ------------------------
|Item 6. | Selected Financial Data.







| |   |                                                                                                                                                                                                                          
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the student housing operations of Education Properties Trust,
    LLC and its subsidiaries (including the properties referred to
    as NorthPointe, The Reserve at Athens, The Reserve at Clemson
    and Players Club);
|
| |  | the student housing operations of the properties referred to as
    The Gables, College Station and University Towers; and                                                                                               
|
| |  | the third-party management and development consulting service
    operations and real estate operations of Allen &
    OHara Education Services, LLC.                                                                   







28



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##### Table of Contents



STATEMENT OF OPERATIONS DATA


|                                                                    |                                             |                                                   |       |        |        |   |       |        |        |   |       |        |        |      |       |        |        |   |       |       |        | 
|------------------------------------------------------------------- | ------------------------------------------- | ------------------------------------------------- | ----- | ------ | ------ | - | ----- | ------ | ------ | - | ----- | ------ | ------ | ---- | ----- | ------ | ------ | - | ----- | ----- | ------ | 
|                                                                    |                                             | Year ended December 31 Historical-EDR Predecessor |      
|                                                                    |                                             |                                                   |      
|                                                                    |                                             | 2004                                              |       |        | 2003   |   |       | 2002   |        |   | 2001  |        |        | 2000 |      
|                                                                    |                                             |                                                   |       |        |        |   |       |        |        |   |       |        |        |      |      
|                                                                    |                                             | (In thousands)                                    |      
|Revenues:                                                           |                                             |                                                   |       |        |        |   |       |        |        |   |       |        |        |      |       |        |        |   |       |      
|                                                                    | Student housing leasing revenue             |                                                   | $     | 21,033 |        |   | $     | 19,974 |        |   | $     | 19,139 |        |      | $     | 13,084 |        |   | $     | 9,543 |       
|                                                                    | Third-party development consulting services |                                                   |       | 392    |        |   |       | 691    |        |   |       | 1,444  |        |      |       | 305    |        |   |       |      |       
|                                                                    | Third-party management revenue              |                                                   |       | 1,326  |        |   |       | 1,026  |        |   |       | 784    |        |      |       | 767    |        |   |       | 580   |       
|                                                                    | Operating expense reimbursements            |                                                   |       | 5,223  |        |   |       | 4,438  |        |   |       | 3,345  |        |      |       | 2,947  |        |   |       | 2,681 |       
|                                                                    |                                             |                                                   |       |        |        |   |       |        |        |   |       |        |        |      |      
|                                                                    |                                             | Total revenues                                    |       |        | 27,974 |   |       |        | 26,129 |   |       |        | 24,712 |      |       |        | 17,103 |   |       |       | 12,804 | 
|                                                                    |                                             |                                                   |       |        |        |   |       |        |        |   |       |        |        |      |      
|Operating expenses:                                                 |                                             |                                                   |       |        |        |   |       |        |        |   |       |        |        |      |       |        |        |   |       |      
|                                                                    | Student housing leasing operations          |                                                   |       | 10,544 |        |   |       | 10,053 |        |   |       | 9,212  |        |      |       | 6,282  |        |   |       | 4,926 |       
|                                                                    | Reimbursable operating expenses             |                                                   |       | 5,223  |        |   |       | 4,438  |        |   |       | 3,345  |        |      |       | 2,947  |        |   |       | 2,681 |       
|                                                                    | General and administrative                  |                                                   |       | 3,545  |        |   |       | 3,425  |        |   |       | 3,242  |        |      |       | 2,111  |        |   |       | 1,746 |       
|                                                                    | Depreciation and amortization               |                                                   |       | 3,120  |        |   |       | 3,061  |        |   |       | 3,324  |        |      |       | 1,336  |        |   |       | 718   |       
|                                                                    |                                             |                                                   |       |        |        |   |       |        |        |   |       |        |        |      |      
|                                                                    |                                             | Total operating expenses                          |       |        | 22,432 |   |       |        | 20,977 |   |       |        | 19,123 |      |       |        | 12,676 |   |       |       | 10,071 | 
|                                                                    |                                             |                                                   |       |        |        |   |       |        |        |   |       |        |        |      |      
|Operating income                                                    |                                             |                                                   | 5,542 |        |        |   | 5,152 |        |        |   | 5,589 |        |        |      | 4,427 |        |        |   | 2,733 |      
|Nonoperating expense                                                |                                             |                                                   | 5,786 |        |        |   | 5,771 |        |        |   | 5,715 |        |        |      | 3,436 |        |        |   | 2,389 |      
|                                                                    |                                             |                                                   |       |        |        |   |       |        |        |   |       |        |        |      |      
|Income (loss) before equity earnings of unconsolidated
    entities |                                             |                                                   | (244  | )      |        |   | (619  | )      |        |   | (126  | )      |        |      | 991   |        |        |   | 344   |      
|Equity in earnings of unconsolidated entities                       |                                             |                                                   | 1,002 |        |        |   | 629   |        |        |   | 128   |        |        |      | 263   |        |        |   | 486   |      
|                                                                    |                                             |                                                   |       |        |        |   |       |        |        |   |       |        |        |      |      
|Net income                                                          |                                             | $                                                 | 758   |        |        | $ | 10    |        |        | $ | 2     |        |        | $    | 1,254 |        |        | $ | 830   |      
|                                                                    |                                             |                                                   |       |        |        |   |       |        |        |   |       |        |        |      |      

BALANCE SHEET DATA


|                             |                                 |                                                   |        |        |      |   |        |        |  |   |        |        |  |      |        |        |   |   |        |        |  
|---------------------------- | ------------------------------- | ------------------------------------------------- | ------ | ------ | ---- | - | ------ | ------ |  | - | ------ | ------ |  | ---- | ------ | ------ | - | - | ------ | ------ | -
|                             |                                 | Year ended December 31 Historical-EDR Predecessor |       
|                             |                                 |                                                   |       
|                             |                                 | 2004                                              |        |        | 2003 |   |        | 2002   |  |   | 2001   |        |  | 2000 |       
|                             |                                 |                                                   |        |        |      |   |        |        |  |   |        |        |  |      |       
|                             |                                 | (In thousands)                                    |       
|Assets:                      |                                 |                                                   |        |        |      |   |        |        |  |   |        |        |  |      |        |        |   |   |        |       
|                             | Student housing properties, net |                                                   | $      | 83,785 |      |   | $      | 86,388 |  |   | $      | 88,900 |  |      | $      | 49,357 |   |   | $      | 24,797 |  
|                             | Other assets, net               |                                                   |        | 5,089  |      |   |        | 5,536  |  |   |        | 5,315  |  |      |        | 4,884  |   |   |        | 4,339  |  
|                             |                                 |                                                   |        |        |      |   |        |        |  |   |        |        |  |      |       
|Total assets                 |                                 | $                                                 | 88,874 |        |      | $ | 91,924 |        |  | $ | 94,215 |        |  | $    | 54,241 |        |   | $ | 29,136 |       
|                             |                                 |                                                   |        |        |      |   |        |        |  |   |        |        |  |      |       
|Liabilities and equity:      |                                 |                                                   |        |        |      |   |        |        |  |   |        |        |  |      |        |        |   |   |        |       
|                             | Mortgage notes payable          |                                                   | $      | 81,111 |      |   | $      | 82,204 |  |   | $      | 82,959 |  |      | $      | 52,150 |   |   | $      | 32,465 |  
|                             | Other liabilities               |                                                   |        | 5,974  |      |   |        | 7,225  |  |   |        | 5,798  |  |      |        | 4,771  |   |   |        | 4,483  |  
|                             |                                 |                                                   |        |        |      |   |        |        |  |   |        |        |  |      |       
|Total liabilities            |                                 |                                                   | 87,085 |        |      |   | 89,429 |        |  |   | 88,757 |        |  |      | 56,921 |        |   |   | 36,948 |       
|                             | Minority interest               |                                                   |        |       |      |   |        |       |  |   |        |       |  |      |        |       |   |   |        |       |  
|                             | Equity (deficit)                |                                                   |        | 1,789  |      |   |        | 2,495  |  |   |        | 5,458  |  |      |        | (2,680 | ) |   |        | (7,812 | )
|                             |                                 |                                                   |        |        |      |   |        |        |  |   |        |        |  |      |       
|Total liabilities and equity |                                 | $                                                 | 88,874 |        |      | $ | 91,924 |        |  | $ | 94,215 |        |  | $    | 54,241 |        |   | $ | 29,136 |       
|                             |                                 |                                                   |        |        |      |   |        |        |  |   |        |        |  |      |       

29



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##### Table of Contents



OTHER DATA (UNAUDITED)


|                                  |                                                                                      |                                                     |   |        |      |  |   |        |   |  |      |         |   |      |   |         |   |  |   |        |  
|--------------------------------- | ------------------------------------------------------------------------------------ | --------------------------------------------------- | - | ------ | ---- |  | - | ------ | - |  | ---- | ------- | - | ---- | - | ------- | - |  | - | ------ | -
|                                  |                                                                                      | Year ended December 31 Historical-EDR Predecessor   |  
|                                  |                                                                                      |                                                     |  
|                                  |                                                                                      | 2004                                                |   |        | 2003 |  |   | 2002   |   |  | 2001 |         |   | 2000 |  
|                                  |                                                                                      |                                                     |   |        |      |  |   |        |   |  |      |         |   |      |  
|                                  |                                                                                      | (In thousands except selected property information) |  
|Funds from operations (FFO)(1):   |                                                                                      |                                                     |   |        |      |  |   |        |   |  |      |         |   |      |   |         |   |  |   |       
|                                  | Net income                                                                           |                                                     | $ | 758    |      |  | $ | 10     |   |  | $    | 2       |   |      | $ | 1,254   |   |  | $ | 830    |  
|                                  | Plus student housing property depreciation and amortization of
    lease intangibles |                                                     |   | 3,120  |      |  |   | 3,061  |   |  |      | 3,324   |   |      |   | 1,336   |   |  |   | 718    |  
|                                  |                                                                                      |                                                     |   |        |      |  |   |        |   |  |      |         |   |      |  
|                                  | Funds from operations                                                                |                                                     | $ | 3,878  |      |  | $ | 3,071  |   |  | $    | 3,326   |   |      | $ | 2,590   |   |  | $ | 1,548  |  
|                                  |                                                                                      |                                                     |   |        |      |  |   |        |   |  |      |         |   |      |  
|Cash flow information:            |                                                                                      |                                                     |   |        |      |  |   |        |   |  |      |         |   |      |   |         |   |  |   |       
|                                  | Net cash provided by operations                                                      |                                                     | $ | 3,118  |      |  | $ | 4,135  |   |  | $    | 3,992   |   |      | $ | 2,807   |   |  | $ | 2,296  |  
|                                  | Net cash used in investing                                                           |                                                     |   | (231   | )    |  |   | (751   | ) |  |      | (42,982 | ) |      |   | (25,939 | ) |  |   | (5,870 | )
|                                  | Net cash provided by (used in) financing                                             |                                                     | $ | (2,480 | )    |  | $ | (3,658 | ) |  | $    | 38,951  |   |      | $ | 23,296  |   |  | $ | 3,620  |  
|Selected property information(2): |                                                                                      |                                                     |   |        |      |  |   |        |   |  |      |         |   |      |   |         |   |  |   |       
|                                  | Units                                                                                |                                                     |   | 1,146  |      |  |   | 1,146  |   |  |      | 1,146   |   |      |   | 669     |   |  |   | 385    |  
|                                  | Beds                                                                                 |                                                     |   | 3,896  |      |  |   | 3,896  |   |  |      | 3,896   |   |      |   | 2,394   |   |  |   | 1,446  |  
|                                  | Occupancy(3)                                                                         |                                                     |   | 89.2   | %    |  |   | 85.1   | % |  |      | 87.6    | % |      |   | 87.8    | % |  |   | 82.6   | %
|                                  | Revenue per available bed(4)                                                         |                                                     | $ | 421    |      |  | $ | 406    |   |  | $    | 400     |   |      | $ | 465     |   |  | $ | 523    |  






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | As defined by the National Association of Real Estate Investment
    Trusts (NAREIT), FFO represents net income (loss)
    (computed in accordance with GAAP), excluding gains (or losses)
    from sales of property, plus real estate-related depreciation
    and amortization and after adjustments for unconsolidated
    partnerships and joint ventures. Adjustments for unconsolidated
    partnerships and joint ventures will be calculated to reflect
    funds from operations on the same basis. We present FFO because
    we consider it an important supplemental measure of our
    operating performance and believe it is frequently used by
    securities analysts, investors and other interested parties in
    the evaluation of REITs, many of which present FFO when
    reporting their results. FFO is intended to exclude GAAP
    historical cost depreciation and amortization of real estate and
    related assets, which assumes that the value of real estate
    diminishes ratably over time. Historically, however, real estate
    values have risen or fallen with market conditions. Because FFO
    excludes depreciation and amortization unique to real estate,
    gains and losses from property dispositions and extraordinary
    items, it provides a performance measure that, when compared
    year over year, reflects the impact to operations from trends in
    occupancy rates, rental rates, operating costs, development
    activities and interest costs, providing perspective not
    immediately apparent from net income.
|   
|(2) | The selected property information represents the seven
    properties owned by our Predecessor, which are NorthPointe, The
    Reserve at Athens, The Reserve at Clemson, Players Club, The
    Gables, College Station and University Towers.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   
|(3) | Average month-end occupancy rate for rolling twelve-month period.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   
|(4) | Revenue per available bed is equal to the total twelve-month
    rolling revenue divided by the total number of beds (including
    staff and model beds) divided by twelve.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

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|        |                                                                                           
|------- | ------------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis of Financial
    Condition and Results of Operations.

The following discussion should be read in conjunction with
the financial statements and notes thereto appearing elsewhere
in this report. Where appropriate, the following discussion
includes analysis of the effects of our IPO and the formation
transactions. We make statements in this section that are
forward-looking statements, see the section of this
Form 10-K report entitled Forward-Looking
Statements. Certain risk factors may cause our actual
results, performance or achievements to differ materially from
those expressed or implied by the following discussion. For a
discussion of such risk factors, see the sections of this
Form 10-K report entitled Business Risk Factors
and Forward-Looking Statements. All dollar amounts
in this discussion, except for per share data and operating
statistics, are in thousands.


Overview












| |                      
| | ---------------------
| | Our Business Segments





| |                        
| | -----------------------
| | Student Housing Leasing





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| |                                
| | -------------------------------
| | Third-Party Management Services





| |                                            
| | -------------------------------------------
| | Third-Party Development Consulting Services





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Trends and Outlook




| |                    
| | -------------------
| | Rents and Occupancy





| |                                                                          
| | -------------------------------------------------------------------------
| | Integration Costs Related to the Acquisition of Additional
    Properties





| |                                 
| | --------------------------------
| | General and Administrative Costs



Critical Accounting Policies




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| |                                            
| | -------------------------------------------
| | Student Housing Leasing Revenue Recognition







| |                                                                                
| | -------------------------------------------------------------------------------
| | Revenue and Cost Recognition of Third-Party Development
    Consulting Services







| |                                      
| | -------------------------------------
| | Student Housing Property Acquisitions

Business Combinations.


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| |                        
| | -----------------------
| | Repairs and Maintenance





| |                               
| | ------------------------------
| | Long Lived Assets  Impairment



Results of Operations




| |                                                                      
| | ---------------------------------------------------------------------
| | Comparison of years ended December 31, 2004 and
    December 31, 2003



|                            |                                             |                          |       |             |             |  |      |             |       |  |             |       |         |       |   |             |         |  |             |          |        |  |          |        |        |             |      |       |       |  |     |       |       |  |   |       |       |  |       |        |        | 
|--------------------------- | ------------------------------------------- | ------------------------ | ----- | ----------- | ----------- |  | ---- | ----------- | ----- |  | ----------- | ----- | ------- | ----- | - | ----------- | ------- |  | ----------- | -------- | ------ |  | -------- | ------ | ------ | ----------- | ---- | ----- | ----- |  | --- | ----- | ----- |  | - | ----- | ----- |  | ----- | ------ | ------ | 
|                            |                                             | 2004                     |       |             | 2003        | 
|                            |                                             |                          |       |             |             | 
|                            |                                             |                          |       | Third-Party |             |  |      |             |       |  | Third-Party |       |         |      
|                            |                                             | Student                  |       |             | Development |  |      | Third-Party |       |  |             |       | Student |       |   | Development |         |  | Third-Party |          |        | 
|                            |                                             | Housing                  |       |             | Consulting  |  |      | Management  |       |  |             |       | Housing |       |   | Consulting  |         |  | Management  |          |        | 
|                            |                                             | Leasing                  |       |             | Services    |  |      | Services    |       |  | Adjustments |       |         | Total |   |             | Leasing |  |             | Services |        |  | Services |        |        | Adjustments |      |       | Total | 
|                            |                                             |                          |       |             |             |  |      |             |       |  |             |       |         |       |   |             |         |  |             |          |        |  |          |        |        |             |      |       |       | 
|(In thousands)              |                                             |                          |       |             |             |  |      |             |       |  |             |       |         |       |   |             |         |  |            
|Revenues:                   |                                             |                          |       |             |             |  |      |             |       |  |             |       |         |       |   |             |         |  |             |          |        |  |          |        |        |             |      |       |       |  |     |       |       |  |   |       |       |  |       |       
|                            | Student housing leasing revenue             |                          | $     | 21,033      |             |  | $    |            |       |  | $           |      |         |       | $ |            |         |  | $           | 21,033   |        |  | $        | 19,974 |        |             | $    |      |       |  | $   |      |       |  | $ |      |       |  | $     | 19,974 |       
|                            | Third-party development consulting services |                          |       |            |             |  |      | 392         |       |  |             |      |         |       |   |            |         |  |             | 392      |        |  |          |       |        |             |      | 691   |       |  |     |      |       |  |   |      |       |  |       | 691    |       
|                            | Third-party management revenue              |                          |       |            |             |  |      |            |       |  |             | 1,326 |         |       |   |            |         |  |             | 1,326    |        |  |          |       |        |             |      |      |       |  |     | 1,026 |       |  |   |      |       |  |       | 1,026  |       
|                            | Intersegment revenues                       |                          |       |            |             |  |      |            |       |  |             | 973   |         |       |   | (973        | )       |  |             |         |        |  |          |       |        |             |      |      |       |  |     | 959   |       |  |   | (959  | )     |  |       |       |       
|                            | Operating expense reimbursements            |                          |       |            |             |  |      |            |       |  |             |      |         |       |   | 5,223       |         |  |             | 5,223    |        |  |          |       |        |             |      |      |       |  |     |      |       |  |   | 4,438 |       |  |       | 4,438  |       
|                            |                                             |                          |       |             |             |  |      |             |       |  |             |       |         |       |   |             |         |  |             |          |        |  |          |        |        |             |      |       |       | 
|                            |                                             | Total revenues           |       |             | 21,033      |  |      |             | 392   |  |             |       | 2,299   |       |   |             | 4,250   |  |             |          | 27,974 |  |          |        | 19,974 |             |      |       | 691   |  |     |       | 1,985 |  |   |       | 3,479 |  |       |        | 26,129 | 
|                            |                                             |                          |       |             |             |  |      |             |       |  |             |       |         |       |   |             |         |  |             |          |        |  |          |        |        |             |      |       |       | 
|Operating expenses:         |                                             |                          |       |             |             |  |      |             |       |  |             |       |         |       |   |             |         |  |             |          |        |  |          |        |        |             |      |       |       |  |     |       |       |  |   |       |       |  |       |       
|                            | Student housing leasing operations          |                          |       | 10,544      |             |  |      |            |       |  |             |      |         |       |   |            |         |  |             | 10,544   |        |  |          | 10,204 |        |             |      |      |       |  |     |      |       |  |   |      |       |  |       | 10,204 |       
|                            | General and administrative                  |                          |       |            |             |  |      | 1,329       |       |  |             | 2,216 |         |       |   |            |         |  |             | 3,545    |        |  |          |       |        |             |      | 1,245 |       |  |     | 2,029 |       |  |   |      |       |  |       | 3,274  |       
|                            | Intersegment expenses                       |                          |       | 973         |             |  |      |            |       |  |             |      |         |       |   | (973        | )       |  |             |         |        |  |          | 959    |        |             |      |      |       |  |     |      |       |  |   | (959  | )     |  |       |       |       
|                            | Reimbursable operating expenses             |                          |       |            |             |  |      |            |       |  |             |      |         |       |   | 5,223       |         |  |             | 5,223    |        |  |          |       |        |             |      |      |       |  |     |      |       |  |   | 4,438 |       |  |       | 4,438  |       
|                            |                                             |                          |       |             |             |  |      |             |       |  |             |       |         |       |   |             |         |  |             |          |        |  |          |        |        |             |      |       |       | 
|                            |                                             | Total operating expenses |       |             | 11,517      |  |      |             | 1,329 |  |             |       | 2,216   |       |   |             | 4,250   |  |             |          | 19,312 |  |          |        | 11,163 |             |      |       | 1,245 |  |     |       | 2,029 |  |   |       | 3,479 |  |       |        | 17,916 | 
|                            |                                             |                          |       |             |             |  |      |             |       |  |             |       |         |       |   |             |         |  |             |          |        |  |          |        |        |             |      |       |       | 
|Net operating income (loss) |                                             |                          | 9,516 |             |             |  | (937 | )           |       |  | 83          |       |         |       |  |             |         |  | 8,662       |          |        |  | 8,811    |        |        |             | (554 | )     |       |  | (44 | )     |       |  |  |       |       |  | 8,213 |       

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|                                              |                               |                              |     |             |             |   |       |             |   |   |             |   |         |   |   |             |   |   |             |       |       |          |     |       |             |   |       |   |   |   |     |   |   |   |   |   |   |   |     |       |       | 
|--------------------------------------------- | ----------------------------- | ---------------------------- | --- | ----------- | ----------- | - | ----- | ----------- | - | - | ----------- | - | ------- | - | - | ----------- | - | - | ----------- | ----- | ----- | -------- | --- | ----- | ----------- | - | ----- | - | - | - | --- | - | - | - | - | - | - | - | --- | ----- | ----- | 
|                                              |                               | 2004                         |     |             | 2003        |  
|                                              |                               |                              |     |             |             |  
|                                              |                               |                              |     | Third-Party |             |   |       |             |   |   | Third-Party |   |         |  
|                                              |                               | Student                      |     |             | Development |   |       | Third-Party |   |   |             |   | Student |   |   | Development |   |   | Third-Party |       |       |         
|                                              |                               | Housing                      |     |             | Consulting  |   |       | Management  |   |   |             |   | Housing |   |   | Consulting  |   |   | Management  |       |       |         
|                                              |                               | Leasing                      |     |             | Services    |   |       | Services    |   |   | Adjustments |   | Total   |   |   | Leasing     |   |   | Services    |       |       | Services |     |       | Adjustments |   | Total |  
|                                              |                               |                              |     |             |             |   |       |             |   |   |             |   |         |   |   |             |   |   |             |       |       |          |     |       |             |   |       |  
|(In thousands)                                |                               |                              |     |             |             |   |       |             |   |   |             |   |         |   |   |             |   |   |            
|Non-operating expenses:                       |                               |                              |     |             |             |   |       |             |   |   |             |   |         |   |   |             |   |   |             |       |       |          |     |       |             |   |       |   |   |   |     |   |   |   |   |   |   |   |     |      
|                                              | Depreciation and amortization |                              |     | 3,283       |             |   |       |            |   |   |             |  |         |   |   |            |   |   |             | 3,283 |       |          |     | 3,235 |             |   |       |  |   |   |     |  |   |   |   |  |   |   |     | 3,235 |      
|                                              | Interest expense              |                              |     | 5,623       |             |   |       |            |   |   |             |  |         |   |   |            |   |   |             | 5,623 |       |          |     | 5,597 |             |   |       |  |   |   |     |  |   |   |   |  |   |   |     | 5,597 |      
|                                              |                               |                              |     |             |             |   |       |             |   |   |             |   |         |   |   |             |   |   |             |       |       |          |     |       |             |   |       |   |   |  
|                                              |                               | Total non-operating expenses |     |             | 8,906       |   |       |             |  |   |             |   |        |   |   |             |  |   |             |       | 8,906 |          |     |       | 8,832       |   |       |   |  |   |     |   |  |   |   |   |  |   |     |       | 8,832 | 
|                                              |                               |                              |     |             |             |   |       |             |   |   |             |   |         |   |   |             |   |   |             |       |       |          |     |       |             |   |       |   |   |  
|Equity in earnings of unconsolidated entities |                               |                              |    |             |             |   | 1,002 |             |   |   |            |   |         |   |  |             |   |   | 1,002       |       |       |          |    |       |             |   | 629   |   |   |   |    |   |   |   |  |   |   |   | 629 |      
|                                              |                               |                              |     |             |             |   |       |             |   |   |             |   |         |   |   |             |   |   |             |       |       |          |     |       |             |   |       |   |   |  
|Net income (loss)                             |                               | $                            | 610 |             |             | $ | 65    |             |   | $ | 83          |   |         | $ |  |             |   | $ | 758         |       |       | $        | (21 | )     |             | $ | 75    |   |   | $ | (44 | ) |   | $ |  |   |   | $ | 10  |      
|                                              |                               |                              |     |             |             |   |       |             |   |   |             |   |         |   |   |             |   |   |             |       |       |          |     |       |             |   |       |   |   |  



| |                        
| | -----------------------
| | Student housing leasing







| |                                            
| | -------------------------------------------
| | Third-party development consulting services





| |                                
| | -------------------------------
| | Third-party management services





| |                           
| | --------------------------
| | General and administrative



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| |                                                                      
| | ---------------------------------------------------------------------
| | Comparison of years ended December 31, 2003 and
    December 31, 2002



|                                              |                                             |                              |       |             |                |   |      |             |       |   |             |       |         |       |   |             |         |   |             |          |        |   |          |        |        |             |     |       |       |   |     |       |       |   |   |       |       |   |       |        |        | 
|--------------------------------------------- | ------------------------------------------- | ---------------------------- | ----- | ----------- | -------------- | - | ---- | ----------- | ----- | - | ----------- | ----- | ------- | ----- | - | ----------- | ------- | - | ----------- | -------- | ------ | - | -------- | ------ | ------ | ----------- | --- | ----- | ----- | - | --- | ----- | ----- | - | - | ----- | ----- | - | ----- | ------ | ------ | 
|                                              |                                             | 2003                         |       |             | 2002           |  
|                                              |                                             |                              |       |             |                |  
|                                              |                                             |                              |       | Third-Party |                |   |      |             |       |   | Third-Party |       |         |      
|                                              |                                             | Student                      |       |             | Development    |   |      | Third-Party |       |   |             |       | Student |       |   | Development |         |   | Third-Party |          |        |  
|                                              |                                             | Housing                      |       |             | Consulting     |   |      | Management  |       |   |             |       | Housing |       |   | Consulting  |         |   | Management  |          |        |  
|                                              |                                             | Leasing                      |       |             | Services       |   |      | Services    |       |   | Adjustments |       |         | Total |   |             | Leasing |   |             | Services |        |   | Services |        |        | Adjustments |     |       | Total |  
|                                              |                                             |                              |       |             |                |   |      |             |       |   |             |       |         |       |   |             |         |   |             |          |        |   |          |        |        |             |     |       |       |  
|                                              |                                             | (In thousands)               |       |             | (In thousands) |  
|Revenues:                                     |                                             |                              |       |             |                |   |      |             |       |   |             |       |         |       |   |             |         |   |             |          |        |   |          |        |        |             |     |       |       |   |     |       |       |   |   |       |       |   |       |       
|                                              | Student housing leasing revenue             |                              | $     | 19,974      |                |   | $    |            |       |   | $           |      |         |       | $ |            |         |   | $           | 19,974   |        |   | $        | 19,139 |        |             | $   |      |       |   | $   |      |       |   | $ |      |       |   | $     | 19,139 |       
|                                              | Third-party development consulting services |                              |       |            |                |   |      | 691         |       |   |             |      |         |       |   |            |         |   |             | 691      |        |   |          |       |        |             |     | 1,444 |       |   |     |      |       |   |   |      |       |   |       | 1,444  |       
|                                              | Third-party management revenue              |                              |       |            |                |   |      |            |       |   |             | 1,026 |         |       |   |            |         |   |             | 1,026    |        |   |          |       |        |             |     |      |       |   |     | 784   |       |   |   |      |       |   |       | 784    |       
|                                              | Intersegment revenues                       |                              |       |            |                |   |      |            |       |   |             | 959   |         |       |   | (959        | )       |   |             |         |        |   |          |       |        |             |     |      |       |   |     | 924   |       |   |   | (924  | )     |   |       |       |       
|                                              | Operating expense reimbursements            |                              |       |            |                |   |      |            |       |   |             |      |         |       |   | 4,438       |         |   |             | 4,438    |        |   |          |       |        |             |     |      |       |   |     |      |       |   |   | 3,345 |       |   |       | 3,345  |       
|                                              |                                             |                              |       |             |                |   |      |             |       |   |             |       |         |       |   |             |         |   |             |          |        |   |          |        |        |             |     |       |       |  
|                                              |                                             | Total revenues               |       |             | 19,974         |   |      |             | 691   |   |             |       | 1,985   |       |   |             | 3,479   |   |             |          | 26,129 |   |          |        | 19,139 |             |     |       | 1,444 |   |     |       | 1,708 |   |   |       | 2,421 |   |       |        | 24,712 | 
|                                              |                                             |                              |       |             |                |   |      |             |       |   |             |       |         |       |   |             |         |   |             |          |        |   |          |        |        |             |     |       |       |  
|Operating expenses:                           |                                             |                              |       |             |                |   |      |             |       |   |             |       |         |       |   |             |         |   |             |          |        |   |          |        |        |             |     |       |       |   |     |       |       |   |   |       |       |   |       |       
|                                              | Student housing leasing operations          |                              |       | 10,204      |                |   |      |            |       |   |             |      |         |       |   |            |         |   |             | 10,204   |        |   |          | 9,333  |        |             |     |      |       |   |     |      |       |   |   |      |       |   |       | 9,333  |       
|                                              | General and administrative                  |                              |       |            |                |   |      | 1,245       |       |   |             | 2,029 |         |       |   |            |         |   |             | 3,274    |        |   |          |       |        |             |     | 1,359 |       |   |     | 1,762 |       |   |   |      |       |   |       | 3,121  |       
|                                              | Intersegment expenses                       |                              |       | 959         |                |   |      |            |       |   |             |      |         |       |   | (959        | )       |   |             |         |        |   |          | 924    |        |             |     |      |       |   |     |      |       |   |   | (924  | )     |   |       |       |       
|                                              | Reimbursable operating expenses             |                              |       |            |                |   |      |            |       |   |             |      |         |       |   | 4,438       |         |   |             | 4,438    |        |   |          |       |        |             |     |      |       |   |     |      |       |   |   | 3,345 |       |   |       | 3,345  |       
|                                              |                                             |                              |       |             |                |   |      |             |       |   |             |       |         |       |   |             |         |   |             |          |        |   |          |        |        |             |     |       |       |  
|                                              |                                             | Total operating expenses     |       |             | 11,163         |   |      |             | 1,245 |   |             |       | 2,029   |       |   |             | 3,479   |   |             |          | 17,916 |   |          |        | 10,257 |             |     |       | 1,359 |   |     |       | 1,762 |   |   |       | 2,421 |   |       |        | 15,799 | 
|                                              |                                             |                              |       |             |                |   |      |             |       |   |             |       |         |       |   |             |         |   |             |          |        |   |          |        |        |             |     |       |       |  
|Net operating income (loss)                   |                                             |                              | 8,811 |             |                |   | (554 | )           |       |   | (44         | )     |         |       |  |             |         |   | 8,213       |          |        |   | 8,882    |        |        |             | 85  |       |       |   | (54 | )     |       |   |  |       |       |   | 8,913 |       
|Non-operating expenses:                       |                                             |                              |       |             |                |   |      |             |       |   |             |       |         |       |   |             |         |   |             |          |        |   |          |        |        |             |     |       |       |   |     |       |       |   |   |       |       |   |       |       
|                                              | Depreciation and amortization               |                              |       | 3,235       |                |   |      |            |       |   |             |      |         |       |   |            |         |   |             | 3,235    |        |   |          | 3,492  |        |             |     |      |       |   |     |      |       |   |   |      |       |   |       | 3,492  |       
|                                              | Interest expense                            |                              |       | 5,597       |                |   |      |            |       |   |             |      |         |       |   |            |         |   |             | 5,597    |        |   |          | 5,547  |        |             |     |      |       |   |     |      |       |   |   |      |       |   |       | 5,547  |       
|                                              |                                             |                              |       |             |                |   |      |             |       |   |             |       |         |       |   |             |         |   |             |          |        |   |          |        |        |             |     |       |       |  
|                                              |                                             | Total non-operating expenses |       |             | 8,832          |   |      |             |      |   |             |       |        |       |   |             |        |   |             |          | 8,832  |   |          |        | 9,039  |             |     |       |      |   |     |       |      |   |   |       |      |   |       |        | 9,039  | 
|                                              |                                             |                              |       |             |                |   |      |             |       |   |             |       |         |       |   |             |         |   |             |          |        |   |          |        |        |             |     |       |       |  
|Equity in earnings of unconsolidated entities |                                             |                              |      |             |                |   | 629  |             |       |   |            |       |         |       |  |             |         |   | 629         |          |        |   |         |        |        |             | 128 |       |       |   |    |       |       |   |  |       |       |   | 128   |       
|                                              |                                             |                              |       |             |                |   |      |             |       |   |             |       |         |       |   |             |         |   |             |          |        |   |          |        |        |             |     |       |       |  
|Net income (loss)                             |                                             | $                            | (21   | )           |                | $ | 75   |             |       | $ | (44         | )     |         | $     |  |             |         | $ | 10          |          |        | $ | (157     | )      |        | $           | 213 |       |       | $ | (54 | )     |       | $ |  |       |       | $ | 2     |       
|                                              |                                             |                              |       |             |                |   |      |             |       |   |             |       |         |       |   |             |         |   |             |          |        |   |          |        |        |             |     |       |       |  



| |                        
| | -----------------------
| | Student housing leasing





37



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| |                                            
| | -------------------------------------------
| | Third-party development consulting services





| |                                
| | -------------------------------
| | Third-party management services





| |                              
| | -----------------------------
| | Depreciation and amortization





| |                                                                      
| | ---------------------------------------------------------------------
| | Comparison of years ended December 31, 2002 and
    December 31, 2001



|                            |                                             |                          |       |             |             |  |    |             |       |  |             |       |         |       |   |             |         |  |             |          |        |  |          |        |        |             |      |     |       |  |    |       |       |  |   |       |       |  |       |        |        | 
|--------------------------- | ------------------------------------------- | ------------------------ | ----- | ----------- | ----------- |  | -- | ----------- | ----- |  | ----------- | ----- | ------- | ----- | - | ----------- | ------- |  | ----------- | -------- | ------ |  | -------- | ------ | ------ | ----------- | ---- | --- | ----- |  | -- | ----- | ----- |  | - | ----- | ----- |  | ----- | ------ | ------ | 
|                            |                                             | 2002                     |       |             | 2001        | 
|                            |                                             |                          |       |             |             | 
|                            |                                             |                          |       | Third-Party |             |  |    |             |       |  | Third-Party |       |         |      
|                            |                                             | Student                  |       |             | Development |  |    | Third-Party |       |  |             |       | Student |       |   | Development |         |  | Third-Party |          |        | 
|                            |                                             | Housing                  |       |             | Consulting  |  |    | Management  |       |  |             |       | Housing |       |   | Consulting  |         |  | Management  |          |        | 
|                            |                                             | Leasing                  |       |             | Services    |  |    | Services    |       |  | Adjustments |       |         | Total |   |             | Leasing |  |             | Services |        |  | Services |        |        | Adjustments |      |     | Total | 
|                            |                                             |                          |       |             |             |  |    |             |       |  |             |       |         |       |   |             |         |  |             |          |        |  |          |        |        |             |      |     |       | 
|                            |                                             | (In thousands)           |      
|Revenues:                   |                                             |                          |       |             |             |  |    |             |       |  |             |       |         |       |   |             |         |  |             |          |        |  |          |        |        |             |      |     |       |  |    |       |       |  |   |       |       |  |       |       
|                            | Student housing leasing revenue             |                          | $     | 19,139      |             |  | $  |            |       |  | $           |      |         |       | $ |            |         |  | $           | 19,139   |        |  | $        | 13,084 |        |             | $    |    |       |  | $  |      |       |  | $ |      |       |  | $     | 13,084 |       
|                            | Third-party development consulting services |                          |       |            |             |  |    | 1,444       |       |  |             |      |         |       |   |            |         |  |             | 1,444    |        |  |          |       |        |             |      | 305 |       |  |    |      |       |  |   |      |       |  |       | 305    |       
|                            | Third-party management revenue              |                          |       |            |             |  |    |            |       |  |             | 784   |         |       |   |            |         |  |             | 784      |        |  |          |       |        |             |      |    |       |  |    | 767   |       |  |   |      |       |  |       | 767    |       
|                            | Intersegment revenues                       |                          |       |            |             |  |    |            |       |  |             | 924   |         |       |   | (924        | )       |  |             |         |        |  |          |       |        |             |      |    |       |  |    | 605   |       |  |   | (605  | )     |  |       |       |       
|                            | Operating expense reimbursements            |                          |       |            |             |  |    |            |       |  |             |      |         |       |   | 3,345       |         |  |             | 3,345    |        |  |          |       |        |             |      |    |       |  |    |      |       |  |   | 2,947 |       |  |       | 2,947  |       
|                            |                                             |                          |       |             |             |  |    |             |       |  |             |       |         |       |   |             |         |  |             |          |        |  |          |        |        |             |      |     |       | 
|                            |                                             | Total revenues           |       |             | 19,139      |  |    |             | 1,444 |  |             |       | 1,708   |       |   |             | 2,421   |  |             |          | 24,712 |  |          |        | 13,084 |             |      |     | 305   |  |    |       | 1,372 |  |   |       | 2,342 |  |       |        | 17,103 | 
|                            |                                             |                          |       |             |             |  |    |             |       |  |             |       |         |       |   |             |         |  |             |          |        |  |          |        |        |             |      |     |       | 
|Operating expenses:         |                                             |                          |       |             |             |  |    |             |       |  |             |       |         |       |   |             |         |  |             |          |        |  |          |        |        |             |      |     |       |  |    |       |       |  |   |       |       |  |       |       
|                            | Student housing leasing operations          |                          |       | 9,333       |             |  |    |            |       |  |             |      |         |       |   |            |         |  |             | 9,333    |        |  |          | 6,298  |        |             |      |    |       |  |    |      |       |  |   |      |       |  |       | 6,298  |       
|                            | General and administrative                  |                          |       |            |             |  |    | 1,359       |       |  |             | 1,762 |         |       |   |            |         |  |             | 3,121    |        |  |          |       |        |             |      | 799 |       |  |    | 1,296 |       |  |   |      |       |  |       | 2,095  |       
|                            | Intersegment expenses                       |                          |       | 924         |             |  |    |            |       |  |             |      |         |       |   | (924        | )       |  |             |          |        |  |          | 605    |        |             |      |    |       |  |    |      |       |  |   | (605  | )     |  |       |        |       
|                            | Reimbursable operating expenses             |                          |       |            |             |  |    |            |       |  |             |      |         |       |   | 3,345       |         |  |             | 3,345    |        |  |          |       |        |             |      |    |       |  |    |      |       |  |   | 2,947 |       |  |       | 2,947  |       
|                            |                                             |                          |       |             |             |  |    |             |       |  |             |       |         |       |   |             |         |  |             |          |        |  |          |        |        |             |      |     |       | 
|                            |                                             | Total operating expenses |       |             | 10,257      |  |    |             | 1,359 |  |             |       | 1,762   |       |   |             | 2,421   |  |             |          | 15,799 |  |          |        | 6,903  |             |      |     | 799   |  |    |       | 1,296 |  |   |       | 2,342 |  |       |        | 11,340 | 
|                            |                                             |                          |       |             |             |  |    |             |       |  |             |       |         |       |   |             |         |  |             |          |        |  |          |        |        |             |      |     |       | 
|Net operating income (loss) |                                             |                          | 8,882 |             |             |  | 85 |             |       |  | (54         | )     |         |       |  |             |         |  | 8,913       |          |        |  | 6,181    |        |        |             | (494 | )   |       |  | 76 |       |       |  |  |       |       |  | 5,763 |       

38



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|                                              |                               |                              |      |             |             |   |     |             |   |   |             |   |         |   |   |             |   |   |             |       |       |          |       |       |             |   |       |   |   |   |    |   |   |   |   |   |   |  |       |       |       | 
|--------------------------------------------- | ----------------------------- | ---------------------------- | ---- | ----------- | ----------- | - | --- | ----------- | - | - | ----------- | - | ------- | - | - | ----------- | - | - | ----------- | ----- | ----- | -------- | ----- | ----- | ----------- | - | ----- | - | - | - | -- | - | - | - | - | - | - |  | ----- | ----- | ----- | 
|                                              |                               | 2002                         |      |             | 2001        |  
|                                              |                               |                              |      |             |             |  
|                                              |                               |                              |      | Third-Party |             |   |     |             |   |   | Third-Party |   |         |  
|                                              |                               | Student                      |      |             | Development |   |     | Third-Party |   |   |             |   | Student |   |   | Development |   |   | Third-Party |       |       |         
|                                              |                               | Housing                      |      |             | Consulting  |   |     | Management  |   |   |             |   | Housing |   |   | Consulting  |   |   | Management  |       |       |         
|                                              |                               | Leasing                      |      |             | Services    |   |     | Services    |   |   | Adjustments |   | Total   |   |   | Leasing     |   |   | Services    |       |       | Services |       |       | Adjustments |   | Total |  
|                                              |                               |                              |      |             |             |   |     |             |   |   |             |   |         |   |   |             |   |   |             |       |       |          |       |       |             |   |       |  
|                                              |                               | (In thousands)               |     
|Non-operating expenses:                       |                               |                              |      |             |             |   |     |             |   |   |             |   |         |   |   |             |   |   |             |       |       |          |       |       |             |   |       |   |   |   |    |   |   |   |   |   |   |  |       |      
|                                              | Depreciation and amortization |                              |      | 3,492       |             |   |     |            |   |   |             |  |         |   |   |            |   |   |             | 3,492 |       |          |       | 1,457 |             |   |       |  |   |   |    |  |   |   |   |  |   |  |       | 1,457 |      
|                                              | Interest expense              |                              |      | 5,547       |             |   |     |            |   |   |             |  |         |   |   |            |   |   |             | 5,547 |       |          |       | 3,315 |             |   |       |  |   |   |    |  |   |   |   |  |   |  |       | 3,315 |      
|                                              |                               |                              |      |             |             |   |     |             |   |   |             |   |         |   |   |             |   |   |             |       |       |          |       |       |             |   |       |   |   |  
|                                              |                               | Total non-operating expenses |      |             | 9,039       |   |     |             |  |   |             |   |        |   |   |             |  |   |             |       | 9,039 |          |       |       | 4,772       |   |       |   |  |   |    |   |  |   |   |   |  |  |       |       | 4,772 | 
|                                              |                               |                              |      |             |             |   |     |             |   |   |             |   |         |   |   |             |   |   |             |       |       |          |       |       |             |   |       |   |   |  
|Equity in earnings of unconsolidated entities |                               |                              |     |             |             |   | 128 |             |   |   |            |   |         |   |  |             |   |   | 128         |       |       |          |      |       |             |   | 263   |   |   |   |   |   |   |   |  |   |   |  | 263   |      
|                                              |                               |                              |      |             |             |   |     |             |   |   |             |   |         |   |   |             |   |   |             |       |       |          |       |       |             |   |       |   |   |  
|Net income (loss)                             |                               | $                            | (157 | )           |             | $ | 213 |             |   | $ | (54         | ) |         | $ |  |             |   | $ | 2           |       |       | $        | 1,409 |       |             | $ | (231  | ) |   | $ | 76 |   |   | $ |  |   |   |  | 1,254 |      
|                                              |                               |                              |      |             |             |   |     |             |   |   |             |   |         |   |   |             |   |   |             |       |       |          |       |       |             |   |       |   |   |  



| |                        
| | -----------------------
| | Student housing leasing





| |                                            
| | -------------------------------------------
| | Third-party development consulting services





| |                                
| | -------------------------------
| | Third-party management services





| |                              
| | -----------------------------
| | Depreciation and amortization





| |                 
| | ----------------
| | Interest expense



39



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Liquidity and Capital Resources




| |                                           
| | ------------------------------------------
| | Liquidity outlook and capital requirements













| |                               
| | ------------------------------
| | Recurring capital expenditures



|                                     |  |                               |         |  |      |   |         |      |  |   |         | 
|------------------------------------ |  | ----------------------------- | ------- |  | ---- | - | ------- | ---- |  | - | ------- | 
|                                     |  | As of and for the Years Ended |        
|                                     |  | December 31,                  |        
|                                     |  |                               |        
|                                     |  | 2004                          |         |  | 2003 |   |         | 2002 | 
|                                     |  |                               |         |  |      |   |         |      | 
|Total units                          |  |                               | 895     |  |      |   | 895     |      |  |   | 895     | 
|Total beds                           |  |                               | 2,943   |  |      |   | 2,943   |      |  |   | 2,943   | 
|Total recurring capital expenditures |  | $                             | 166,363 |  |      | $ | 184,913 |      |  | $ | 203,754 | 
|Average per unit                     |  | $                             | 185.88  |  |      | $ | 206.61  |      |  | $ | 227.66  | 
|Average per bed                      |  | $                             | 56.53   |  |      | $ | 62.83   |      |  | $ | 69.23   | 








40



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| |                             
| | ----------------------------
| | Pre-development expenditures



Commitments




|                                          |  |                |       |  |       |   |        |       |  |   |         |  |  |       |       |  |  |   |        | 
|----------------------------------------- |  | -------------- | ----- |  | ----- | - | ------ | ----- |  | - | ------- |  |  | ----- | ----- |  |  | - | ------ | 
|                                          |  | Less than      |       |  | 1-3   |   |        | 3-5   |  |   | After 5 |  |  |      
|                                          |  | 1 Year         |       |  | Years |   |        | Years |  |   | Years   |  |  | Total |      
|                                          |  |                |       |  |       |   |        |       |  |   |         |  |  |       |      
|                                          |  | (In thousands) |      
|Contractual Obligations:                  |  |                |       |  |       |   |        |       |  |   |         |  |  |       |       |  |  |   |        | 
|Long-Term Debt Obligations(1)             |  | $              | 1,186 |  |       | $ | 50,902 |       |  | $ | 24,789  |  |  | $     | 4,234 |  |  | $ | 81,111 | 
|Contractual Fixed Interest Obligations(2) |  |                | 5,511 |  |       |   | 8,130  |       |  |   | 1,417   |  |  |       | 865   |  |  |   | 15,923 | 
|Operating Lease Obligations(3)            |  |                | 348   |  |       |   | 692    |       |  |   | 441     |  |  |       |      |  |  |   | 1,481  | 
|Capital Reserve Obligations(4)            |  |                | 280   |  |       |   | 447    |       |  |   | 64      |  |  |       | 55    |  |  |   | 846    | 
|                                          |  |                |       |  |       |   |        |       |  |   |         |  |  |       |      
|Total                                     |  | $              | 7,325 |  |       | $ | 60,171 |       |  | $ | 26,711  |  |  | $     | 5,154 |  |  | $ | 99,361 | 
|                                          |  |                |       |  |       |   |        |       |  |   |         |  |  |       |      






|    |                                                                                                                                                   
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Includes required monthly principal amortization and amounts due
    at maturity on first mortgage debt secured by student housing
    properties.
|   
|(2) | Includes contractual fixed rate interest payments.                                                                                                
|   
|(3) | Includes future minimum lease commitments under operating lease
    obligations.                                                                  
|   
|(4) | Includes future annual contributions to the capital reserve as
    required by certain mortgage debt.                                             

Long-Term Indebtedness




|           |  |   |         | 
|---------- |  | - | ------- | 
|Year       |  |  
|           |  |  
|2005       |  | $ | 781     | 
|2006       |  |   | 2,308   | 
|2007       |  |   | 60,575  | 
|2008       |  |   | 26,881  | 
|2009       |  |   | 182,993 | 
|Thereafter |  |   | 4,207   | 
|           |  |   |        
|Total      |  | $ | 277,745 | 
|           |  |   |        



41



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##### Table of Contents





Off-Balance Sheet Arrangements




Funds From Operations








|                                                                                     |  |                         |       |  |      |   |       |      |  |   |       | 
|------------------------------------------------------------------------------------ |  | ----------------------- | ----- |  | ---- | - | ----- | ---- |  | - | ----- | 
|                                                                                     |  | Year Ended December 31, |      
|                                                                                     |  |                         |      
|                                                                                     |  | 2004                    |       |  | 2003 |   |       | 2002 | 
|                                                                                     |  |                         |       |  |      |   |       |      | 
|                                                                                     |  | (In thousands)          |      
|Net income                                                                           |  | $                       | 758   |  |      | $ | 10    |      |  | $ | 2     | 
|Plus student housing property depreciation and amortization of
    lease intangibles |  |                         | 3,120 |  |      |   | 3,061 |      |  |   | 3,324 | 
|                                                                                     |  |                         |       |  |      |   |       |      | 
|Funds from operations                                                                |  | $                       | 3,878 |  |      | $ | 3,071 |      |  | $ | 3,326 | 
|                                                                                     |  |                         |       |  |      |   |       |      | 

Inflation




42



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##### Table of Contents



Recent accounting pronouncements






Share Based
Payment,







|         |                                                                
|-------- | ---------------------------------------------------------------
|Item 7A. | Quantitative and Qualitative Disclosures About Market
    Risk.



43



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##### Table of Contents








|        |                                             
|------- | --------------------------------------------
|Item 8. | Financial Statements and Supplementary Data.








|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 9. | Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure.








|         |                         
|-------- | ------------------------
|Item 9A. | Controls and Procedures.










|         |                   
|-------- | ------------------
|Item 9B. | Other Information.



PART III







|         |                                                    
|-------- | ---------------------------------------------------
|Item 10. | Directors and Executive Officers of the Registrant.








|         |                        
|-------- | -----------------------
|Item 11. | Executive Compensation.








|         |                                                                                                    
|-------- | ---------------------------------------------------------------------------------------------------
|Item 12. | Security Ownership of Certain Beneficial Owners and
    Management and Related Stockholder Matters.








|         |                                                
|-------- | -----------------------------------------------
|Item 13. | Certain Relationships and Related Transactions.








|         |                                        
|-------- | ---------------------------------------
|Item 14. | Principal Accounting Fees and Services.



44



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##### Table of Contents



PART IV







|         |                                            
|-------- | -------------------------------------------
|Item 15. | Exhibits and Financial Statement Schedules.





| |                        
| | -----------------------
| | 1. Financial Statements



| |                                                                                                                               
| | ------------------------------------------------------------------------------------------------------------------------------
| | The list of the financial statements filed as part of this
    Annual Report on Form 10-K is set forth on page F-1
    herein.



| |                                 
| | --------------------------------
| | 2. Financial Statement Schedules



| |                                                                                       
| | --------------------------------------------------------------------------------------
| | All schedules required are included in the financial statements
    and notes thereto.



| |            
| | -----------
| | 3. Exhibits



| |                                                                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The list of exhibits filed as part of this Annual Report on
    Form 10-K is submitted in the Exhibit Index following
    the financial statements in response to Item 601 of
    Regulation S-K.





| |                                                                                                                      
| | ---------------------------------------------------------------------------------------------------------------------
| | The exhibits filed in response to Item 601 of
    Regulation S-K are listed on the Exhibit Index
    attached hereto.



45



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##### Table of Contents






SIGNATURES






| |                                 
| | --------------------------------
| | Education Realty Trust,
    Inc.



| |     |                  
| | --- | -----------------
| | By: | /s/ Paul O. Bower

| |                                       
| | --------------------------------------
| |                                       
| | Paul O. Bower                         
| | President, Chief Executive Officer    
| | and Chairman of the Board of Directors





|                                                                                                                                                         |  |                |  | 
|-------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------- |  | 
|                                                                                                                                                        
|/s/ Paul O. BowerPaul
    O. BowerPresident, Chief Executive Officer and
    Chairman of the Board of Directors
    (Principal Executive Officer)        |  | March 31, 2005
|                                                                                                                                                        
|/s/ Randall H. BrownRandall
    H. BrownExecutive Vice President, Chief Financial
    Officer, Treasurer and Secretary
    (Principal Financial Officer) |  | March 31, 2005
|                                                                                                                                                        
|/s/ J. Drew KoesterJ.
    Drew KoesterVice President and Chief Accounting Officer
    (Principal Accounting Officer)                                     |  | March 31, 2005
|                                                                                                                                                        
|/s/ Monte J. BarrowMonte
    J. BarrowDirector                                                                                                           |  | March 31, 2005
|                                                                                                                                                        
|/s/ William J. Cahill, IIIWilliam
    J. Cahill, IIIDirector                                                                                             |  | March 31, 2005
|                                                                                                                                                        
|/s/ Randall L. ChurcheyRandall
    L. ChurcheyDirector                                                                                                   |  | March 31, 2005
|                                                                                                                                                        
|/s/ John L. FordJohn
    L. FordDirector                                                                                                                 |  | March 31, 2005

46



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INDEX TO FINANCIAL STATEMENTS


|                                                                                                                                                                                                             |  |      |      | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ---- | ---- | 
|                                                                                                                                                                                                             |  | Page |     
|                                                                                                                                                                                                             |  |      |     
|Education Realty Trust, Inc.                                                                                                                                                                                 |  |      |      | 
|Report of independent registered public
    accounting firm                                                                                                                                                  |  |      | F-2  | 
|Consolidated balance sheet as of
    December 31, 2004                                                                                                                                                       |  |      | F-3  | 
|Consolidated statement of operations for
    the period July 12, 2004 (date of formation) through
    December 31, 2004                                                                                      |  |      | F-4  | 
|Consolidated statement of changes in
    shareholders equity for the period July 12, 2004
    (date of formation) through December 31, 2004                                                                 |  |      | F-5  | 
|Consolidated statement of cash flows for
    the period July 12, 2004 (date of formation) through
    December 31, 2004                                                                                      |  |      | F-6  | 
|Notes to consolidated financial
    statements                                                                                                                                                               |  |      | F-7  | 
|                                                                                                                                                                                                            
|The Education Realty Trust Predecessor Entities                                                                                                                                                              |  |      |      | 
|Report of independent registered public
    accounting firm                                                                                                                                                  |  |      | F-12 | 
|Combined balance sheets as of
    December 31, 2004 and 2003                                                                                                                                                 |  |      | F-13 | 
|Combined statements of operations for the
    years ended December 31, 2004, 2003 and 2002                                                                                                                   |  |      | F-14 | 
|Combined statements of changes in equity
    for the years ended December 31, 2004, 2003, and 2002                                                                                                           |  |      | F-15 | 
|Combined statements of cash flows for the
    years ended December 31, 2004, 2003 and 2002                                                                                                                   |  |      | F-16 | 
|Notes to combined financial statements                                                                                                                                                                       |  |      | F-17 | 
|                                                                                                                                                                                                            
|National Development/ Allen & OHara CUPA,
    LLC                                                                                                                                                           |  |      |      | 
|Report of independent registered public
    accounting firm                                                                                                                                                  |  |      | F-32 | 
|Balance sheets as of December 31, 2004
    and 2003                                                                                                                                                          |  |      | F-33 | 
|Statements of operations for the year ended
    December 31, 2004 and the period from April 1, 2003
    (date operations commenced) to December 31, 2003                                                     |  |      | F-34 | 
|Statements of changes in members
    equity (deficit) for the year ended December 31, 2004
    and the period from April 1, 2003 (date operations
    commenced) to December 31, 2003                       |  |      | F-35 | 
|Statements of cash flows for the year ended
    December 31, 2004 and the period from April 1, 2003
    (date operations commenced) to December 31, 2003                                                     |  |      | F-36 | 
|Notes to financial statements                                                                                                                                                                                |  |      | F-37 | 
|                                                                                                                                                                                                            
|National Development/ Allen & OHara Clarion,
    LLC                                                                                                                                                        |  |      |      | 
|Report of independent registered public
    accounting firm                                                                                                                                                  |  |      | F-40 | 
|Balance sheets as of December 31, 2004
    and 2003 (2003, unaudited)                                                                                                                                        |  |      | F-41 | 
|Statements of operations for the year ended
    December 31, 2004 and the period from September 1,
    2003 (date operations commenced) to December 31, 2003 (2003
    unaudited)                            |  |      | F-42 | 
|Statements of changes in members
    equity (deficit) for the year ended December 31, 2004
    and the period from September 1, 2003 (date operations
    commenced) to December 31, 2003 (2003, unaudited) |  |      | F-43 | 
|Statements of cash flows for the year ended
    December 31, 2004 and the period from September 1,
    2003 (date operations commenced) to December 31, 2003
    (2003, unaudited)                           |  |      | F-44 | 
|Notes to financial statements                                                                                                                                                                                |  |      | F-45 | 
|                                                                                                                                                                                                            
|National Development/ Allen & OHara Lock
    Haven, LLC                                                                                                                                                     |  |      |      | 
|Report of independent registered public
    accounting firm                                                                                                                                                  |  |      | F-48 | 
|Balance sheets as of December 31, 2004
    and 2003 (2003, unaudited)                                                                                                                                        |  |      | F-49 | 
|Statements of operations for the year ended
    December 31, 2004 and the period from July 1, 2003
    (date operations commenced) to December 31, 2003 (2003,
    unaudited)                                |  |      | F-50 | 
|Statements of changes in members
    equity (deficit) for the year ended December 31, 2004
    and the period from July 1, 2003 (date operations
    commenced) to December 31, 2003 (2003, unaudited)      |  |      | F-51 | 
|Statements of cash flows for the year ended
    December 31, 2004 and the period from July 1, 2003
    (date operations commenced) to December 31, 2003 (2003,
    unaudited)                                |  |      | F-52 | 
|Notes to financial statements                                                                                                                                                                                |  |      | F-53 | 

F-1



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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM












Deloitte &
Touche LLP






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##### Table of Contents



EDUCATION REALTY TRUST, INC.





CONSOLIDATED BALANCE SHEET


December 31, 2004


(In thousands)


|                                     |                                                                                                       |  |   |       |  
|------------------------------------ | ----------------------------------------------------------------------------------------------------- |  | - | ----- | -
|ASSETS                              
|                                     | Cash                                                                                                  |  | $ | 1     |  
|                                     | Deferred costs                                                                                        |  |   | 3,790 |  
|                                     |                                                                                                       |  |  
|                                     | Total current assets                                                                                  |  | $ | 3,791 |  
|                                     |                                                                                                       |  |  
|LIABILITIES AND SHAREHOLDERS EQUITY
|                                     | Accounts payable to the promoter                                                                      |  | $ | 3,515 |  
|                                     | Note payable                                                                                          |  |   | 497   |  
|                                     |                                                                                                       |  |  
|                                     | Total current liabilities                                                                             |  |   | 4,012 |  
|                                     |                                                                                                       |  |  
|                                     | Common shares, $0.01 par value, 200,000,000 shares authorized,
    100 shares issued and outstanding  |  |   |      |  
|                                     | Preferred shares, $0.01 par value, 50,000,000 shares authorized,
    no shares issued and outstanding |  |   |      |  
|                                     | Additional paid-in-capital                                                                            |  |   | 1     |  
|                                     | Accumulated loss                                                                                      |  |   | (222  | )
|                                     |                                                                                                       |  |  
|                                     | Total shareholders equity                                                                            |  |   | (221  | )
|                                     |                                                                                                       |  |  
|                                     | Total liabilities and shareholders equity                                                            |  | $ | 3,791 |  
|                                     |                                                                                                       |  |  

See accompanying notes to consolidated financial
statements.


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EDUCATION REALTY TRUST, INC.





CONSOLIDATED STATEMENT OF OPERATIONS


For the period July 12, 2004 (date of formation) through
December 31, 2004


(In thousands, except for share and per share information)


|                                              |  |   |        |  
|--------------------------------------------- |  | - | ------ | -
|Total revenues                                |  | $ |       |  
|Total operating expenses                      |  |   | 201    |  
|                                              |  |   |       
|Operating loss                                |  |   | (201   | )
|Interest expense                              |  |   | 21     |  
|                                              |  |   |       
|Net loss                                      |  | $ | (222   | )
|                                              |  |   |       
|                                             
|Net loss per share (basic and diluted)        |  | $ | (2,220 | )
|                                              |  |   |       
|Weighted average number of shares outstanding |  |   | 100    |  
|                                              |  |   |       

See accompanying notes to consolidated financial
statements.


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EDUCATION REALTY TRUST, INC.





CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS
EQUITY


For the period July 12, 2004 (date of formation) through
December 31, 2004


(In thousands)


|                                                                    |  |               |      |  
|------------------------------------------------------------------- |  | ------------- | ---- | -
|                                                                    |  | Shareholders |     
|                                                                    |  | Deficit       |     
|                                                                    |  |               |     
|Contributed capital on July 12, 2004                                |  | $             | 1    |  
|Net loss for the period July 12, 2004 through
    December 31, 2004 |  |               | (222 | )
|                                                                    |  |               |     
|Shareholder deficit, December 31, 2004                              |  | $             | (221 | )
|                                                                    |  |               |     

See accompanying notes to consolidated financial
statements.


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EDUCATION REALTY TRUST, INC.





CONSOLIDATED STATEMENT OF CASH FLOWS


For the period July 12, 2004 (date of formation) through
December 31, 2004


(In thousands)


|                                                  |                                           |   |        |      |  
|------------------------------------------------- | ----------------------------------------- | - | ------ | ---- | -
|Operating activities                              |                                           |   |        |     
|Net loss                                          |                                           | $ | (222   | )   
|                                                  |                                           |   |       
|                                                  | Net cash used in operating activities     |   |        | (222 | )
|                                                  |                                           |   |       
|Financing activities:                             |                                           |   |        |     
|Borrowings from the promoter                      |                                           |   | 3,515  |     
|Deferred costs                                    |                                           |   | (3,790 | )   
|Borrowings under note payable agreement           |                                           |   | 497    |     
|                                                  |                                           |   |       
|                                                  | Net cash provided by financing activities |   |        | 222  |  
|                                                  |                                           |   |       
|Net change in cash                                |                                           |   |       |     
|Cash, beginning of period                         |                                           |   | 1      |     
|                                                  |                                           |   |       
|Cash, end of period                               |                                           | $ | 1      |     
|                                                  |                                           |   |       
|Supplemental disclosure of cash flow information: |                                           |   |        |     
|Interest paid                                     |                                           | $ | 21     |     
|                                                  |                                           |   |       

See accompanying notes to consolidated financial
statements.


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##### Table of Contents



EDUCATION REALTY TRUST, INC.





NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


For the period July 12, 2004 (date of formation) through
December 31, 2004


(Dollars in thousands, except share data)




|   |                                         
|-- | ----------------------------------------
|1. | Organization and description of business













|   |                                        
|-- | ---------------------------------------
|2. | The offering and formation transactions





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##### Table of Contents



EDUCATION REALTY TRUST, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The Promoter and certain members of management contributed their
    interests in Allen & OHara Education Services,
    LLC (AOES) in exchange for $12,400 of units in the
    Operating Partnership. AOES converted to a corporation and
    elected to be treated as a taxable REIT subsidiary.                                                                                                                                                                                                                                           
|
| |  | The Operating Partnership acquired all of the interests in
    Education Properties Trust, LLC (EPT) from
    Allen & OHara Educational Properties, LLC and
    unaffiliated investors for $26,915 in cash, $1,341 in units in
    the Operating Partnership and the assumption of debt totaling
    $50,134. As a result EPT became a wholly owned single member LLC
    subsidiary of the Operating Partnership.                                                                                                                          
|
| |  | The current owners of the Gables Apartments contributed their
    interests in the student housing property to a newly formed
    Delaware limited partnership referred to as EDR BG, LP in
    exchange for all the limited partnership interests of EDR BG LP.
    The Operating Partnership acquired all of the ownership
    interests in EDR BG LP for $1,113 in cash, $58 in units in
    the Operating Partnership and the assumption of debt totaling
    $4,552. The Operating Partnership owns all of the interests in
    EDR BG LP.
|
| |  | C Station LLC merged into a newly formed Delaware LLC, EDR
    C Station LLC, which is a wholly owned subsidiary of the
    Operating Partnership. The interests were contributed in
    exchange for the issuance of $229 in units in the Operating
    Partnership and the assumption of debt and notes payable to the
    Promoter totaling $2,477.                                                                                                                                                                                         
|
| |  | The University Towers Partnership acquired a 100% interest in
    the student housing property referred to as University Towers
    and in turn was acquired for $8,864 in cash, $4,316 in units and
    the assumption of debt totaling $24,371.                                                                                                                                                                                                                                                                                              









|   |                                           
|-- | ------------------------------------------
|3. | Summary of significant accounting policies



| |                      
| | ---------------------
| | Basis of presentation



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##### Table of Contents



EDUCATION REALTY TRUST, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






| |                 
| | ----------------
| | Use of estimates





| |                   
| | ------------------
| | Earnings per share

Earnings Per Share.




| |                                 
| | --------------------------------
| | Recent accounting pronouncements

Share Based
Payment,




|   |             
|-- | ------------
|4. | Note payable







|   |                              
|-- | -----------------------------
|5. | Commitments and contingencies



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EDUCATION REALTY TRUST, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






|   |                  
|-- | -----------------
|6. | Subsequent events





| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The Trust adopted the 2004 Incentive Plan (the Plan)
    effective upon the closing of the Offering. The Plan provides
    for the grant of stock options, restricted stock units, stock
    appreciation rights, other stock-based incentive awards, and
    profits interest units to employees, directors and other key
    persons providing services to the Company. In January 2005, the
    Trust issued 174,000 shares of restricted stock under the
    Plan, which will vest ratably over five years. Additionally,
    simultaneous with the completion of the Offering, the Trust
    granted 220,000 of profits interest units that vested
    immediately.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|
| |  | Our Operating Partnership obtained a $75 million revolving
    credit facility on January 31, 2005 from JPMorgan Chase
    Bank, N.A. and UBS Loan Finance LLC as co-lead managers.
    Those entities are affiliates of J.P. Morgan Securities
    Inc. and UBS Securities LLC, which were underwriters of our
    initial public offering. The Trust will serve as the guarantor
    for any funds borrowed by our Operating Partnership under the
    credit facility. The Operating Partnership may increase the size
    of the revolving credit facility to a maximum of
    $125 million, subject to customary conditions. The
    revolving credit facility is initially secured by
    cross-collateralized mortgages on our student housing
    properties. The facility has a term of three years and matures
    on January 31, 2008, provided that our Operating
    Partnership may extend the maturity date for one year subject to
    certain conditions. Additionally, our revolving credit facility
    contains customary affirmative and negative covenants and also
    contains financial covenants that, among other things, require
    us and our subsidiaries to maintain certain minimum ratios of
    EBITDA (earnings before payment or charges of
    interest, taxes, depreciation, amortization or extraordinary
    items) as compared to interest expense and fixed charges.
    Additionally, after December 31, 2005, we will be
    prohibited from making distributions that exceed 95% of our
    funds from operations over the previous four consecutive fiscal
    quarters, except to the extent necessary to maintain our status
    as a REIT. The financial covenants also include consolidated net
    worth and leverage ratio tests.
|
| |  | The Trust used a portion of the IPO proceeds to paid off all
    outstanding balances($497 at December 31, 2004) under the
    Business Loan Agreement it had entered into on August 13,
    2004.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

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##### Table of Contents



EDUCATION REALTY TRUST, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |   |                                                                                                                                           
| | - | ------------------------------------------------------------------------------------------------------------------------------------------
| |  | The Operating Partnership has acquired or entered binding
    purchase agreements to acquire the following student housing
    properties:

|                              |  |                               |  |                                                                                                      
|----------------------------- |  | ----------------------------- |  | -----------------------------------------------------------------------------------------------------
|Property                      |  | Primary University Served     |  | Purchase price                                                                                       
|                              |  |                               |  |                                                                                                      
|Campus Creek                  |  | The University of Mississippi |  | Acquired on February 22, 2005 for $24 million cash                                                   
|Sterling University Riverside |  | University of South Carolina  |  | Acquired on March 17, 2005 for $13.7 million
    (including assumption of $11.2 million in debt)     
|University Courtyard          |  | Middle Tennessee State Univ.  |  | Binding agreement for $20.9 million cash                                                             
|Campus Lodge                  |  | University of Florida         |  | Binding agreement for $44.9 million (including assumption
    of approximately $38.7 million in debt)

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM











Deloitte &
Touche LLP






F-12



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##### Table of Contents



EDUCATION REALTY TRUST PREDECESSOR





COMBINED BALANCE SHEETS


December 31, 2004 and 2003


|                              |                                                    |                              |   |        |        |  |   |        |        | 
|----------------------------- | -------------------------------------------------- | ---------------------------- | - | ------ | ------ |  | - | ------ | ------ | 
|                              |                                                    | December 31,                 |  
|                              |                                                    |                              |  
|                              |                                                    | 2004                         |   |        | 2003   | 
|                              |                                                    |                              |   |        |        | 
|                              |                                                    | (In thousands)               |  
|ASSETS                       
|Current assets:               |                                                    |                              |   |        |        |  |   |       
|                              | Cash and cash equivalents                          |                              | $ | 2,883  |        |  | $ | 2,476  |       
|                              | Restricted cash                                    |                              |   | 933    |        |  |   | 983    |       
|                              | Student contracts receivable, net                  |                              |   | 87     |        |  |   | 163    |       
|                              | Management fees receivable from third parties, net |                              |   | 161    |        |  |   | 109    |       
|                              | Other current assets                               |                              |   | 349    |        |  |   | 796    |       
|                              |                                                    |                              |   |        |        | 
|                              | Total current assets                               |                              |   | 4,413  |        |  |   | 4,527  |       
|                              | Student housing properties, net                    |                              |   | 83,785 |        |  |   | 86,388 |       
|                              | Deferred financing costs, net                      |                              |   | 339    |        |  |   | 499    |       
|                              | Reserve for repairs and capital expenditures       |                              |   | 169    |        |  |   | 455    |       
|                              | Investments in unconsolidated entities             |                              |   | 33     |        |  |   | 37     |       
|                              | Other assets                                       |                              |   | 135    |        |  |   | 18     |       
|                              |                                                    |                              |   |        |        | 
|                              |                                                    | Total assets                 |   | $      | 88,874 |  |   | $      | 91,924 | 
|                              |                                                    |                              |   |        |        | 
|                             
|LIABILITIES AND EQUITY       
|Current liabilities:          |                                                    |                              |   |        |        |  |   |       
|                              | Accounts payable and accrued expenses              |                              |   | 1,474  |        |  |   | 1,539  |       
|                              | Deferred rental income                             |                              |   | 3,048  |        |  |   | 3,638  |       
|                              | Deferred development revenue                       |                              |   |       |        |  |   | 7      |       
|                              | Note payable to the promoter                       |                              |   | 485    |        |  |   |       |       
|                              | Current portion of long-term debt                  |                              |   | 1,186  |        |  |   | 1,140  |       
|                              | Accounts payable to the promoter                   |                              |   | 799    |        |  |   | 1,270  |       
|                              |                                                    |                              |   |        |        | 
|                              | Total current liabilities                          |                              |   | 6,992  |        |  |   | 7,594  |       
|                              |                                                    |                              |   |        |        | 
|                              | Long-term debt, net of current portion             |                              |   | 79,925 |        |  |   | 81,064 |       
|                              | Note payable to promoter                           |                              |   |       |        |  |   | 405    |       
|                              | Other noncurrent liabilities                       |                              |   | 168    |        |  |   | 366    |       
|                              |                                                    |                              |   |        |        | 
|                              | Total noncurrent liabilities                       |                              |   | 80,093 |        |  |   | 81,835 |       
|                              |                                                    |                              |   |        |        | 
|                              |                                                    | Total liabilities            |   |        | 87,085 |  |   |        | 89,429 | 
|                             
|Commitments and contingencies |                                                    |                              |   |        |        |  |   |       
|                              | Equity                                             |                              |   | 1,789  |        |  |   | 2,495  |       
|                              |                                                    |                              |   |        |        | 
|                              |                                                    | Total liabilities and equity |   | $      | 88,874 |  |   | $      | 91,924 | 
|                              |                                                    |                              |   |        |        | 

See accompanying notes to combined financial statements.


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##### Table of Contents



EDUCATION REALTY TRUST PREDECESSOR





COMBINED STATEMENTS OF OPERATIONS


For the years ended December 31, 2004, 2003 and 2002


|                                                          |                                             |                          |       |        |        |   |       |        |        |   |       |        |        | 
|--------------------------------------------------------- | ------------------------------------------- | ------------------------ | ----- | ------ | ------ | - | ----- | ------ | ------ | - | ----- | ------ | ------ | 
|                                                          |                                             | Year Ended December 31,  |      
|                                                          |                                             |                          |      
|                                                          |                                             | 2004                     |       |        | 2003   |   |       | 2002   |       
|                                                          |                                             |                          |       |        |        |   |       |        |       
|                                                          |                                             | (In thousands)           |      
|Revenues:                                                 |                                             |                          |       |        |        |   |       |        |        |   |       |       
|                                                          | Student housing leasing revenue             |                          | $     | 21,033 |        |   | $     | 19,974 |        |   | $     | 19,139 |       
|                                                          | Third-party development consulting services |                          |       | 392    |        |   |       | 691    |        |   |       | 1,444  |       
|                                                          | Third-party management revenue              |                          |       | 1,326  |        |   |       | 1,026  |        |   |       | 784    |       
|                                                          | Operating expense reimbursements            |                          |       | 5,223  |        |   |       | 4,438  |        |   |       | 3,345  |       
|                                                          |                                             |                          |       |        |        |   |       |        |       
|                                                          |                                             | Total revenues           |       |        | 27,974 |   |       |        | 26,129 |   |       |        | 24,712 | 
|                                                          |                                             |                          |       |        |        |   |       |        |       
|Operating expenses:                                       |                                             |                          |       |        |        |   |       |        |        |   |       |       
|                                                          | Student housing leasing operations          |                          |       | 10,544 |        |   |       | 10,053 |        |   |       | 9,212  |       
|                                                          | Reimbursable operating expenses             |                          |       | 5,223  |        |   |       | 4,438  |        |   |       | 3,345  |       
|                                                          | General and administrative                  |                          |       | 3,545  |        |   |       | 3,425  |        |   |       | 3,242  |       
|                                                          | Depreciation                                |                          |       | 3,120  |        |   |       | 3,061  |        |   |       | 2,848  |       
|                                                          | Amortization of lease intangibles           |                          |       |       |        |   |       |       |        |   |       | 476    |       
|                                                          |                                             |                          |       |        |        |   |       |        |       
|                                                          |                                             | Total operating expenses |       |        | 22,432 |   |       |        | 20,977 |   |       |        | 19,123 | 
|                                                          |                                             |                          |       |        |        |   |       |        |       
|Operating income                                          |                                             |                          | 5,542 |        |        |   | 5,152 |        |        |   | 5,589 |       
|                                                          |                                             |                          |       |        |        |   |       |        |       
|Nonoperating expenses:                                    |                                             |                          |       |        |        |   |       |        |        |   |       |       
|                                                          | Interest                                    |                          |       | 5,623  |        |   |       | 5,597  |        |   |       | 5,547  |       
|                                                          | Amortization of deferred financing costs    |                          |       | 163    |        |   |       | 174    |        |   |       | 168    |       
|                                                          |                                             |                          |       |        |        |   |       |        |       
|Total nonoperating expenses                               |                                             |                          | 5,786 |        |        |   | 5,771 |        |        |   | 5,715 |       
|                                                          |                                             |                          |       |        |        |   |       |        |       
|Loss before equity in earnings of unconsolidated entities |                                             |                          | (244  | )      |        |   | (619  | )      |        |   | (126  | )     
|Equity in earnings of unconsolidated entities             |                                             |                          | 1,002 |        |        |   | 629   |        |        |   | 128   |       
|                                                          |                                             |                          |       |        |        |   |       |        |       
|Net income                                                |                                             | $                        | 758   |        |        | $ | 10    |        |        | $ | 2     |       
|                                                          |                                             |                          |       |        |        |   |       |        |       

See accompanying notes to combined financial statements.


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##### Table of Contents



EDUCATION REALTY TRUST PREDECESSOR





COMBINED STATEMENTS OF CHANGES IN EQUITY


For the years ended December 31, 2004, 2003 and 2002


|                                    |                      |                |        |        |  
|----------------------------------- | -------------------- | -------------- | ------ | ------ | -
|                                    |                      | Equity         |       
|                                    |                      |                |       
|                                    |                      | (In thousands) |       
|Equity (Deficit), December 31, 2001 |                      | $              | (2,679 | )     
|                                    | Equity contributions |                |        | 12,112 |  
|                                    | Distributions        |                |        | (3,977 | )
|                                    | Net income           |                |        | 2      |  
|                                    |                      |                |       
|Equity, December 31, 2002           |                      |                | 5,458  |       
|                                    | Equity contributions |                |        | 54     |  
|                                    | Distributions        |                |        | (3,027 | )
|                                    | Net income           |                |        | 10     |  
|                                    |                      |                |       
|Equity, December 31, 2003           |                      |                | 2,495  |       
|                                    | Equity contributions |                |        | 40     |  
|                                    | Distributions        |                |        | (1,504 | )
|                                    | Net income           |                |        | 758    |  
|                                    |                      |                |       
|Equity, December 31, 2004           |                      | $              | 1,789  |       
|                                    |                      |                |       

See accompanying notes to combined financial statements.


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##### Table of Contents



EDUCATION REALTY TRUST PREDECESSOR





COMBINED STATEMENTS OF CASH FLOWS


For the years ended December 31, 2004, 2003 and 2002


|                                                                                      |                                                                                     |                                       |       |        |      |   |       |        |      |   |       |         |      |  
|------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------- | ------------------------------------- | ----- | ------ | ---- | - | ----- | ------ | ---- | - | ----- | ------- | ---- | -
|                                                                                      |                                                                                     | Year Ended December 31,               |      
|                                                                                      |                                                                                     |                                       |      
|                                                                                      |                                                                                     | 2004                                  |       |        | 2003 |   |       | 2002   |     
|                                                                                      |                                                                                     |                                       |       |        |      |   |       |        |     
|                                                                                      |                                                                                     | (In thousands)                        |      
|Operating activities                                                                  |                                                                                     |                                       |       |        |      |   |       |        |      |   |       |        
|Net income                                                                            |                                                                                     | $                                     | 758   |        |      | $ | 10    |        |      | $ | 2     |        
|Adjustments to reconcile net income to net cash provided by
    operating activities: |                                                                                     |                                       |       |        |      |   |       |        |      |   |       |        
|                                                                                      | Depreciation                                                                        |                                       |       | 3,120  |      |   |       | 3,061  |      |   |       | 2,848   |     
|                                                                                      | Amortization of lease intangibles                                                   |                                       |       |       |      |   |       |       |      |   |       | 476     |     
|                                                                                      | Amortization of deferred financing costs                                            |                                       |       | 163    |      |   |       | 174    |      |   |       | 168     |     
|                                                                                      | Equity in earnings of unconsolidated entities                                       |                                       |       | (1,002 | )    |   |       | (629   | )    |   |       | (128    | )   
|                                                                                      | Distributions from unconsolidated entities                                          |                                       |       | 808    |      |   |       | 999    |      |   |       | 219     |     
|                                                                                      | Changes in assets and liabilities:                                                  |                                       |       |        |      |   |       |        |      |   |       |         |     
|                                                                                      |                                                                                     | Restricted cash                       |       |        | 50   |   |       |        | (174 | ) |       |         | (198 | )
|                                                                                      |                                                                                     | Student contracts receivable          |       |        | 76   |   |       |        | (27  | ) |       |         | (69  | )
|                                                                                      |                                                                                     | Management fees receivable            |       |        | (52  | ) |       |        | (47  | ) |       |         | 11   |  
|                                                                                      |                                                                                     | Other assets                          |       |        | 330  |   |       |        | (203 | ) |       |         | (181 | )
|                                                                                      |                                                                                     | Accounts payable and accrued expenses |       |        | (65  | ) |       |        | 238  |   |       |         | 880  |  
|                                                                                      |                                                                                     | Accounts payable to the promoter      |       |        | (471 | ) |       |        | 711  |   |       |         | (359 | )
|                                                                                      |                                                                                     | Deferred rental income                |       |        | (590 | ) |       |        | 300  |   |       |         | 264  |  
|                                                                                      |                                                                                     | Deferred development revenue          |       |        | (7   | ) |       |        | (278 | ) |       |         | 59   |  
|                                                                                      |                                                                                     |                                       |       |        |      |   |       |        |     
|                                                                                      | Net cash provided by operating activities                                           |                                       |       | 3,118  |      |   |       | 4,135  |      |   |       | 3,992   |     
|                                                                                      |                                                                                     |                                       |       |        |      |   |       |        |     
|Investing activities                                                                  |                                                                                     |                                       |       |        |      |   |       |        |      |   |       |        
|                                                                                      | Investments in student housing properties and corporate office
    equipment        |                                       |       | (517   | )    |   |       | (549   | )    |   |       | (42,867 | )   
|                                                                                      | Net (deposits to) withdrawals from reserve for repairs and
    capital expenditures |                                       |       | 286    |      |   |       | (202   | )    |   |       | (115    | )   
|                                                                                      |                                                                                     |                                       |       |        |      |   |       |        |     
|                                                                                      | Net cash used in investing activities                                               |                                       |       | (231   | )    |   |       | (751   | )    |   |       | (42,982 | )   
|                                                                                      |                                                                                     |                                       |       |        |      |   |       |        |     
|Financing activities                                                                  |                                                                                     |                                       |       |        |      |   |       |        |      |   |       |        
|                                                                                      | Repayment of long-term debt                                                         |                                       |       | (1,093 | )    |   |       | (955   | )    |   |       | (772    | )   
|                                                                                      | Borrowings of long-term debt                                                        |                                       |       |       |      |   |       | 200    |      |   |       | 31,580  |     
|                                                                                      | Debt issuance costs                                                                 |                                       |       | (3     | )    |   |       | (20    | )    |   |       | (174    | )   
|                                                                                      | Net borrowings on note payable to promoter                                          |                                       |       | 80     |      |   |       | 90     |      |   |       | 182     |     
|                                                                                      | Equity contributions                                                                |                                       |       | 40     |      |   |       | 54     |      |   |       | 12,112  |     
|                                                                                      | Distributions to owners                                                             |                                       |       | (1,504 | )    |   |       | (3,027 | )    |   |       | (3,977  | )   
|                                                                                      |                                                                                     |                                       |       |        |      |   |       |        |     
|                                                                                      | Net cash provided by (used in) financing activities                                 |                                       |       | (2,480 | )    |   |       | (3,658 | )    |   |       | 38,951  |     
|                                                                                      |                                                                                     |                                       |       |        |      |   |       |        |     
|Net increase (decrease) in cash and cash equivalents                                  |                                                                                     |                                       | 407   |        |      |   | (274  | )      |      |   | (39   | )      
|Cash and cash equivalents, beginning of period                                        |                                                                                     |                                       | 2,476 |        |      |   | 2,750 |        |      |   | 2,789 |        
|                                                                                      |                                                                                     |                                       |       |        |      |   |       |        |     
|Cash and cash equivalents, end of period                                              |                                                                                     | $                                     | 2,883 |        |      | $ | 2,476 |        |      | $ | 2,750 |        
|                                                                                      |                                                                                     |                                       |       |        |      |   |       |        |     
|Supplemental disclosure of cash flow information:                                     |                                                                                     |                                       |       |        |      |   |       |        |      |   |       |        
|                                                                                      | Interest paid                                                                       |                                       | $     | 5,629  |      |   | $     | 5,602  |      |   | $     | 5,266   |     
|                                                                                      |                                                                                     |                                       |       |        |      |   |       |        |     

See accompanying notes to combined financial statements.


F-16



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##### Table of Contents



EDUCATION REALTY TRUST PREDECESSOR





NOTES TO COMBINED FINANCIAL STATEMENTS


Years ended December 31, 2004, 2003, and 2002


(Dollars in thousands)


1.     Organization and ownership of
the predecessor






| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Allen & OHara Education Services, LLC
    (AOES), a Tennessee limited liability company, was
    formed on April 15, 1998 to perform student housing
    management activities. AOES is owned 75%, directly and
    indirectly, by Allen & OHara, Inc. (AOI),
    which is owned 100% by Paul O. Bower (the Promoter).
    The remaining 25% ownership is held by individuals comprising
    management of the Predecessor.                                                                                                                                                                                                     
|
| |  | Allen & OHara Development Company, LLC
    (AODC), a limited liability company, was formed on
    October 5, 2001 as a wholly owned subsidiary of AOES. AODC
    was formed for the purpose of providing development consulting
    services for third party student housing properties in close
    proximity to or on college and university campuses throughout
    the United States.                                                                                                                                                                                                                                            
|
| |  | Allen & OHara Educational Properties LLC
    (AOEP), a limited liability company, was formed on
    May 5, 1998 to hold the ownership interests in student
    housing properties. AOEP is owned 75%, directly and indirectly,
    by AOI with the remaining 25% ownership held by individuals
    comprising management of the Predecessor. AOEP acquired 50%
    interest in The Gables Apartments (The Gables) on
    March 6, 2000. The remaining 50% interest is owned by an
    unaffiliated investor. The Gables is a garden-style apartment
    located adjacent to Western Kentucky University and is managed
    by AOES.
|
| |  | Education Properties Trust, LLC (EPT), a Delaware
    limited liability company, was formed on March 27, 2001, to
    own and manage multiple garden-style student housing properties
    throughout the United States. EPT is 13% owned by AOEP and 87%
    owned by an unaffiliated third party investor. EPT currently
    owns, through four separate wholly-owned limited liability
    companies, the following student housing properties that are
    managed by AOES:                                                                                                                                                        



| |   |                                                                                    
| | - | -----------------------------------------------------------------------------------
| |  | Players Club Apartments, Tallahassee, Florida (owned by EPT
    Tallahassee I, LLC)
|
| |  | The Reserve at Athens, Athens, Georgia (owned by EPT Athens I,
    LLC)            
|
| |  | The Reserve at Clemson, Central, South Carolina (owned by EPT
    Clemson I, LLC)  
|
| |  | NorthPointe Apartments, Tucson, Arizona (owned by EPT Arizona I,
    LLC)          



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | C Station, LLC, a Tennessee limited liability company, was
    formed on June 15, 1999 and owns and operates one
    garden-style student housing property (College Station
    Apartments) located near Augusta State University. C
    Station LLC is owned by the Promoter, SMA, and certain key
    management. C Station LLC is managed by AOES.                                                                                                                                                                                      
|
| |  | University Towers Raleigh, LLC, a North Carolina limited
    liability company, was formed on January 29, 1998, to own a
    nine-story student housing apartment community (University
    Towers) located adjacent to North Carolina State
    University. University Towers Raleigh LLC is owned 50% by AOD/
    Raleigh Residence Hall LLC (AOD/ Raleigh), which is
    owned by the Promoter, key management and other third parties,
    and 50% by an unaffiliated third party investor. University
    Towers is managed by AOES.

F-17



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##### Table of Contents



EDUCATION REALTY TRUST PREDECESSOR


NOTES TO COMBINED FINANCIAL
STATEMENTS  (Continued)






| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The Promoter and certain members of management contributed their
    interests in AOES in exchange for $12,400 of units in the
    Operating Partnership. AOES converted to a corporation and
    elected to be treated as a taxable REIT subsidiary. This entity
    will continue to own 100% of AODC.                                                                                                                                                                                                                           
|
| |  | The Operating Partnership acquired all of the interests in EPT
    from AOEP and the unaffiliated investors for $26,915 in cash,
    $1,341 in units in the Operating Partnership and the assumption
    of debt totaling $50,134. As a result EPT became a wholly owned
    single member LLC subsidiary of the Operating Partnership.                                                                                                                                                                                            
|
| |  | The owners of the Gables Apartments contributed their interests
    in the student housing property to a newly formed Delaware
    limited partnership referred to as EDR BG, LP in exchange for
    all the limited partnership interests of EDR BG LP. The
    Operating Partnership acquired all of the ownership interests in
    EDR BG LP for $1,113 in cash, $58 in units in the Operating
    Partnership and the assumption of debt totaling $4,552. The
    Operating Partnership owns all of the interests in EDR BG LP.
|
| |  | C Station LLC merged into a newly formed Delaware LLC, EDR C
    Station LLC, which is a wholly owned subsidiary of the Operating
    Partnership. The interests were contributed in exchange for the
    issuance of $229 in units in the Operating Partnership and the
    assumption of debt and notes payable to the Promoter totaling
    $2,477.                                                                                                                                                                             
|
| |  | The University Towers Partnership acquired a 100% interest in
    the student housing property referred to as University Towers
    and in turn was acquired for $8,864 in cash, $4,316 in units and
    the assumption of debt totaling $24,371.                                                                                                                                                                                                                                                                                  







F-18



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##### Table of Contents



EDUCATION REALTY TRUST PREDECESSOR


NOTES TO COMBINED FINANCIAL
STATEMENTS  (Continued)


2.     Summary of significant
accounting policies


Basis of presentation




Use of estimates




Cash and cash equivalents






Restricted cash




Student housing properties




Business
Combinations,


F-19



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##### Table of Contents



EDUCATION REALTY TRUST PREDECESSOR


NOTES TO COMBINED FINANCIAL
STATEMENTS  (Continued)


Repairs, maintenance, and major improvements




Long-lived assets


Accounting for
the Impairment and Disposal of Long-lived Assets.


Investment in unconsolidated joint ventures and limited
liability companies






| |   |                                                                                                                                             
| | - | --------------------------------------------------------------------------------------------------------------------------------------------
| |  | Salisbury Student Apartment Developers Joint Venture
    (SSAD), 33% owned by AOES                                                        
|
| |  | Salisbury Student Apartment Developers LLC (SSAD
    LLC), a Maryland limited liability company, 33% owned by
    the Promoter            
|
| |  | University of Louisville Apartment Developers LLC (ULAD
    LLC), a Kentucky limited liability company, 50% owned by
    the Promoter     
|
| |  | Hines/ AOES LLC, an Alabama limited liability company, 50% owned
    by AOES                                                                
|
| |  | National Development/ Allen & OHara CUPA, LLC
    (CUPA LLC), a Pennsylvania limited liability
    company, 50% owned by AODC            
|
| |  | National Development/ Allen & OHara Lock Haven, LLC
    (Lock Haven LLC), a Pennsylvania limited liability
    company, 50% owned by AODC
|
| |  | National Development/ Allen & OHara Clarion, LLC
    (Clarion LLC), a Pennsylvania limited liability
    company, 50% owned by AODC      
|
| |  | Allen & OHara National Development Bloomsburg LLC
    (Bloomsburg LLC), a Pennsylvania limited liability
    company, 50% owned by AODC  

Deferred financing costs




F-20



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##### Table of Contents



EDUCATION REALTY TRUST PREDECESSOR


NOTES TO COMBINED FINANCIAL
STATEMENTS  (Continued)






Revenue recognition




Student housing leasing revenue


Student housing food service revenue


Third-party management revenue


Development consulting revenue


Operating expense reimbursement revenue


F-21



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##### Table of Contents



EDUCATION REALTY TRUST PREDECESSOR


NOTES TO COMBINED FINANCIAL
STATEMENTS  (Continued)


Income Statement Characterization of
Reimbursements Received for Out of Pocket Expenses
Incurred.




|                                     |  |                         |      |   |      |   |     |      |  |   |      |  
|------------------------------------ |  | ----------------------- | ---- | - | ---- | - | --- | ---- |  | - | ---- | -
|                                     |  | Year Ended December 31, |     
|                                     |  |                         |     
|                                     |  | 2004                    |      |   | 2003 |   |     | 2002 | 
|                                     |  |                         |      |   |      |   |     |      | 
|Balance, beginning of period         |  | $                       | 114  |   |      | $ | 47  |      |  | $ | 6    |  
|Provision for uncollectible accounts |  |                         | 152  |   |      |   | 125 |      |  |   | 141  |  
|Deductions                           |  |                         | (169 | ) |      |   | (58 | )    |  |   | (100 | )
|                                     |  |                         |      |   |      |   |     |      | 
|Balance, end of period               |  | $                       | 97   |   |      | $ | 114 |      |  | $ | 47   |  
|                                     |  |                         |      |   |      |   |     |      | 

Costs related to third party development consulting
services




Advertising expense




Federal income taxes




Segment information


Disclosures about Segments of an Enterprise and Related
Information,


Fair value of financial instruments


Disclosure about the Fair Value of Financial
Instruments,


F-22



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##### Table of Contents



EDUCATION REALTY TRUST PREDECESSOR


NOTES TO COMBINED FINANCIAL
STATEMENTS  (Continued)




Recent accounting pronouncements


Consolidation of Variable Interest Entities, an
interpretation of ARB 51


Accounting for Certain
Financial Instruments with Characteristics of Both Liabilities
and Equity,


Share Based
Payment,


F-23



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##### Table of Contents



EDUCATION REALTY TRUST PREDECESSOR


NOTES TO COMBINED FINANCIAL
STATEMENTS  (Continued)


3.     Student housing properties




|                                |                                                |              |         |         |      |   |         |         |  
|------------------------------- | ---------------------------------------------- | ------------ | ------- | ------- | ---- | - | ------- | ------- | -
|                                |                                                | December 31, |        
|                                |                                                |              |        
|                                |                                                | 2004         |         |         | 2003 |  
|                                |                                                |              |         |         |      |  
|Student housing properties:     |                                                |              |         |         |      |   |         |        
|                                | Land                                           |              | $       | 11,638  |      |   | $       | 11,638  |  
|                                | Building and improvements                      |              |         | 80,364  |      |   |         | 80,163  |  
|                                | Furniture, fixtures and equipment              |              |         | 9,010   |      |   |         | 8,694   |  
|                                | Lease intangibles                              |              |         | 476     |      |   |         | 476     |  
|                                |                                                |              |         |         |      |  
|                                |                                                |              | 101,488 |         |      |   | 100,971 |        
|                                | Less accumulated depreciation and amortization |              |         | (17,703 | )    |   |         | (14,583 | )
|                                |                                                |              |         |         |      |  
|Student housing properties, net |                                                | $            | 83,785  |         |      | $ | 86,388  |        
|                                |                                                |              |         |         |      |  





|                       |  |              |        |         |      |      |             |              |  |       |       |  |             |              |         |         |             |   |        |  |  |  |          | 
|---------------------- |  | ------------ | ------ | ------- | ---- | ---- | ----------- | ------------ |  | ----- | ----- |  | ----------- | ------------ | ------- | ------- | ----------- | - | ------ |  |  |  | -------- | 
|                       |  |              |        |         |      | Cost |             |              |  |       |       |  |            
|                       |  |              |        | Initial |      |      | Capitalized |              |  | Total |       |  | Accumulated |              |         | Date of |            
|Property               |  | Encumbrances |        |         | Cost |      |             | Subsequently |  |       | Costs |  |             | Depreciation |         |         | Acquisition |  
|                       |  |              |        |         |      |      |             |              |  |       |       |  |             |              |         |         |             |  
|University Towers      |  | $            | 24,401 |         |      | $    | 19,299      |              |  | $     | 5,228 |  |             | $            | 24,527  |         |             | $ | 8,778  |  |  |  | 08/23/89 | 
|The Gables             |  |              | 4,557  |         |      |      | 5,492       |              |  |       | 230   |  |             |              | 5,722   |         |             |   | 911    |  |  |  | 03/06/00 | 
|The Reserve at Athens  |  |              | 14,754 |         |      |      | 18,823      |              |  |       | 436   |  |             |              | 19,259  |         |             |   | 2,211  |  |  |  | 04/01/01 | 
|Players Club           |  |              | 4,731  |         |      |      | 6,712       |              |  |       | 410   |  |             |              | 7,122   |         |             |   | 863    |  |  |  | 04/01/01 | 
|College Station        |  |              | 1,932  |         |      |      | 2,633       |              |  |       | 162   |  |             |              | 2,795   |         |             |   | 479    |  |  |  | 07/15/99 | 
|The Reserve at Clemson |  |              | 11,952 |         |      |      | 15,592      |              |  |       | 51    |  |             |              | 15,643  |         |             |   | 1,677  |  |  |  | 01/25/02 | 
|NorthPointe            |  |              | 18,784 |         |      |      | 26,273      |              |  |       | 147   |  |             |              | 26,420  |         |             |   | 2,784  |  |  |  | 01/25/02 | 
|                       |  |              |        |         |      |      |             |              |  |       |       |  |             |              |         |         |             |  
|Totals                 |  | $            | 81,111 |         |      | $    | 94,824      |              |  | $     | 6,664 |  |             | $            | 101,488 |         |             | $ | 17,703 |  |  |  |          | 
|                       |  |              |        |         |      |      |             |              |  |       |       |  |             |              |         |         |             |  



|                                 |  |                         |         |  |      |   |         | 
|-------------------------------- |  | ----------------------- | ------- |  | ---- | - | ------- | 
|                                 |  | Year Ended December 31, |        
|                                 |  |                         |        
|                                 |  | 2004                    |         |  | 2003 |  
|                                 |  |                         |         |  |      |  
|Balance, beginning of the period |  | $                       | 100,971 |  |      | $ | 100,422 | 
|Additions                        |  |                         | 517     |  |      |   | 549     | 
|Deductions                       |  |                         |        |  |      |   |        | 
|                                 |  |                         |         |  |      |  
|Balance, end of the period       |  | $                       | 101,488 |  |      | $ | 100,971 | 
|                                 |  |                         |         |  |      |  

F-24



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##### Table of Contents



EDUCATION REALTY TRUST PREDECESSOR


NOTES TO COMBINED FINANCIAL
STATEMENTS  (Continued)




|                                 |  |                         |        |  |      |   |        |      |  |   |        | 
|-------------------------------- |  | ----------------------- | ------ |  | ---- | - | ------ | ---- |  | - | ------ | 
|                                 |  | Year Ended December 31, |       
|                                 |  |                         |       
|                                 |  | 2004                    |        |  | 2003 |   |        | 2002 | 
|                                 |  |                         |        |  |      |   |        |      | 
|Balance, beginning of the period |  | $                       | 14,583 |  |      | $ | 11,522 |      |  | $ | 8,198  | 
|Depreciation                     |  |                         | 3,120  |  |      |   | 3,061  |      |  |   | 3,324  | 
|Deductions                       |  |                         |       |  |      |   |       |      |  |   |       | 
|                                 |  |                         |        |  |      |   |        |      | 
|Balance, end of the period       |  | $                       | 17,703 |  |      | $ | 14,583 |      |  | $ | 11,522 | 
|                                 |  |                         |        |  |      |   |        |      | 

4.     Student housing
acquisitions




|                                  |       |             |        |        |              |   |        |        | 
|--------------------------------- | ----- | ----------- | ------ | ------ | ------------ | - | ------ | ------ | 
|                                  |       | The Reserve |        |        |             
|                                  |       | at Clemson  |        |        | North Pointe |  
|                                  |       |             |        |        |              |  
|Land                              |       | $           | 580    |        |              | $ | 2,610  |       
|Building and improvements         |       |             | 13,974 |        |              |   | 21,896 |       
|Furniture, fixtures and equipment |       |             | 768    |        |              |   | 1,296  |       
|Identifiable lease intangibles    |       |             | 178    |        |              |   | 298    |       
|                                  |       |             |        |        |              |  
|                                  | Total |             | $      | 15,500 |              |   | $      | 26,100 | 
|                                  |       |             |        |        |              |  



5.     Investments in unconsolidated
entities




|                                                    |                   |                 |      |      |      |  |      |       |  
|--------------------------------------------------- | ----------------- | --------------- | ---- | ---- | ---- |  | ---- | ----- | -
|                                                    |                   | At December 31, |     
|                                                    |                   |                 |     
|                                                    |                   | 2004            |      |      | 2003 | 
|                                                    |                   |                 |      |      |      | 
|Financial Position:                                 |                   |                 |      |      |      |  |      |      
|                                                    | Total assets      |                 | $    | 111  |      |  | $    | 811   |  
|                                                    | Total liabilities |                 |      | 375  |      |  |      | 1,474 |  
|                                                    | Deficit           |                 |      | (264 | )    |  |      | (663  | )
|Predecessors investment in unconsolidated entities |                   |                 | (124 | )    |      |  | (329 | )    

F-25



---



##### Table of Contents



EDUCATION REALTY TRUST PREDECESSOR


NOTES TO COMBINED FINANCIAL
STATEMENTS  (Continued)


|                                                            |            |                         |       |       |      |  |     |       |  |  |     |     | 
|----------------------------------------------------------- | ---------- | ----------------------- | ----- | ----- | ---- |  | --- | ----- |  |  | --- | --- | 
|                                                            |            | Year Ended December 31, |      
|                                                            |            |                         |      
|                                                            |            | 2004                    |       |       | 2003 |  |     | 2002  | 
|                                                            |            |                         |       |       |      |  |     |       | 
|Results of Operations:                                      |            |                         |       |       |      |  |     |       |  |  |     |    
|                                                            | Revenues   |                         | $     | 2,272 |      |  | $   | 1,523 |  |  | $   | 254 | 
|                                                            | Net income |                         |       | 2,167 |      |  |     | 1,378 |  |  |     | 254 | 
|Predecessors equity in earnings of unconsolidated entities |            |                         | 1,002 |       |      |  | 629 |       |  |  | 128 |    



6.     Debt




|                                             |  |              |        |   |              |   |        |               |  |                      |  |  |          |   |  |              |           |  |  |  |         | 
|-------------------------------------------- |  | ------------ | ------ | - | ------------ | - | ------ | ------------- |  | -------------------- |  |  | -------- | - |  | ------------ | --------- |  |  |  | ------- | 
|                                             |  | Outstanding  |        |   | Outstanding  |   |        |               |  | Interest Rate        |  |  |          |   | 
|                                             |  | at           |        |   | at           |   |        |               |  | at                   |  |  |          |   | 
|                                             |  | December 31, |        |   | December 31, |   |        | Stated        |  | December 31,         |  |  | Maturity |   |  |             
|Property                                     |  | 2004         |        |   | 2003         |   |        | Interest Rate |  | 2004                 |  |  | Date     |   |  | Amortization |          
|                                             |  |              |        |   |              |   |        |               |  |                      |  |  |          |   |  |              |          
|University Towers                            |  | $            | 24,401 |   |              | $ | 24,774 |               |  | 6.77%                |  |  | 6.77     | % |  |              | 3/1/2008  |  |  |  | 30 Year | 
|The Reserve at Athens                        |  |              | 14,754 |   |              |   | 14,914 |               |  | 7.15%                |  |  | 7.15     | % |  |              | 5/1/2006  |  |  |  | 30 Year | 
|Players Club                                 |  |              | 4,731  |   |              |   | 4,783  |               |  | 7.15%                |  |  | 7.15     | % |  |              | 5/1/2006  |  |  |  | 30 Year | 
|The Reserve at Clemson                       |  |              | 11,952 |   |              |   | 12,085 |               |  | 6.63%                |  |  | 6.63     | % |  |              | 5/1/2007  |  |  |  | 30 Year | 
|College Station                              |  |              | 900    |   |              |   | 995    |               |  | 5-Yr. Treasury +2.5% |  |  | 5.88     | % |  |              | 12/1/2008 |  |  |  | 30 Year | 
|College Station 2nd Mortgage                 |  |              | 1,032  |   |              |   | 1,043  |               |  | 9.00%                |  |  | 9.00     | % |  |              | 7/15/2009 |  |  |  | 30 Year | 
|The Gables                                   |  |              | 4,557  |   |              |   | 4,616  |               |  | 5.50%                |  |  | 5.50     | % |  |              | 11/1/2013 |  |  |  | 30 Year | 
|NorthPointe                                  |  |              | 18,784 |   |              |   | 18,994 |               |  | 6.63%                |  |  | 6.63     | % |  |              | 5/1/2007  |  |  |  | 30 Year | 
|                                             |  |              |        |   |              |   |        |               |  |                      |  |  |          |   |  |              |          
|Total/weighted average rate                  |  | $            | 81,111 |   |              | $ | 82,204 |               |  |                      |  |  | 6.76     | % |  |              |           |  |  |  |         | 
|Less current portion of long-term debt       |  |              | (1,186 | ) |              |   | (1,140 | )             |  |                      |  |  |          |   |  |              |           |  |  |  |         | 
|                                             |  |              |        |   |              |   |        |               |  |                      |  |  |          |   |  |              |          
|Total long-term debt, net of current portion |  | $            | 79,925 |   |              | $ | 81,064 |               |  |                      |  |  |          |   |  |              |           |  |  |  |         | 
|                                             |  |              |        |   |              |   |        |               |  |                      |  |  |          |   |  |              |          

F-26



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##### Table of Contents



EDUCATION REALTY TRUST PREDECESSOR


NOTES TO COMBINED FINANCIAL
STATEMENTS  (Continued)




|                   |  |   |        | 
|------------------ |  | - | ------ | 
|Fiscal Year Ending |  |   |        | 
|2005               |  | $ | 1,186  | 
|2006               |  |   | 20,286 | 
|2007               |  |   | 30,616 | 
|2008               |  |   | 23,757 | 
|2009               |  |   | 1,032  | 
|Thereafter         |  |   | 4,234  | 
|                   |  |   |       
|Total              |  | $ | 81,111 | 
|                   |  |   |       



|                             |  |                         |        |   |      |   |        |      |  |   |        |  
|---------------------------- |  | ----------------------- | ------ | - | ---- | - | ------ | ---- |  | - | ------ | -
|                             |  | Year Ended December 31, |       
|                             |  |                         |       
|                             |  | 2004                    |        |   | 2003 |   |        | 2002 | 
|                             |  |                         |        |   |      |   |        |      | 
|Balance, beginning of period |  | $                       | 82,204 |   |      | $ | 82,959 |      |  | $ | 52,151 |  
|Additions                    |  |                         |       |   |      |   | 200    |      |  |   | 31,580 |  
|Repayments of principal      |  |                         | (1,093 | ) |      |   | (955   | )    |  |   | (772   | )
|                             |  |                         |        |   |      |   |        |      | 
|Balance, end of period       |  | $                       | 81,111 |   |      | $ | 82,204 |      |  | $ | 82,959 |  
|                             |  |                         |        |   |      |   |        |      | 





7.     Segments




F-27



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##### Table of Contents



EDUCATION REALTY TRUST PREDECESSOR


NOTES TO COMBINED FINANCIAL
STATEMENTS  (Continued)




|                                                |                                               |                         |   |        |      |  |   |        |   |  |   |        | 
|----------------------------------------------- | --------------------------------------------- | ----------------------- | - | ------ | ---- |  | - | ------ | - |  | - | ------ | 
|                                                |                                               | Year Ended December 31, |  
|                                                |                                               |                         |  
|                                                |                                               | 2004                    |   |        | 2003 |  |   | 2002   |  
|                                                |                                               |                         |   |        |      |  |   |        |  
|Student Housing Leasing                         |                                               |                         |   |        |      |  |   |        |   |  |   |       
|                                                | Rental revenues                               |                         | $ | 16,353 |      |  | $ | 15,293 |   |  | $ | 14,558 | 
|                                                | Food service revenue                          |                         |   | 4,680  |      |  |   | 4,681  |   |  |   | 4,581  | 
|                                                |                                               |                         |   |        |      |  |   |        |  
|                                                | Total revenues from external customers        |                         |   | 21,033 |      |  |   | 19,974 |   |  |   | 19,139 | 
|                                                | Rental expenses                               |                         |   | 7,786  |      |  |   | 7,560  |   |  |   | 6,934  | 
|                                                | Food service expenses                         |                         |   | 2,758  |      |  |   | 2,644  |   |  |   | 2,399  | 
|                                                | Intersegment expense                          |                         |   | 973    |      |  |   | 959    |   |  |   | 924    | 
|                                                |                                               |                         |   |        |      |  |   |        |  
|                                                | Net operating income                          |                         | $ | 9,516  |      |  | $ | 8,811  |   |  | $ | 8,882  | 
|                                                |                                               |                         |   |        |      |  |   |        |  
|                                                | Depreciation and amortization                 |                         | $ | 3,283  |      |  | $ | 3,235  |   |  | $ | 3,492  | 
|                                                |                                               |                         |   |        |      |  |   |        |  
|                                                | Interest expense                              |                         | $ | 5,623  |      |  | $ | 5,597  |   |  | $ | 5,547  | 
|                                                |                                               |                         |   |        |      |  |   |        |  
|                                                | Total segment assets, end of the period       |                         | $ | 88,166 |      |  | $ | 90,976 |   |  | $ | 93,565 | 
|                                                |                                               |                         |   |        |      |  |   |        |  
|Student Housing Development Consulting Services |                                               |                         |   |        |      |  |   |        |   |  |   |       
|                                                | Development consulting fees                   |                         | $ | 392    |      |  | $ | 691    |   |  | $ | 1,444  | 
|                                                | Operating expense reimbursements              |                         |   | 311    |      |  |   | 386    |   |  |   | 266    | 
|                                                |                                               |                         |   |        |      |  |   |        |  
|                                                | Total revenues from external customers        |                         |   | 703    |      |  |   | 1,077  |   |  |   | 1,710  | 
|                                                | Development consulting expenses               |                         |   | 136    |      |  |   | 184    |   |  |   | 452    | 
|                                                | General and administrative                    |                         |   | 838    |      |  |   | 675    |   |  |   | 665    | 
|                                                | Reimbursable operating expenses               |                         |   | 311    |      |  |   | 386    |   |  |   | 266    | 
|                                                | Corporate overhead allocation                 |                         |   | 355    |      |  |   | 386    |   |  |   | 242    | 
|                                                |                                               |                         |   |        |      |  |   |        |  
|                                                | Net operating income (loss)                   |                         | $ | (937   | )    |  | $ | (554   | ) |  | $ | 85     | 
|                                                |                                               |                         |   |        |      |  |   |        |  
|                                                | Equity in earnings of unconsolidated entities |                         | $ | 1,002  |      |  | $ | 629    |   |  | $ | 128    | 
|                                                |                                               |                         |   |        |      |  |   |        |  
|                                                | Total segment assets, end of period           |                         | $ | 38     |      |  | $ | 109    |   |  | $ | 341    | 
|                                                |                                               |                         |   |        |      |  |   |        |  

F-28



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##### Table of Contents



EDUCATION REALTY TRUST PREDECESSOR


NOTES TO COMBINED FINANCIAL
STATEMENTS  (Continued)


|                                    |                                               |                         |   |        |      |  |   |        |   |  |   |        |  
|----------------------------------- | --------------------------------------------- | ----------------------- | - | ------ | ---- |  | - | ------ | - |  | - | ------ | -
|                                    |                                               | Year Ended December 31, |  
|                                    |                                               |                         |  
|                                    |                                               | 2004                    |   |        | 2003 |  |   | 2002   |  
|                                    |                                               |                         |   |        |      |  |   |        |  
|Student Housing Management Services |                                               |                         |   |        |      |  |   |        |   |  |   |       
|                                    | Management fees from external customers       |                         | $ | 1,326  |      |  | $ | 1,026  |   |  | $ | 784    |  
|                                    | Operating expense reimbursements              |                         |   | 4,912  |      |  |   | 4,052  |   |  |   | 3,079  |  
|                                    |                                               |                         |   |        |      |  |   |        |  
|                                    | Total revenues from external customers        |                         |   | 6,238  |      |  |   | 5,078  |   |  |   | 3,863  |  
|                                    | Intersegment revenues                         |                         |   | 973    |      |  |   | 959    |   |  |   | 924    |  
|                                    |                                               |                         |   |        |      |  |   |        |  
|                                    | Total revenues                                |                         |   | 7,211  |      |  |   | 6,037  |   |  |   | 4,787  |  
|                                    | General and administrative expenses           |                         |   | 1,556  |      |  |   | 1,313  |   |  |   | 1,313  |  
|                                    | Reimbursable operating expenses               |                         |   | 4,912  |      |  |   | 4,052  |   |  |   | 3,079  |  
|                                    | Corporate overhead allocation                 |                         |   | 660    |      |  |   | 716    |   |  |   | 449    |  
|                                    |                                               |                         |   |        |      |  |   |        |  
|                                    | Net operating income (loss)                   |                         | $ | 83     |      |  | $ | (44    | ) |  | $ | (54    | )
|                                    |                                               |                         |   |        |      |  |   |        |  
|                                    | Total segment assets, end of period           |                         | $ | 670    |      |  | $ | 839    |   |  | $ | 309    |  
|                                    |                                               |                         |   |        |      |  |   |        |  
|Reconciliations:                    |                                               |                         |   |        |      |  |   |        |   |  |   |       
|                                    | Total segment revenues                        |                         | $ | 28,947 |      |  | $ | 27,088 |   |  | $ | 25,636 |  
|                                    | Elimination of intersegment revenues          |                         |   | (973   | )    |  |   | (959   | ) |  |   | (924   | )
|                                    |                                               |                         |   |        |      |  |   |        |  
|                                    | Total consolidated revenues                   |                         | $ | 27,974 |      |  | $ | 26,129 |   |  | $ | 24,712 |  
|                                    |                                               |                         |   |        |      |  |   |        |  
|                                    | Segment net operating income                  |                         | $ | 8,662  |      |  | $ | 8,213  |   |  | $ | 8,913  |  
|                                    | Depreciation and amortization                 |                         |   | 3,283  |      |  |   | 3,235  |   |  |   | 3,492  |  
|                                    | Interest                                      |                         |   | 5,623  |      |  |   | 5,597  |   |  |   | 5,547  |  
|                                    | Equity in earnings of unconsolidated entities |                         |   | (1,002 | )    |  |   | (629   | ) |  |   | (128   | )
|                                    |                                               |                         |   |        |      |  |   |        |  
|                                    | Net income                                    |                         | $ | 758    |      |  | $ | 10     |   |  | $ | 2      |  
|                                    |                                               |                         |   |        |      |  |   |        |  
|                                    | Total segment assets, end of period           |                         | $ | 88,874 |      |  | $ | 91,924 |   |  | $ | 94,215 |  
|                                    |                                               |                         |   |        |      |  |   |        |  

8.     Related party transactions






F-29



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##### Table of Contents



EDUCATION REALTY TRUST PREDECESSOR


NOTES TO COMBINED FINANCIAL
STATEMENTS  (Continued)




9.     Lease commitments






|            |  |   |     | 
|----------- |  | - | --- | 
|Year Ending |  |  
|            |  |  
|2005        |  | $ | 348 | 
|2006        |  |   | 345 | 
|2007        |  |   | 347 | 
|2008        |  |   | 351 | 
|2009        |  |   | 90  | 
|Thereafter  |  |   |    | 



10.     Employee savings plan




11.     Commitments and
contingencies






F-30



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##### Table of Contents



EDUCATION REALTY TRUST PREDECESSOR


NOTES TO COMBINED FINANCIAL
STATEMENTS  (Continued)






12.     Quarterly financial
information (unaudited)




|                                              |  |             |       |  |             |   |       |             |  |   |             |   |  |       |       |  |  |   |        | 
|--------------------------------------------- |  | ----------- | ----- |  | ----------- | - | ----- | ----------- |  | - | ----------- | - |  | ----- | ----- |  |  | - | ------ | 
|2004                                          |  | 1st Quarter |       |  | 2nd Quarter |   |       | 3rd Quarter |  |   | 4th Quarter |   |  | Total |      
|                                              |  |             |       |  |             |   |       |             |  |   |             |   |  |       |      
|Revenues                                      |  | $           | 7,692 |  |             | $ | 6,414 |             |  | $ | 6,525       |   |  | $     | 7,343 |  |  | $ | 27,974 | 
|Operating expenses                            |  |             | 5,440 |  |             |   | 5,249 |             |  |   | 6,376       |   |  |       | 5,367 |  |  |   | 22,432 | 
|Nonoperating expenses                         |  |             | 1,445 |  |             |   | 1,440 |             |  |   | 1,452       |   |  |       | 1,449 |  |  |   | 5,786  | 
|Equity in earnings of unconsolidated entities |  |             | 422   |  |             |   | 374   |             |  |   | 137         |   |  |       | 69    |  |  |   | 1,002  | 
|                                              |  |             |       |  |             |   |       |             |  |   |             |   |  |       |      
|Net income (loss)                             |  | $           | 1,229 |  |             | $ | 99    |             |  | $ | (1,166      | ) |  | $     | 596   |  |  | $ | 758    | 
|                                              |  |             |       |  |             |   |       |             |  |   |             |   |  |       |      

|                                              |  |             |       |  |             |   |       |             |  |   |             |   |  |       |       |  |  |   |        | 
|--------------------------------------------- |  | ----------- | ----- |  | ----------- | - | ----- | ----------- |  | - | ----------- | - |  | ----- | ----- |  |  | - | ------ | 
|2003                                          |  | 1st Quarter |       |  | 2nd Quarter |   |       | 3rd Quarter |  |   | 4th Quarter |   |  | Total |      
|                                              |  |             |       |  |             |   |       |             |  |   |             |   |  |       |      
|Revenues                                      |  | $           | 6,757 |  |             | $ | 5,917 |             |  | $ | 6,139       |   |  | $     | 7,316 |  |  | $ | 26,129 | 
|Operating expenses                            |  |             | 4,827 |  |             |   | 4,900 |             |  |   | 5,950       |   |  |       | 5,300 |  |  |   | 20,977 | 
|Nonoperating expenses                         |  |             | 1,435 |  |             |   | 1,439 |             |  |   | 1,447       |   |  |       | 1,450 |  |  |   | 5,771  | 
|Equity in earnings of unconsolidated entities |  |             | 40    |  |             |   | 114   |             |  |   | 159         |   |  |       | 316   |  |  |   | 629    | 
|                                              |  |             |       |  |             |   |       |             |  |   |             |   |  |       |      
|Net income (loss)                             |  | $           | 535   |  |             | $ | (308  | )           |  | $ | (1,099      | ) |  | $     | 882   |  |  | $ | 10     | 
|                                              |  |             |       |  |             |   |       |             |  |   |             |   |  |       |      

F-31



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##### Table of Contents






REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM














Deloitte &
Touche LLP






F-32



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##### Table of Contents



NATIONAL DEVELOPMENT/ ALLEN & OHARA CUPA,
LLC





BALANCE SHEETS


December 31, 2004 and 2003


|                                       |                                       |                |   |   |      |   |      |     | 
|-------------------------------------- | ------------------------------------- | -------------- | - | - | ---- | - | ---- | --- | 
|                                       |                                       | December 31,   |  
|                                       |                                       |                |  
|                                       |                                       | 2004           |   |   | 2003 |  
|                                       |                                       |                |   |   |      |  
|                                       |                                       | (In thousands) |  
|ASSETS                                
|Current assets:                        |                                       |                |   |   |      |   |      |    
|                                       | Cash and cash equivalents             |                | $ | 8 |      |   | $    | 55  | 
|                                       | Receivables                           |                |   | 1 |      |   |      | 204 | 
|                                       |                                       |                |   |   |      |  
|Total assets                           |                                       | $              | 9 |   |      | $ | 259  |    
|                                       |                                       |                |   |   |      |  
|                                      
|LIABILITIES AND MEMBERS DEFICIT      
|Current liabilities:                   |                                       |                |   |   |      |   |      |    
|                                       | Accounts payable and accrued expenses |                | $ |  |      |   | $    | 227 | 
|                                       | Deferred development revenue          |                |   |  |      |   |      | 428 | 
|                                       |                                       |                |   |   |      |  
|                                       | Total current liabilities             |                |   |  |      |   |      | 655 | 
|Commitments and contingencies          |                                       |                |   |   |      |   |      |    
|Members deficit                       |                                       |                | 9 |   |      |   | (396 | )  
|                                       |                                       |                |   |   |      |  
|Total liabilities and members deficit |                                       | $              | 9 |   |      | $ | 259  |    
|                                       |                                       |                |   |   |      |  

See accompanying notes to financial statements.


F-33



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##### Table of Contents



NATIONAL DEVELOPMENT/ ALLEN & OHARA CUPA,
LLC





STATEMENTS OF OPERATIONS


For the year ended December 31, 2004 and the period
from


April 1, 2003 (date operations commenced) to
December 31, 2003


|                                            |  |                |     |  |      |   |     | 
|------------------------------------------- |  | -------------- | --- |  | ---- | - | --- | 
|                                            |  | Period Ending  |    
|                                            |  | December 31,   |    
|                                            |  |                |    
|                                            |  | 2004           |     |  | 2003 |  
|                                            |  |                |     |  |      |  
|                                            |  | (In thousands) |    
|Third-party development consulting services |  | $              | 573 |  |      | $ | 584 | 
|Operating expenses                          |  |                | 39  |  |      |   | 4   | 
|                                            |  |                |     |  |      |  
|Net income                                  |  | $              | 534 |  |      | $ | 580 | 
|                                            |  |                |     |  |      |  

See accompanying notes to financial statements.


F-34



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##### Table of Contents



NATIONAL DEVELOPMENT/ ALLEN & OHARA CUPA,
LLC





STATEMENTS OF CHANGES IN MEMBERS EQUITY (DEFICIT)


For the year ended December 31, 2004 and the period
from


April 1, 2003 (date operations commenced) to
December 31, 2003


|                                                               |  |                |      |   |              |   |      |       |  |   |      |  
|-------------------------------------------------------------- |  | -------------- | ---- | - | ------------ | - | ---- | ----- |  | - | ---- | -
|                                                               |  | Allen & OHara |      |   | National     |   |      |      
|                                                               |  | Development    |      |   | Development  |   |      |      
|                                                               |  | Company, LLC   |      |   | Company, LLC |   |      | Total | 
|                                                               |  |                |      |   |              |   |      |       | 
|                                                               |  | (In thousands) |     
|Members Equity, April 1, 2003 (Date Operations
    Commenced) |  |                |     |   |              |   |     |       |  |   |     |  
|Distributions to members                                       |  | $              | (488 | ) |              | $ | (488 | )     |  | $ | (976 | )
|Net income                                                     |  |                | 290  |   |              |   | 290  |       |  |   | 580  |  
|                                                               |  |                |      |   |              |   |      |       | 
|Members Deficit, December 31, 2003                            |  |                | (198 | ) |              |   | (198 | )     |  |   | (396 | )
|Distributions to members                                       |  |                | (64  | ) |              |   | (65  | )     |  |   | (129 | )
|Net income                                                     |  |                | 267  |   |              |   | 267  |       |  |   | 534  |  
|                                                               |  |                |      |   |              |   |      |       | 
|Members Equity, December 31, 2004                             |  | $              | 5    |   |              | $ | 4    |       |  | $ | 9    |  
|                                                               |  |                |      |   |              |   |      |       | 

See accompanying notes to financial statements.


F-35



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NATIONAL DEVELOPMENT/ ALLEN & OHARA CUPA,
LLC





STATEMENTS OF CASH FLOWS


For the year ended December 31, 2004 and the period
from


April 1, 2003 (date operations commenced) to
December 31, 2003


|                                                                                      |                                       |                                           |     |      |      |   |     |      |       |  
|------------------------------------------------------------------------------------- | ------------------------------------- | ----------------------------------------- | --- | ---- | ---- | - | --- | ---- | ----- | -
|                                                                                      |                                       | Period Ending                             |    
|                                                                                      |                                       | December 31,                              |    
|                                                                                      |                                       |                                           |    
|                                                                                      |                                       | 2004                                      |     |      | 2003 |  
|                                                                                      |                                       |                                           |     |      |      |  
|                                                                                      |                                       | (In thousands)                            |    
|Operating activities                                                                  |                                       |                                           |     |      |      |   |     |     
|Net income                                                                            |                                       | $                                         | 534 |      |      | $ | 580 |     
|Adjustments to reconcile net income to net cash provided by
    operating activities: |                                       |                                           |     |      |      |   |     |     
|                                                                                      | Changes in assets and liabilities:    |                                           |     |      |      |   |     |      |      
|                                                                                      |                                       | Receivables                               |     |      | 203  |   |     |      | (204  | )
|                                                                                      |                                       | Accounts payable and accrued expenses     |     |      | (227 | ) |     |      | 227   |  
|                                                                                      |                                       | Deferred development revenue              |     |      | (428 | ) |     |      | 428   |  
|                                                                                      |                                       |                                           |     |      |      |  
|                                                                                      |                                       | Net cash provided by operating activities |     |      | 82   |   |     |      | 1,031 |  
|                                                                                      |                                       |                                           |     |      |      |  
|Financing activities                                                                  |                                       |                                           |     |      |      |   |     |     
|                                                                                      | Distributions to members              |                                           |     | (129 | )    |   |     | (976 | )    
|                                                                                      |                                       |                                           |     |      |      |  
|                                                                                      | Net cash used in financing activities |                                           |     | (129 | )    |   |     | (976 | )    
|                                                                                      |                                       |                                           |     |      |      |  
|Net increase in cash and cash equivalents                                             |                                       |                                           | (47 | )    |      |   | 55  |     
|Cash and cash equivalents, beginning of period                                        |                                       |                                           | 55  |      |      |   |    |     
|                                                                                      |                                       |                                           |     |      |      |  
|Cash and cash equivalents, end of period                                              |                                       | $                                         | 8   |      |      | $ | 55  |     
|                                                                                      |                                       |                                           |     |      |      |  

See accompanying notes to financial statements.


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NATIONAL DEVELOPMENT/ ALLEN & OHARA CUPA,
LLC





NOTES TO FINANCIAL STATEMENTS


Year ended December 31, 2004 and period from


April 1, 2003 (date operations commenced) to
December 31, 2003


(Dollars in thousands)




|   |                                       
|-- | --------------------------------------
|1. | Ownership and operation of the company









| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Each member of the Company receives a pro-rata share of profits,
    losses, and distributions based on its proportional share of
    ownership in the Company as discussed above.                                                                                                                                                                                                                                                                                                                  
|
| |  | Neither member is obligated to restore any amount of the
    Companys deficit capital balance.                                                                                                                                                                                                                                                                                                                                                                                                     
|
| |  | The managing member monitors the cash financial position and
    cash flow of the Company. If the managing member determines
    additional funds are needed, it may require the members to
    advance amounts to the Company up to $50 in the aggregate to
    fund working capital needs as needed. If the members are called
    to advance funds, each member must contribute its pro-rata share
    of the amounts required and the advances will bear interest at
    the Prime Rate plus 3%.
|
| |  | Unanimous consent between the members is required to, among
    other things, dissolve, liquidate, merge, or consolidate the
    Companys assets; assign membership interests to another
    party; loan amounts to others; borrow funds; pledge Company
    assets as collateral; admit additional members; and enter into
    agreements with the University.                                                                                                                                    





|   |                                           
|-- | ------------------------------------------
|2. | Summary of significant accounting policies



| |                                     
| | ------------------------------------
| | Basis of presentation and accounting



F-37



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##### Table of Contents



NATIONAL DEVELOPMENT/ ALLEN & OHARA CUPA,
LLC


NOTES TO FINANCIAL STATEMENTS  (Continued)




| |                             
| | ----------------------------
| | Balance sheet classification





| |                 
| | ----------------
| | Use of estimates





| |                          
| | -------------------------
| | Cash and cash equivalents





| |                    
| | -------------------
| | Revenue recognition





| |                                    
| | -----------------------------------
| | Fair value of financial instruments





| |                     
| | --------------------
| | Federal income taxes





|   |                           
|-- | --------------------------
|3. | Related party transactions







|   |                             
|-- | ----------------------------
|4. | Concentration of credit risk



F-38



---



##### Table of Contents



NATIONAL DEVELOPMENT/ ALLEN & OHARA CUPA,
LLC


NOTES TO FINANCIAL STATEMENTS  (Continued)




F-39



---



##### Table of Contents






REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM














Deloitte &
Touche LLP






F-40



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##### Table of Contents



NATIONAL DEVELOPMENT/ALLEN & OHARA CLARION,
LLC





BALANCE SHEETS


December 31, 2004 and December 31, 2003 (2003,
unaudited)


|                                                |                                       |                |    |             |      |   |      |     | 
|----------------------------------------------- | ------------------------------------- | -------------- | -- | ----------- | ---- | - | ---- | --- | 
|                                                |                                       | December 31,   |   
|                                                |                                       |                |   
|                                                |                                       | 2004           |    |             | 2003 |  
|                                                |                                       |                |    |             |      |  
|                                                |                                       |                |    | (Unaudited) |     
|                                                |                                       | (In thousands) |   
|ASSETS                                         
|Current assets:                                 |                                       |                |    |             |      |   |      |    
|                                                | Cash and cash equivalents             |                | $  | 4           |      |   | $    | 1   | 
|                                                | Receivables                           |                |    | 27          |      |   |      | 173 | 
|                                                |                                       |                |    |             |      |  
|Total assets                                    |                                       | $              | 31 |             |      | $ | 174  |    
|                                                |                                       |                |    |             |      |  
|                                               
|LIABILITIES AND MEMBERS DEFICIT               
|Current liabilities:                            |                                       |                |    |             |      |   |      |    
|                                                | Accounts payable and accrued expenses |                | $  | 1           |      |   | $    | 2   | 
|                                                | Deferred development revenue          |                |    |            |      |   |      | 303 | 
|                                                |                                       |                |    |             |      |  
|                                                | Total current liabilities             |                |    | 1           |      |   |      | 305 | 
|Members equity/(deficit)                       |                                       |                | 30 |             |      |   | (131 | )  
|                                                |                                       |                |    |             |      |  
|Total liabilities and members equity/(deficit) |                                       | $              | 31 |             |      | $ | 174  |    
|                                                |                                       |                |    |             |      |  

See accompanying notes to financial statements.


F-41



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##### Table of Contents



NATIONAL DEVELOPMENT/ALLEN & OHARA CLARION,
LLC





STATEMENTS OF OPERATIONS


For the year ended December 31, 2004 and the period
from


September 1, 2003 (date operations commenced) to
December 31, 2003 (2003, unaudited)


|                                            |  |                |     |             |      |   |     | 
|------------------------------------------- |  | -------------- | --- | ----------- | ---- | - | --- | 
|                                            |  | Period Ending  |    
|                                            |  | December 31,   |    
|                                            |  |                |    
|                                            |  | 2004           |     |             | 2003 |  
|                                            |  |                |     |             |      |  
|                                            |  |                |     | (Unaudited) |     
|                                            |  | (In thousands) |    
|Third-party development consulting services |  | $              | 764 |             |      | $ | 140 | 
|Operating expenses                          |  |                | 13  |             |      |   | 3   | 
|                                            |  |                |     |             |      |  
|Net income                                  |  | $              | 751 |             |      | $ | 137 | 
|                                            |  |                |     |             |      |  

See accompanying notes to financial statements.


F-42



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##### Table of Contents



NATIONAL DEVELOPMENT/ ALLEN & OHARA CLARION,
LLC





STATEMENTS OF CHANGES IN MEMBERS EQUITY (DEFICIT)


For the year ended December 31, 2004 and the period
from


September 1, 2003 (date operations commenced) to
December 31, 2003 (2003, unaudited)


|                                                                               |  |                |      |   |              |   |      |       |  |   |      |  
|------------------------------------------------------------------------------ |  | -------------- | ---- | - | ------------ | - | ---- | ----- |  | - | ---- | -
|                                                                               |  | Allen & OHara |      |   | National     |   |      |      
|                                                                               |  | Development    |      |   | Development  |   |      |      
|                                                                               |  | Company, LLC   |      |   | Company, LLC |   |      | Total | 
|                                                                               |  |                |      |   |              |   |      |       | 
|                                                                               |  | (In thousands) |     
|Members Equity, September 1, 2003 (Date Operations
    Commenced) (unaudited) |  | $              |     |   |              | $ |     |       |  | $ |     |  
|Distributions to members (unaudited)                                           |  |                | (134 | ) |              |   | (134 | )     |  |   | (268 | )
|Net income (unaudited)                                                         |  |                | 68   |   |              |   | 69   |       |  |   | 137  |  
|                                                                               |  |                |      |   |              |   |      |       | 
|Members Equity, December 31, 2003 (unaudited)                                 |  |                | (66  | ) |              |   | (65  | )     |  |   | (131 | )
|Distributions to members                                                       |  |                | (295 | ) |              |   | (295 | )     |  |   | (590 | )
|Net income                                                                     |  |                | 376  |   |              |   | 375  |       |  |   | 751  |  
|                                                                               |  |                |      |   |              |   |      |       | 
|Members Equity, December 31, 2004                                             |  | $              | 15   |   |              | $ | 15   |       |  | $ | 30   |  
|                                                                               |  |                |      |   |              |   |      |       | 

See accompanying notes to financial statements.


F-43



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##### Table of Contents



NATIONAL DEVELOPMENT/ ALLEN & OHARA CLARION,
LLC





STATEMENTS OF CASH FLOWS


For the year ended December 31, 2004 and the period
from


September 1, 2003 (date operations commenced) to
December 31, 2003 (2003, unaudited)


|                                                                                      |                                       |                                           |     |             |      |   |     |      |      |  
|------------------------------------------------------------------------------------- | ------------------------------------- | ----------------------------------------- | --- | ----------- | ---- | - | --- | ---- | ---- | -
|                                                                                      |                                       | Period Ended                              |    
|                                                                                      |                                       | December 31,                              |    
|                                                                                      |                                       |                                           |    
|                                                                                      |                                       | 2004                                      |     |             | 2003 |  
|                                                                                      |                                       |                                           |     |             |      |  
|                                                                                      |                                       |                                           |     | (Unaudited) |     
|                                                                                      |                                       | (In thousands)                            |    
|Operating activities                                                                  |                                       |                                           |     |             |      |   |     |     
|Net income                                                                            |                                       | $                                         | 751 |             |      | $ | 137 |     
|Adjustments to reconcile net income to net cash provided by
    operating activities: |                                       |                                           |     |             |      |   |     |     
|                                                                                      | Changes in assets and liabilities:    |                                           |     |             |      |   |     |      |     
|                                                                                      |                                       | Receivables                               |     |             | 146  |   |     |      | (173 | )
|                                                                                      |                                       | Accounts payable and accrued expenses     |     |             | (1   | ) |     |      | 2    |  
|                                                                                      |                                       | Deferred development revenue              |     |             | (303 | ) |     |      | 303  |  
|                                                                                      |                                       |                                           |     |             |      |  
|                                                                                      |                                       | Net cash provided by operating activities |     |             | 593  |   |     |      | 269  |  
|                                                                                      |                                       |                                           |     |             |      |  
|Financing activities                                                                  |                                       |                                           |     |             |      |   |     |     
|                                                                                      | Distributions to members              |                                           |     | (590        | )    |   |     | (268 | )   
|                                                                                      |                                       |                                           |     |             |      |  
|                                                                                      | Net cash used in financing activities |                                           |     | (590        | )    |   |     | (268 | )   
|                                                                                      |                                       |                                           |     |             |      |  
|Net increase in cash and cash equivalents                                             |                                       |                                           | 3   |             |      |   | 1   |     
|Cash and cash equivalents, beginning of period                                        |                                       |                                           | 1   |             |      |   |    |     
|                                                                                      |                                       |                                           |     |             |      |  
|Cash and cash equivalents, end of period                                              |                                       | $                                         | 4   |             |      | $ | 1   |     
|                                                                                      |                                       |                                           |     |             |      |  

See accompanying notes to financial statements.


F-44



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##### Table of Contents



NATIONAL DEVELOPMENT/ ALLEN & OHARA CLARION,
LLC





NOTES TO FINANCIAL STATEMENTS


For the year ended December 31, 2004 and the period
from


September 1, 2003 (date operations commenced) to
December 31, 2003 (2003, unaudited)


(Dollars in thousands)




|   |                                       
|-- | --------------------------------------
|1. | Ownership and operation of the company









| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Each member of the Company receives a pro-rata share of profits,
    losses, and distributions based on its proportional share of
    ownership in the Company as discussed above.                                                                                                                                                                                                                                                                                                                  
|
| |  | Neither member is obligated to restore any amount of the
    Companys deficit capital balance.                                                                                                                                                                                                                                                                                                                                                                                                     
|
| |  | The managing member monitors the cash financial position and
    cash flow of the Company. If the managing member determines
    additional funds are needed, it may require the members to
    advance amounts to the Company up to $50 in the aggregate to
    fund working capital needs as needed. If the members are called
    to advance funds, each member must contribute its pro-rata share
    of the amounts required and the advances will bear interest at
    the Prime Rate plus 3%.
|
| |  | Unanimous consent between the members is required to, among
    other things, dissolve, liquidate, merge, or consolidate the
    Companys assets; assign membership interests to another
    party; loan amounts to others; borrow funds; pledge Company
    assets as collateral; admit additional members; and enter into
    agreements with the University.                                                                                                                                    





|   |                                           
|-- | ------------------------------------------
|2. | Summary of significant accounting policies



| |                                     
| | ------------------------------------
| | Basis of presentation and accounting





| |                             
| | ----------------------------
| | Balance sheet classification



F-45



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##### Table of Contents



NATIONAL DEVELOPMENT/ALLEN & OHARA CLARION,
LLC


NOTES TO FINANCIAL STATEMENTS  (Continued)




| |                                
| | -------------------------------
| | Unaudited financial information





| |                 
| | ----------------
| | Use of estimates





| |                          
| | -------------------------
| | Cash and cash equivalents





| |                    
| | -------------------
| | Revenue recognition





| |                                    
| | -----------------------------------
| | Fair value of financial instruments





| |                     
| | --------------------
| | Federal income taxes





|   |                           
|-- | --------------------------
|3. | Related party transactions





F-46



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##### Table of Contents



NATIONAL DEVELOPMENT/ALLEN & OHARA CLARION,
LLC


NOTES TO FINANCIAL STATEMENTS  (Continued)




|   |                             
|-- | ----------------------------
|4. | Concentration of credit risk



F-47



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##### Table of Contents






REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM













Deloitte &
Touche LLP






F-48



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##### Table of Contents



NATIONAL DEVELOPMENT/ ALLEN & OHARA LOCK
HAVEN, LLC





BALANCE SHEETS


December 31, 2004 and December 31, 2003 (2003,
unaudited)


|                                       |                                       |                |    |             |      |   |      |     | 
|-------------------------------------- | ------------------------------------- | -------------- | -- | ----------- | ---- | - | ---- | --- | 
|                                       |                                       | December 31,   |   
|                                       |                                       |                |   
|                                       |                                       | 2004           |    |             | 2003 |  
|                                       |                                       |                |    |             |      |  
|                                       |                                       |                |    | (Unaudited) |     
|                                       |                                       | (In thousands) |   
|ASSETS                                
|Current assets:                        |                                       |                |    |             |      |   |      |    
|                                       | Cash and cash equivalents             |                | $  | 2           |      |   | $    | 4   | 
|                                       | Receivables                           |                |    |            |      |   |      | 14  | 
|                                       |                                       |                |    |             |      |  
|Total assets                           |                                       | $              | 2  |             |      | $ | 18   |    
|                                       |                                       |                |    |             |      |  
|                                      
|LIABILITIES AND MEMBERS DEFICIT      
|Current liabilities:                   |                                       |                |    |             |      |   |      |    
|                                       | Accounts payable and accrued expenses |                | $  | 1           |      |   | $    | 2   | 
|                                       | Deferred development revenue          |                |    | 5           |      |   |      | 214 | 
|                                       |                                       |                |    |             |      |  
|                                       | Total current liabilities             |                | $  | 6           |      |   | $    | 216 | 
|Commitments and contingencies          |                                       |                |    |             |      |   |      |    
|Members deficit                       |                                       |                | (4 | )           |      |   | (198 | )  
|                                       |                                       |                |    |             |      |  
|Total liabilities and members deficit |                                       | $              | 2  |             |      | $ | 18   |    
|                                       |                                       |                |    |             |      |  

See accompanying notes to financial statements.


F-49



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##### Table of Contents



NATIONAL DEVELOPMENT/ ALLEN & OHARA LOCK
HAVEN, LLC





STATEMENTS OF OPERATIONS


For the year ended December 31, 2004 and the period
from


July 1, 2003 (date operations commenced) to
December 31, 2003 (2003, unaudited)


|                                            |  |                |     |             |      |   |     | 
|------------------------------------------- |  | -------------- | --- | ----------- | ---- | - | --- | 
|                                            |  | Period ending  |    
|                                            |  | December 31,   |    
|                                            |  |                |    
|                                            |  | 2004           |     |             | 2003 |  
|                                            |  |                |     |             |      |  
|                                            |  |                |     | (Unaudited) |     
|                                            |  | (In thousands) |    
|Third-party development consulting services |  | $              | 351 |             |      | $ | 177 | 
|Operating expenses                          |  |                | 1   |             |      |   | 3   | 
|                                            |  |                |     |             |      |  
|Net income                                  |  | $              | 350 |             |      | $ | 174 | 
|                                            |  |                |     |             |      |  

See accompanying notes to financial statements.


F-50



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##### Table of Contents



NATIONAL DEVELOPMENT/ ALLEN & OHARA LOCK
HAVEN, LLC





STATEMENTS OF CHANGES IN MEMBERS EQUITY (DEFICIT)


For the year ended December 31, 2004 and the period
from


July 1, 2003 (date operations commenced) to
December 31, 2003 (2003, unaudited)


|                                                                          |  |                |      |   |              |   |      |       |  |   |      |  
|------------------------------------------------------------------------- |  | -------------- | ---- | - | ------------ | - | ---- | ----- |  | - | ---- | -
|                                                                          |  | Allen & OHara |      |   | National     |   |      |      
|                                                                          |  | Development    |      |   | Development  |   |      |      
|                                                                          |  | Company, LLC   |      |   | Company, LLC |   |      | Total | 
|                                                                          |  |                |      |   |              |   |      |       | 
|                                                                          |  | (In thousands) |     
|Members Equity, July 1, 2003 (Date Operations
    Commenced) (unaudited) |  | $              |     |   |              | $ |     |       |  | $ |     |  
|Distributions to members (unaudited)                                      |  |                | (186 | ) |              |   | (186 | )     |  |   | (372 | )
|Net income (unaudited)                                                    |  |                | 87   |   |              |   | 87   |       |  |   | 174  |  
|                                                                          |  |                |      |   |              |   |      |       | 
|Members Deficit, December 31, 2003(unaudited)                            |  |                | (99  | ) |              |   | (99  | )     |  |   | (198 | )
|Distributions to members                                                  |  |                | (78  | ) |              |   | (78  | )     |  |   | (156 | )
|Net income                                                                |  |                | 175  |   |              |   | 175  |       |  |   | 350  |  
|                                                                          |  |                |      |   |              |   |      |       | 
|Members Deficit, December 31, 2004                                       |  | $              | (2   | ) |              | $ | (2   | )     |  | $ | (4   | )
|                                                                          |  |                |      |   |              |   |      |       | 

See accompanying notes to financial statements.


F-51



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##### Table of Contents



NATIONAL DEVELOPMENT/ ALLEN & OHARA LOCK
HAVEN, LLC





STATEMENTS OF CASH FLOWS


For the year ended December 31, 2004 and the period
from


July 1, 2003 (date operations commenced) to
December 31, 2003 (2003, unaudited)


|                                                                                      |                                       |                                           |     |             |      |   |     |      |     |  
|------------------------------------------------------------------------------------- | ------------------------------------- | ----------------------------------------- | --- | ----------- | ---- | - | --- | ---- | --- | -
|                                                                                      |                                       | Period ending                             |    
|                                                                                      |                                       | December 31,                              |    
|                                                                                      |                                       |                                           |    
|                                                                                      |                                       | 2004                                      |     |             | 2003 |  
|                                                                                      |                                       |                                           |     |             |      |  
|                                                                                      |                                       |                                           |     | (Unaudited) |     
|                                                                                      |                                       | (In thousands)                            |    
|Operating activities                                                                  |                                       |                                           |     |             |      |   |     |     
|Net income                                                                            |                                       | $                                         | 350 |             |      | $ | 174 |     
|Adjustments to reconcile net income to net cash provided by
    operating activities: |                                       |                                           |     |             |      |   |     |     
|                                                                                      | Changes in assets and liabilities:    |                                           |     |             |      |   |     |      |    
|                                                                                      |                                       | Receivables                               |     |             | 14   |   |     |      | (14 | )
|                                                                                      |                                       | Accounts payable and accrued expenses     |     |             | (1   | ) |     |      | 2   |  
|                                                                                      |                                       | Deferred development revenue              |     |             | (209 | ) |     |      | 214 |  
|                                                                                      |                                       |                                           |     |             |      |  
|                                                                                      |                                       | Net cash provided by operating activities |     |             | 154  |   |     |      | 376 |  
|                                                                                      |                                       |                                           |     |             |      |  
|Financing activities                                                                  |                                       |                                           |     |             |      |   |     |     
|                                                                                      | Distributions to members              |                                           |     | (156        | )    |   |     | (372 | )  
|                                                                                      |                                       |                                           |     |             |      |  
|                                                                                      | Net cash used in financing activities |                                           |     | (156        | )    |   |     | (372 | )  
|                                                                                      |                                       |                                           |     |             |      |  
|Net increase in cash and cash equivalents                                             |                                       |                                           | (2  | )           |      |   | (3  | )   
|Cash and cash equivalents, beginning of period                                        |                                       |                                           | 4   |             |      |   |    |     
|                                                                                      |                                       |                                           |     |             |      |  
|Cash and cash equivalents, end of period                                              |                                       | $                                         | 2   |             |      | $ | 4   |     
|                                                                                      |                                       |                                           |     |             |      |  

See accompanying notes to financial statements.


F-52



---



##### Table of Contents



NATIONAL DEVELOPMENT/ ALLEN & OHARA LOCK
HAVEN, LLC





NOTES TO FINANCIAL STATEMENTS


The year ended December 31, 2004 and the period from


July 1, 2003 (date operations commenced) to
December 31, 2003(2003, unaudited)


(Dollars in thousands)




|   |                                       
|-- | --------------------------------------
|1. | Ownership and operation of the company









| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Each member of the Company receives a pro-rata share of profits,
    losses, and distributions based on its proportional share of
    ownership in the Company as discussed above.                                                                                                                                                                                                                                                                                                                  
|
| |  | Neither member is obligated to restore any amount of the
    Companys deficit capital balance.                                                                                                                                                                                                                                                                                                                                                                                                     
|
| |  | The managing member monitors the cash financial position and
    cash flow of the Company. If the managing member determines
    additional funds are needed, it may require the members to
    advance amounts to the Company up to $50 in the aggregate to
    fund working capital needs as needed. If the members are called
    to advance funds, each member must contribute its pro-rata share
    of the amounts required and the advances will bear interest at
    the Prime Rate plus 3%.
|
| |  | Unanimous consent between the members is required to, among
    other things, dissolve, liquidate, merge, or consolidate the
    Companys assets; assign membership interests to another
    party; loan amounts to others; borrow funds; pledge Company
    assets as collateral; admit additional members; and enter into
    agreements with the University.                                                                                                                                    





|   |                                           
|-- | ------------------------------------------
|2. | Summary of significant accounting policies



| |                                     
| | ------------------------------------
| | Basis of presentation and accounting





| |                                
| | -------------------------------
| | Unaudited financial information



F-53



---



##### Table of Contents



NATIONAL DEVELOPMENT/ ALLEN & OHARA LOCK
HAVEN, LLC


NOTES TO FINANCIAL STATEMENTS  (Continued)






| |                             
| | ----------------------------
| | Balance sheet classification





| |                 
| | ----------------
| | Use of estimates





| |                          
| | -------------------------
| | Cash and cash equivalents





| |                    
| | -------------------
| | Revenue recognition





| |                                    
| | -----------------------------------
| | Fair value of financial instruments





| |                     
| | --------------------
| | Federal income taxes





|   |                           
|-- | --------------------------
|3. | Related party transactions





F-54



---



##### Table of Contents



NATIONAL DEVELOPMENT/ ALLEN & OHARA LOCK
HAVEN, LLC


NOTES TO FINANCIAL STATEMENTS  (Continued)




|   |                             
|-- | ----------------------------
|4. | Concentration of credit risk



F-55



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##### Table of Contents



INDEX TO EXHIBITS


|        |    |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|------- | -- | ----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|Number  |    | Description
|        |    |            
|        | 1  | .1          |  | Form of Underwriting Agreement among Education Realty Trust,
    Inc. and the underwriters named therein. (Incorporated by
    reference to Exhibit 1.1 to the Companys Amendment
    No. 1 to its Registration Statement on Form S-11 (File
    No. 333-1192364), filed on November 4, 2004.)                                                                                                                                                                    
|        | 3  | .1          |  | Second Articles of Amendment and Restatement of Education Realty
    Trust, Inc. (Incorporated by reference to Exhibit 3.1 to
    the Companys Amendment No. 2 to its Registration
    Statement on Form S-11 (File No. 333-1192364), filed
    on December 10, 2004.)                                                                                                                                                                                            
|        | 3  | .2          |  | Bylaws of Education Realty Trust, Inc. (Incorporated by
    reference to Exhibit 3.2 to the Companys Registration
    Statement on Form S-11 (File No. 333-119264), filed on
    September 24, 2004.)                                                                                                                                                                                                                                                             
|        | 4  | .1          |  | Form of Certificate for Common Stock of Education Realty Trust,
    Inc. (Incorporated by reference to Exhibit 4.1 to the
    Companys Amendment No. 5 to its Registration
    Statement on Form S-11 (File No. 333-1192364), filed
    on January 24, 2005.)                                                                                                                                                                                                     
|        | 4  | .2          |  | Form of Education Realty Trust, Inc. Common Stock Purchase
    Warrant dated January 31, 2005, issued to JPI Investment
    Company, L.P. (Incorporated by reference to
    Exhibit 4.2 to the Companys Registration Statement on
    Form S-11 (File No. 333-119264), filed on
    September 24, 2004.)                                                                                                                                                          
|        | 4  | .3          |  | Form of Registration Rights Agreement dated January 31,
    2005, by and among Education Realty Trust, Inc., Education
    Realty Operating Partnership, LP, JPI Investment
    Company, L.P. and the unit holders whose names are set
    forth on the signature pages thereto. (Incorporated by reference
    to Exhibit 4.3 to the Companys Registration Statement
    on Form S-11 (File No. 333-119264), filed on
    September 24, 2004.)                   
|        | 10 | .1          |  | Form of Amended and Restated Agreement of Limited Partnership of
    Education Realty Operating Partnership, LP. (Incorporated
    by reference to Exhibit 10.1 to the Companys
    Registration Statement on Form S-11 (File
    No. 333-119264), filed on September 24, 2004.)                                                                                                                                                                                  
|        | 10 | .2          |  | Form of Amended and Restated Agreement of Limited Partnership of
    University Towers Operating Partnership, LP. (Incorporated
    by reference to Exhibit 10.2 to the Companys
    Registration Statement on Form S-11 (File
    No. 333-119264), filed on September 24, 2004.)                                                                                                                                                                                 
|        | 10 | .3          |  | Form of Education Realty Trust, Inc. 2004 Incentive Plan.
    (Incorporated by reference to Exhibit 10.3 to the
    Companys Amendment No. 4 to its Registration
    Statement on Form S-11 (File No. 333-1192364), filed
    on January 11, 2005.)                                                                                                                                                                                                               
|        | 10 | .4          |  | Form of Indemnification Agreement between Education Realty
    Trust, Inc. and its directors and officers. (Incorporated by
    reference to Exhibit 10.4 to the Companys Amendment
    No. 1 to its Registration Statement on Form S-11 (File
    No. 333-1192364), filed on November 4, 2004.)                                                                                                                                                                  
|        | 10 | .5          |  | Employment Agreement between Education Realty Trust, Inc. and
    Paul O. Bower, dated as of December 6, 2004. (Incorporated
    by reference to Exhibit 10.5 to the Companys
    Amendment No. 2 to its Registration Statement on
    Form S-11 (File No. 333-1192364), filed on
    December 10, 2004.)                                                                                                                                                         
|        | 10 | .6          |  | Employment Agreement between Education Realty Trust, Inc. and
    Randall H. Brown, dated as of December 6, 2004.
    (Incorporated by reference to Exhibit 10.6 to the
    Companys Amendment No. 2 to its Registration
    Statement on Form S-11 (File No. 333-1192364), filed
    on December 10, 2004.)                                                                                                                                                      
|        | 10 | .7          |  | Employment Agreement between Education Realty Trust, Inc. and
    Craig L. Cardwell, dated as of December 6, 2004.
    (Incorporated by reference to Exhibit 10.7 to the
    Companys Amendment No. 2 to its Registration
    Statement on Form S-11 (File No. 333-1192364), filed
    on December 10, 2004.)                                                                                                                                                     
|        | 10 | .8          |  | Contribution Agreement dated as of September 24, 2004, by
    and among University Towers Operating Partnership, LP,
    Allen & OHara, Inc., Paul O. Bower,
    Clyde C. Porter, Robert D. Bird, Thomas J.
    Hickey, Barbara S. Hays and Hays Enterprises III, Ltd.
    (Incorporated by reference to Exhibit 10.8 to the
    Companys Amendment No. 2 to its Registration
    Statement on Form S-11 (File No. 333-1192364), filed
    on December 10, 2004.)



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##### Table of Contents



|        |    |     |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|------- | -- | --- | ----------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |     |            
|Number  |    |     | Description
|        |    |     |            
|        | 10 | .9  |             | Contribution Agreement dated as of September 20, 2004, by
    and between Melton E. Valentine, Jr. and University Towers
    Operating Partnership, LP. (Incorporated by reference to
    Exhibit 10.9 to the Companys Amendment No. 2 to
    its Registration Statement on Form S-11 (File
    No. 333-1192364), filed on December 10, 2004.)                                                                                                                                                                                                                                 
|        | 10 | .10 |             | Contribution Agreement dated September 20, 2004, by and
    among Allen & OHara Educational Properties, LLC,
    Allen & OHara, Inc., Thomas J. Hickey, Craig L.
    Cardwell, Randall H. Brown, William W. Harris, Wallace L. Wilcox
    and Education Realty Operating Partnership, LP.
    (Incorporated by reference to Exhibit 10.10 to the
    Companys Registration Statement on
    Form S-11 (File No. 333-119264), filed on
    September 24, 2004.)                                                                                                               
|        | 10 | .11 |             | Agreement and Plan of Merger dated September 20, 2004 by
    and among C Station, L.L.C., Allen & OHara, Inc.,
    Paul O. Bower, Craig L. Cardwell, Student Management
    Associates, LLC, Thomas J. Hickey, Randall H. Brown,
    William W. Harris, Wallace L. Wilcox, EDR C
    Station, LLC and Education Realty Operating
    Partnership, LP. (Incorporated by reference to
    Exhibit 10.11 to the Companys Amendment No. 2 to
    its Registration Statement on Form S-11 (File
    No. 333-1192364), filed on December 10, 2004.)                                 
|        | 10 | .12 |             | Agreement and Plan of Merger dated September 20, 2004, by
    and among Allen & OHara Education Services, LLC,
    Allen & OHara, Inc., Student Management
    Associates, LLC, Thomas J. Hickey, Craig L. Cardwell,
    Randall H. Brown, William W. Harris, Wallace L. Wilcox,
    Allen & OHara Education Services, Inc., and
    Education Realty Operating Partnership, LP. (Incorporated
    by reference to Exhibit 10.12 to the Companys
    Amendment No. 2 to its Registration Statement on
    Form S-11 (File No. 333-1192364), filed on
    December 10, 2004.)
|        | 10 | .13 |             | Contract of Sale/Contribution made effective as of
    September 17, 2004, by and among JPI-CG Mezz LLC, JPI-MC
    Mezz LLC, JPI Genpar Realty LLC, JPI Investment
    Company, L.P. and Education Realty Operating
    Partnership, LP. (Incorporated by reference to
    Exhibit 10.13 to the Companys Amendment No. 2 to
    its Registration Statement on Form S-11 (File
    No. 333-1192364), filed on December 10, 2004.)                                                                                                                                              
|        | 10 | .14 |             | Contract of Sale made effective as of September 17, 2004,
    by and among Jefferson Commons  Lawrence, L.P.,
    Jefferson Commons  Wabash, L.P. and Education Realty
    Operating Partnership, LP. (Incorporated by reference to
    Exhibit 10.14 to the Companys Amendment No. 2 to
    its Registration Statement on Form S-11 (File
    No. 333-1192364), filed on December 10, 2004.)                                                                                                                                                                                
|        | 10 | .15 |             | Contract of Sale/Contribution made effective as of
    September 17, 2004, by and among Jefferson
    Commons  Tucson Phase II Limited Partnership,
    Jefferson Commons  Columbia, L.P. and Education
    Realty Operating Partnership, LP. (Incorporated by
    reference to Exhibit 10.15 to the Companys Amendment
    No. 2 to its Registration Statement on Form S-11 (File
    No. 333-1192364), filed on December 10, 2004.)                                                                                                                                        
|        | 10 | .16 |             | Contribution Agreement dated September 23, 2004 by and
    among Allen & OHara Educational Properties, LLC,
    FSPP Education I, L.L.C., FSPP Education II, L.L.C.,
    Allen & OHara, Inc., Thomas J. Hickey,
    Craig L. Cardwell, Randall H. Brown, William W.
    Harris, Wallace L. Wilcox and Education Realty Operating
    Partnership, LP. (Incorporated by reference to
    Exhibit 10.16 to the Companys Amendment No. 2 to
    its Registration Statement on Form S-11 (File
    No. 333-1192364), filed on December 10, 2004.)                                
|        | 10 | .17 |             | Form of Revolving Loan Agreement dated January 31, 2005,
    between Education Realty Operating Partnership, LP and JPI
    Multifamily Investments L.P. (Incorporated by reference to
    Exhibit 10.17 to the Companys Registration Statement
    on Form S-11 (File No. 333-119264), filed on
    September 24, 2004.)                                                                                                                                                                                                                                                      
|        | 10 | .18 |             | Form of Collateral Assignment of Partnership Interest and
    Pledge Agreement
    dated           ,
    between Education Realty Operating Partnership, LP and JPI
    Multifamily Investments L.P. (Incorporated by reference to
    Exhibit 10.18 to the Companys Registration Statement
    on
    Form S-11 (File No. 333-119264), filed on
    September 24, 2004.)                                                                                                                                                                                                      
|        | 10 | .19 |             | Form of Secured Non-Recourse Revolving Note dated 2005, issued
    by JPI Multifamily Investments L.P. to Education Realty
    Operating Partnership, LP. (Incorporated by reference to
    Exhibit 10.19 to the Companys Registration Statement
    on Form S-11 (File No. 333-119264), filed on
    September 24, 2004.)                                                                                                                                                                                                                                                     



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##### Table of Contents



|        |    |     |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|------- | -- | --- | ----------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |     |            
|Number  |    |     | Description
|        |    |     |            
|        | 10 | .20 |             | Purchase and Sale Agreement dated August 27, 2004 by and
    between The Gables, LLC and Education Realty Operating
    Partnership, LP. (Incorporated by reference to
    Exhibit 10.20 to the Companys Registration Statement
    on Form S-11 (File No. 333-119264), filed on
    September 24, 2004.)                                                                                                                                          
|        | 10 | .21 |             | Assignment and Assumption Agreement dated November 2, 2004,
    between Education Realty Operating Partnership, LP and
    Allen & OHara, Inc. related to Morgan
    Keegan & Company, Inc. financial advisory services
    agreement dated March 18, 2004. (Incorporated by reference
    to Exhibit 10.21 to the Companys Amendment No. 1
    to its Registration Statement on Form S-11 (File
    No. 333-1192364), filed on November 4, 2004.)
|        | 10 | .22 |             | Commitment Letter for Revolving Credit Facility by and among JP
    Morgan Chase Bank, UBS AG, Education Realty Operating
    Partnership, LP and the Registrant dated December 22, 2004.
    (Incorporated by reference to Exhibit 10.22 to the
    Companys Amendment No. 3 to its Registration
    Statement on Form S-11 (File No. 333-1192364), filed
    on January 3, 2005.)                                                                
|        | 10 | .23 |             | Property Management and Leasing Agreement (Jefferson
    Commons  Penn State) dated November 22, 2004, by
    and between Education Realty Operating Partnership, LP and JPI
    Management Services, L.P. (Incorporated by reference to
    Exhibit 10.23 to the Companys Amendment No. 2 to
    its Registration Statement on Form S-11 (File
    No. 333-1192364), filed on December 10, 2004.)                                                
|        | 10 | .24 |             | Property Management and Leasing Agreement (Jefferson
    Commons  Purdue) dated November 22, 2004, by and
    between Education Realty Operating Partnership, LP and JPI
    Management Services, L.P. (Incorporated by reference to
    Exhibit 10.24 to the Companys Amendment No. 2 to
    its Registration Statement on Form S-11 (File
    No. 333-1192364), filed on December 10, 2004.)                                                    
|        | 10 | .25 |             | Property Management and Leasing Agreement (Jefferson
    Commons  Western Michigan) dated November 22,
    2004, by and between Education Realty Operating Partnership, LP
    and JPI Management Services, L.P. (Incorporated by
    reference to Exhibit 10.25 to the Companys Amendment
    No. 2 to its Registration Statement on Form S-11 (File
    No. 333-1192364), filed on December 10, 2004.)                                          
|        | 10 | .26 |             | Property Management and Leasing Agreement (Jefferson
    Commons  Texas Tech) dated November 22, 2004, by
    and between Education Realty Operating Partnership, LP and JPI
    Management Services, L.P. (Incorporated by reference to
    Exhibit 10.26 to the Companys Amendment No. 2 to
    its Registration Statement on Form S-11 (File
    No. 333-1192364), filed on December 10, 2004.)                                                
|        | 10 | .27 |             | Property Management and Leasing Agreement (Jefferson
    Commons  Oklahoma State) dated November 22,
    2004, by and between Education Realty Operating Partnership, LP
    and JPI Management Services, L.P. (Incorporated by
    reference to Exhibit 10.27 to the Companys Amendment
    No. 2 to its Registration Statement on Form S-11 (File
    No. 333-1192364), filed on December 10, 2004.)                                            
|        | 10 | .28 |             | Property Management and Leasing Agreement (Jefferson
    Commons  Kansas) dated November 22, 2004, by and
    between Education Realty Operating Partnership, LP and JPI
    Management Services, L.P. (Incorporated by reference to
    Exhibit 10.28 to the Companys Amendment No. 2 to
    its Registration Statement on Form S-11 (File
    No. 333-1192364), filed on December 10, 2004.)                                                    
|        | 10 | .29 |             | Property Management and Leasing Agreement (Jefferson
    Commons  Knoxville) dated November 22, 2004, by
    and between Education Realty Operating Partnership, LP and JPI
    Management Services, L.P. (Incorporated by reference to
    Exhibit 10.29 to the Companys Amendment No. 2 to
    its Registration Statement on Form S-11 (File
    No. 333-1192364), filed on December 10, 2004.)                                                 
|        | 10 | .30 |             | Property Management and Leasing Agreement (Jefferson
    Commons  Columbia) dated November 22, 2004, by
    and between Education Realty Operating Partnership, LP and
    JPI Management Services, L.P. (Incorporated by reference to
    Exhibit 10.30 to the Companys Amendment No. 2 to
    its Registration Statement on Form S-11 (File
    No. 333-1192364), filed on December 10, 2004.)                                                  



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##### Table of Contents



|        |    |     |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|------- | -- | --- | ----------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |     |            
|Number  |    |     | Description
|        |    |     |            
|        | 10 | .31 |             | Property Management and Leasing Agreement (Jefferson
    Commons  Ohio State) dated December 8, 2004, by
    and between Education Realty Operating Partnership, LP and JPI
    Management Services, L.P. (Incorporated by reference to
    Exhibit 10.31 to the Companys Amendment No. 2 to
    its Registration Statement on Form S-11 (File
    No. 333-1192364), filed on December 10, 2004.)                                                                                   
|        | 10 | .32 |             | Employment Agreement between Education Realty Trust, Inc. and
    William W. Harris, dated as of December 6, 2004.
    (Incorporated by reference to Exhibit 10.32 to the
    Companys Amendment No. 2 to its Registration
    Statement on Form S-11 (File No. 333-1192364), filed
    on December 10, 2004.)                                                                                                                                                                       
|        | 10 | .33 |             | Employment Agreement between Education Realty Trust, Inc. and
    Thomas J. Hickey, dated as of December 6, 2004.
    (Incorporated by reference to Exhibit 10.33 to the
    Companys Amendment No. 2 to its Registration
    Statement on Form S-11 (File No. 333-1192364), filed
    on December 10, 2004.)                                                                                                                                                                        
|        | 10 | .34 |             | Underwriting Agreement dated January 25, 2005 among
    Education Realty Trust, Inc. and the underwriters named therein.
    (Incorporated by reference to Exhibit 1.1 to the
    Companys Current Report on Form 8-K (File
    No. 001-32417), filed on January 28, 2005.)                                                                                                                                                                                                          
|        | 10 | .35 |             | Credit Agreement, dated January 31, 2005, by and among
    Education Realty Operating Partnership, LP and certain of its
    subsidiaries, as Borrower, JPMorgan Chase Bank, N.A. and UBS
    Loan Finance LLC, as Lenders, JPMorgan Chase Bank, N.A., as
    Administrative Agent, and UBS Securities LLC, as Syndication
    Agent. (Incorporated by reference to Exhibit 10.1 to the
    Companys Current Report on Form 8-K (File No. 001-32417),
    filed on February 2, 2005.)
|        | 21 | .1  |             | List of Subsidiaries of the Registrant. (Incorporated by
    reference to Exhibit 21.1 to the Companys
    Post-Effective Amendment No. 1 to its Registration
    Statement on Form S-11 (File No. 333-119264), filed on
    January 27, 2005.)                                                                                                                                                                                                                                      
|        | 31 | .1  |             | Certificate of Principal Executive Officer pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                                             
|        | 31 | .2  |             | Certificate of Principal Financial Officer pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                                             
|        | 32 | .1  |             | Certificate of Chief Executive Officer and Chief Financial
    Officer.