##### Table of Contents



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, 2008
 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.
  Maryland
(State or Other Jurisdiction of 
Incorporation or Organization)
    
    20-1352180
(IRS Employer
Identification No.)530 Oak Court Drive, Suite 300
Memphis Tennessee
(Address of Principal Executive Offices)
    
    38117
(Zip Code)
   Title of Each Class
    
    Name Of Each Exchange On Which RegisteredCommon Stock, $.01 par value per share
    
    New York Stock Exchange
 None
 Yes o No þ
 o þ
 þ o
 o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
(Do not check if a smaller reporting company)
    
    Smaller reporting company o
 o þ




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DOCUMENTS INCORPORATED BY REFERENCE
  FORWARD-LOOKING STATEMENTS
    2




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##### 



EDUCATION REALTY TRUST, INC. FISCAL 2008 FORM 10-K
 PART IItem 1. Business
    
    
    4Item 1A. Risk Factors
    
    
    12Item 1B. Unresolved Staff Comments
    
    
    24Item 2. Properties
    
    
    25Item 3. Legal Proceedings
    
    
    29Item 4. Submission of Matters to a Vote of Security Holders
    
    
    29PART IIItem 5. Market For Registrants Common Equity, Related Stockholder Matters and
Issuer Purchases of Equity Securities
    
    
    30Item 6. Selected Financial Data
    
    
    33Item 7. Managements Discussion and Analysis of Financial Condition and Results
of Operations
    
    
    38Item 7A. Quantitative and Qualitative Disclosures About Market Risk
    
    
    60Item 8. Financial Statements and Supplementary Data
    
    
    61Item 9. Changes in and Disagreements With Accountants on Accounting and Financial
Disclosure
    
    
    93Item 9A. Controls and Procedures
    
    
    93Item 9B. Other Information
    
    
    93PART IIIItem 10. Directors, Executive Officers and Corporate Governance
    
    
    93Item 11. Executive Compensation
    
    
    93Item 12. Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
    
    
    93Item 13. Certain Relationships and Related Transactions, and Director Independence
    
    
    94Item 14. Principal Accountant Fees and Services
    
    
    94PART IVItem 15. Exhibits and Financial Statement Schedules
    
    
    94Signatures
    
    
    95Exhibit 10.1Exhibit 10.9(1)Exhibit 10.35Exhibit 10.36(1)Exhibit 14Exhibit 21.1Exhibit 23.1Exhibit 31.1Exhibit 31.2Exhibit 32.1
   3




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PART I
 
 Item 1. Business.
  Our Company
     REIT Status and Taxable REIT Subsidiary
  Business and Growth Strategy
   4




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Acquisition and Development Strategy
  
    
    university and 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;
    
    past operating performance;
    
    potential for improved management;
    
    ownership and capital structure;
    
    presence of desired amenities;
    
    maintenance and condition of the property;
    
    access to a university-sponsored or public transportation line; and
    
    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; and
    
    negotiating service-level pricing arrangements with national and
regional vendors and requiring corporate-level approval of service
agreements for each community.
  5




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Proactive marketing practices.
 Develop and retain personnel.
 Maintain and develop strategic relationships.
 Third-Party Services
   Third-party management services
   6




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Property
    
    University
    
    # of Beds
    
    
    # of UnitsOn-campus propertiesUniversity Park  Calhoun Street Apartments
    
    University of Cincinnati
    
    
    747
    
    
    
    288Reinhard Villages
    
    Clarion University of Pennsylvania
    
    
    656
    
    
    
    180University Park
    
    Salisbury University (Maryland)
    
    
    578
    
    
    
    145University Park  Phase II
    
    Salisbury University (Maryland)
    
    
    312
    
    
    
    108Bettie Johnson Hall
    
    University of Louisville
    
    
    490
    
    
    
    224Herman & Heddy Kurz Hall
    
    University of Louisville
    
    
    402
    
    
    
    224Billy Minardi Hall
    
    University of Louisville
    
    
    38
    
    
    
    20Community Park
    
    University of Louisville
    
    
    358
    
    
    
    101University Village
    
    California State University  San Marcos
    
    
    620
    
    
    
    126Arlington Park Apartments
    
    University of Northern Colorado
    
    
    394
    
    
    
    179Blazer Hall
    
    University of Alabama  Birmingham
    
    
    753
    
    
    
    190Total on-campus
    
    
    
    
    5,348
    
    
    
    1,785Off-campus propertiesGranville Towers
    
    University of North Carolina at Chapel Hill
    
    
    1,321
    
    
    
    363Honeysuckle Apartments
    
    Bloomsburg University of Pennsylvania
    
    
    407
    
    
    
    104Evergreen Commons
    
    Lock Haven University of Pennsylvania
    
    
    408
    
    
    
    108Campus Village
    
    University of Colorado  Denver
    
    
    685
    
    
    
    210The College Inn
    
    North Carolina State University
    
    
    440
    
    
    
    121Upper Eastside Lofts
    
    Sacramento State University
    
    
    382
    
    
    
    140The Courtyards (2)
    
    University of Michigan
    
    
    895
    
    
    
    320Vulcan Village I
    
    California University of Pennsylvania
    
    
    432
    
    
    
    108Vulcan Village II
    
    California University of Pennsylvania
    
    
    338
    
    
    
    91University Village (1)
    
    University of North Carolina  Greensboro
    
    
    600
    
    
    
    203University Village Towers (1)
    
    University of California  Riverside
    
    
    548
    
    
    
    149The Reserve on Stinson (1)
    
    University of Oklahoma
    
    
    612
    
    
    
    204Fontainebleu (1)
    
    University of California  Santa Barbara
    
    
    435
    
    
    
    99Total off-campus
    
    
    
    
    7,503
    
    
    
    2,220Totals (for both on- and off-campus)
    
    
    
    
    12,851
    
    
    
    4,005
 (1)
    
    EDR holds a minority interest in the
community pursuant to its joint venture
arrangements.(2)
    
    In April of 2009, an additional 613 beds and
217 units are scheduled to open and are included
in the total number of beds and units above. 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;
    
    design, purchase and installation of furniture;
    
    pre-opening marketing to students; and
    
    obtaining final approvals of construction.
   7




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Our Operations
   Residence Life and Student Development
  
    
    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.
   8




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Marketing
    Leasing
     Strategic Relationships
   9




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Competition
 Competition from universities
   Competition from private owners
  Employees
  
    
    1,166 on-site employees, including 527 Community Assistants;
    
    23 people in our property management services department;
    
    13 people in our development consulting services department; and
    
    57 executive, corporate administration and financial personnel.
  10




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NumberKey Employees
    
    Title
    
    of YearsPaul O. Bower
    
    Chairman, Chief Executive Officer
and President
    
    
    39Craig L. Cardwell
    
    President of Allen & OHara
Education Services, Inc.
    
    
    37Thomas J. Hickey
    
    Senior Vice President of Operations
    
    
    36Thomas Trubiana
    
    Senior Vice President and Chief
Investment Officer
    
    
    32Wallace L. Wilcox
    
    Vice President of Construction and
Engineering
    
    
    28William W. Harris
    
    Senior Vice President of Development
and Senior Vice President of Allen &
OHara Development Company
    
    
    26Susan B. Arrison
    
    Vice President of Human Resources
    
    
    18Randall H. Brown
    
    Executive Vice President and Chief
Financial Officer
    
    
    9
 NYSE Certifications
  Code of Business Conduct and Ethics
 www.educationrealty.com
 Available Information
    11




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Item 1A. Risk Factors.
 Risks related to our properties, our business and the real estate industry
 Adverse macroeconomic and business conditions may significantly and negatively affect our cash
flows, profitability and results of operations.
   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.
   12




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Broad market fluctuations could negatively impact the market price of our common stock.
  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;
    
    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;
    
    we may cross default our Amended Revolver which would preclude further
availability; and
    
    foreclosures could create taxable income without accompanying cash
proceeds, a circumstance that could hinder our ability to meet the
REIT distribution requirements.
 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.
  We may not be able to recover internal development costs.
  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.
    14




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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 incur an increase in operating costs or may not have the
proceeds available to implement renovations or improvements at
existing properties which are necessary to attract and retain tenants;
    
    we may be unable to quickly and efficiently integrate new
acquisitions, particularly acquisitions of portfolios of properties,
into our existing operations;
    
    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.
  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;
    
    inability to finance property development and acquisitions 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;
    
    decreases in student enrollment at particular colleges and
universities;
    
    changes in university policies related to admissions;
    
    national, regional and local economic conditions; and
    
    rising interest rates.
  15




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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.
  Additional issuances of equity securities may be dilutive to stockholders.
  We may reduce the amount of dividends declared on our common stock or elect to pay a portion of the
dividend in shares of our common stock
   Current market conditions could affect our ability to refinance existing indebtedness or obtain
additional financing on acceptable terms and may have other adverse effects on us.
   16




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Our ownership of properties through ground leases exposes us to the loss of such properties upon
breach or termination of the ground leases.
  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.
   17




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Certain losses may not be covered by insurance or may be underinsured.
  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.
    18




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We could be exposed to liability and remedial costs related to environmental matters.
      We may incur significant costs complying with the Americans with Disabilities Act and similar laws.
   19




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We may incur significant costs complying with other regulations.
  Joint venture investments could be adversely affected by our lack of sole decision making
authority, our reliance on co-venturers financial condition and disputes between our co-venturers
and us.
  Illiquidity of real estate investments could significantly impede our ability to respond to adverse
changes in the performance of our properties.
    20




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Risks related to our organization and structure
 To maintain our REIT status, we may be forced to limit the activities of our Management Company.
  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.
  
    
    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.
  22




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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 1B. Unresolved Staff Comments.
   24




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Item 2. Properties.
 General
     
    
    located in close proximity to university campuses (within two miles or
less);
    
    average age of approximately 10 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.
  25




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Properties
  Year EndedDecember 31, 2008Average
    
    
    Monthly
    
    
    Revenue perYear
    
    
    Acquisition
    
    
    # of
    
    
    # of
    
    
    Occupancy
    
    
    Total
    
    
    AvailableName
    
    Primary University Served
    
    Built
    
    
    Date
    
    
    Beds
    
    
    Units
    
    
    Rate(1)
    
    
    Revenue
    
    
    Bed(2)Owned and OperatedNorthPointe
    
    University of ArizonaTucson, Arizona
    
    
    1999
    
    
    Jan 05
    
    
    912
    
    
    
    300
    
    
    
    91.4
    %
    
    $
    319
    
    
    $
    350The Reserve at Athens
    
    University of Georgia Athens,Georgia
    
    
    1999
    
    
    Jan 05
    
    
    612
    
    
    
    200
    
    
    
    97.3
    
    
    
    241
    
    
    
    394The Reserve at Clemson
    
    Clemson UniversityClemson, South Carolina
    
    
    1999
    
    
    Jan 05
    
    
    590
    
    
    
    177
    
    
    
    93.6
    
    
    
    190
    
    
    
    322Players Club
    
    Florida State UniversityTallahassee, Florida
    
    
    1994
    
    
    Jan 05
    
    
    336
    
    
    
    84
    
    
    
    98.3
    
    
    
    146
    
    
    
    434The Gables
    
    Western Kentucky UniversityBowling Green, Kentucky
    
    
    1996
    
    
    Jan 05
    
    
    288
    
    
    
    72
    
    
    
    95.6
    
    
    
    88
    
    
    
    306College Station
    
    Augusta State UniversityAugusta, Georgia
    
    
    1989
    
    
    Jan 05
    
    
    203
    
    
    
    61
    
    
    
    58.4
    
    
    
    35
    
    
    
    171University Towers (5)
    
    North Carolina State UniversityRaleigh, North Carolina
    
    
    1989
    
    
    Jan 05
    
    
    953
    
    
    
    251
    
    
    
    75.5
    
    
    
    450
    (4)
    
    
    472
    (4)The Pointe at South Florida
    
    University of South FloridaTampa, Florida
    
    
    1999
    
    
    Jan 05
    
    
    1,002
    
    
    
    336
    
    
    
    85.8
    
    
    
    370
    
    
    
    369Commons at Knoxville
    
    University of TennesseeKnoxville, Tennessee
    
    
    1999
    
    
    Jan 05
    
    
    708
    
    
    
    211
    
    
    
    99.1
    
    
    
    328
    
    
    
    463The Commons
    
    Florida State UniversityTallahassee, Florida
    
    
    1997
    
    
    Jan 05
    
    
    732
    
    
    
    252
    
    
    
    84.9
    
    
    
    249
    
    
    
    340The Reserve on Perkins
    
    Oklahoma State UniversityStillwater, Oklahoma
    
    
    1999
    
    
    Jan 05
    
    
    732
    
    
    
    234
    
    
    
    96.6
    
    
    
    244
    
    
    
    334The Reserve at Star Pass
    
    University of ArizonaTucson, Arizona
    
    
    2001
    
    
    Jan 05
    
    
    1,020
    
    
    
    336
    
    
    
    92.7
    
    
    
    384
    
    
    
    376The Pointe at Western
    
    Western Michigan UniversityKalamazoo, Michigan
    
    
    2000
    
    
    Jan 05
    
    
    876
    
    
    
    324
    
    
    
    87.7
    
    
    
    298
    
    
    
    341College Station at W. Lafayette
    
    Purdue University West Lafayette, Indiana
    
    
    2000
    
    
    Jan 05
    
    
    960
    
    
    
    336
    
    
    
    94.7
    
    
    
    351
    
    
    
    366Commons on Kinnear
    
    The Ohio State UniversityColumbus, Ohio
    
    
    2000
    
    
    Jan 05
    
    
    502
    
    
    
    166
    
    
    
    98.1
    
    
    
    239
    
    
    
    476The Pointe
    
    Pennsylvania State UniversityState College, Pennsylvania
    
    
    1999
    
    
    Jan 05
    
    
    984
    
    
    
    294
    
    
    
    99.0
    
    
    
    414
    
    
    
    420The Reserve at Columbia
    
    University of MissouriColumbia, Missouri
    
    
    2000
    
    
    Jan 05
    
    
    676
    
    
    
    260
    
    
    
    97.8
    
    
    
    249
    
    
    
    369The Reserve on Frankford
    
    Texas Tech UniversityLubbock, Texas
    
    
    1997
    
    
    Jan 05
    
    
    737
    
    
    
    243
    
    
    
    88.8
    
    
    
    232
    
    
    
    315The Lofts
    
    University of Central FloridaOrlando, Florida
    
    
    2002
    
    
    Jan 05
    
    
    730
    
    
    
    254
    
    
    
    98.3
    
    
    
    444
    
    
    
    609The Reserve on West 31st
    
    University of KansasLawrence, Kansas
    
    
    1998
    
    
    Jan 05
    
    
    720
    
    
    
    192
    
    
    
    95.6
    
    
    
    242
    
    
    
    336Campus Creek
    
    University of MississippiOxford, Mississippi
    
    
    2004
    
    
    Feb 05
    
    
    636
    
    
    
    192
    
    
    
    93.4
    
    
    
    248
    
    
    
    391Pointe West
    
    University of South CarolinaCayce, South Carolina
    
    
    2003
    
    
    Mar 05
    
    
    480
    
    
    
    144
    
    
    
    97.0
    
    
    
    213
    
    
    
    444Campus Lodge
    
    University of FloridaGainesville, Florida
    
    
    2001
    
    
    Jun 05
    
    
    1,116
    
    
    
    360
    
    
    
    91.6
    
    
    
    566
    
    
    
    507College Grove
    
    Middle Tennessee State UniversityMurfreesboro, Tennessee
    
    
    1998
    
    
    Apr 05
    
    
    864
    
    
    
    240
    
    
    
    98.6
    
    
    
    304
    
    
    
    351The Reserve on South College
    
    Auburn UniversityAuburn, Alabama
    
    
    1999
    
    
    Jul 05
    
    
    576
    
    
    
    180
    
    
    
    93.7
    
    
    
    203
    
    
    
    353The Avenue at Southern
    
    Georgia Southern UniversityStatesboro, Georgia
    
    
    1993
    
    
    Jun 06
    
    
    624
    
    
    
    214
    
    
    
    84.2
    
    
    
    193
    
    
    
    309The Reserve at Saluki Pointe
    
    Southern Illinois UniversityCarbondale, Illinois
    
    
    2008
    
    
    Aug 08
    
    
    528
    
    
    
    132
    
    
    
    99.0
    
    
    
    239
    
    
    
    452Troy Place (6)
    
    Troy State UniversityTroy, Alabama
    
    
    2000
    
    
    Jan 06
    
    
    408
    
    
    
    108
    
    
    
    95.7
    
    
    
    141
    
    
    
    346The Reserve at Jacksonville (6)
    
    Jacksonville State UniversityJacksonville, Alabama
    
    
    2000
    
    
    Jan 06
    
    
    504
    
    
    
    132
    
    
    
    80.6
    
    
    
    149
    
    
    
    296Macon Place (6)
    
    Macon State CollegeMacon, Georgia
    
    
    1999
    
    
    Jan 06
    
    
    336
    
    
    
    84
    
    
    
    84.6
    
    
    
    104
    
    
    
    311Clayton Place (6)
    
    Clayton College & State UniversityMorrow, Georgia
    
    
    1999
    
    
    Jan 06
    
    
    854
    
    
    
    221
    
    
    
    68.4
    
    
    
    255
    
    
    
    298
  26




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##### Table of Contents



Year EndedDecember 31, 2008Average
    
    
    Monthly
    
    
    Revenue perYear
    
    
    Acquisition
    
    
    # of
    
    
    # of
    
    
    Occupancy
    
    
    Total
    
    
    AvailableName
    
    Primary University Served
    
    Built
    
    
    Date
    
    
    Beds
    
    
    Units
    
    
    Rate(1)
    
    
    Revenue
    
    
    Bed(2)River Place (6)
    
    State University of West GeorgiaCarrollton, Georgia
    
    
    2000
    
    
    Jan 06
    
    
    504
    
    
    
    132
    
    
    
    77.5
    
    
    
    143
    
    
    
    285The Chase at Murray (6)
    
    Murray State UniversityMurray, Kentucky
    
    
    2000
    
    
    Jan 06
    
    
    408
    
    
    
    108
    
    
    
    83.8
    
    
    
    113
    
    
    
    276Cape Place (6)
    
    Southeast Missouri State UniversityCape Girardeau, Missouri
    
    
    2000
    
    
    Jan 06
    
    
    360
    
    
    
    96
    
    
    
    97.4
    
    
    
    116
    
    
    
    321Clemson Place (6)
    
    Clemson University
    
    
    1998
    
    
    Jan 06
    
    
    288
    
    
    
    96
    
    
    
    91.8
    
    
    
    91
    
    
    
    315The Reserve at Martin (6)
    
    University of Tennessee at MartinMartin, Tennessee
    
    
    2000
    
    
    Jan 06
    
    
    384
    
    
    
    96
    
    
    
    81.1
    
    
    
    119
    
    
    
    311Berkeley Place (6)
    
    Clemson UniversityClemson, South Carolina
    
    
    1999
    
    
    Jan 06
    
    
    480
    
    
    
    132
    
    
    
    83.2
    
    
    
    143
    
    
    
    297Carrollton Place (6)
    
    State University of West GeorgiaCarrollton, Georgia
    
    
    1998
    
    
    Jan 06
    
    
    336
    
    
    
    84
    
    
    
    95.8
    
    
    
    110
    
    
    
    327The Pointe at Southern (6)
    
    Georgia Southern UniversityStatesboro, Georgia
    
    
    1999
    
    
    Jan 06
    
    
    528
    
    
    
    132
    
    
    
    78.9
    
    
    
    151
    
    
    
    285Western Place (6)
    
    Western Kentucky UniversityBowling Green, Kentucky
    
    
    2000
    
    
    Jan 06
    
    
    504
    
    
    
    132
    
    
    
    89.2
    
    
    
    137
    
    
    
    272Total owned and operated properties
    
    
    
    
    1999
    (3)
    
    
    
    
    
    
    24,991
    
    
    
    7,598
 (1)
    
    Average of the physical month-end occupancy rates.(2)
    
    Monthly revenue per available bed for 2008 is equal to total revenue for the year ended December 31, 2008 divided
by the sum of the total beds (including staff and model beds) at the property each month. For properties acquired
during the year, monthly revenue per available bed equals total revenue for the period subsequent to acquisition
through December 31, 2008 divided by the sum of the total beds (including staff and model beds) at the property
each month while owned.(3)
    
    Represents average for all properties in portfolio.(4)
    
    Revenues and revenue per available bed for University Towers excludes revenue from food service operations.(5)
    
    During 2008, the Trust sold the parking garage and land associated with the University Towers residence hall and
subsequently entered into a 40-year ground lease.(6)
    
    During February 2008, the lease with Place Properties LLC was terminated, and EDR began operating these properties.  27




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##### Table of Contents



Mortgage and Construction Indebtedness
  Outstanding as ofDecember 31,
    
    
    
    
    
    
    MaturityProperty
    
    2008
    
    
    Interest Rate
    
    
    Date
    
    
    AmortizationUniversity Towers
    
    $
    25,000
    
    
    
    5.99
    %
    
    
    7/1/2013
    
    
    30 YearThe Reserve at Clemson
    
    
    12,000
    
    
    
    5.55
    %
    
    
    3/1/2012
    
    
    30 YearThe Gables
    
    
    4,291
    
    
    
    5.50
    %
    
    
    11/1/2013
    
    
    30 YearNorthPointe
    
    
    18,800
    
    
    
    5.55
    %
    
    
    3/1/2012
    
    
    30 YearThe Pointe at S. Florida/The Reserve at
Columbia/ The Commons at Knoxville/College
Grove
    
    
    60,263
    
    
    
    6.02
    %
    
    
    1/1/2019
    
    
    30 YearThe Reserve at Perkins
    
    
    15,492
    
    
    
    5.99
    %
    
    
    1/1/2014
    
    
    30 YearThe Lofts
    
    
    27,000
    
    
    
    5.59
    %
    
    
    5/1/2014
    
    
    30 YearCollege Station at W. Lafayette/The Pointe at
Penn State/The Reserve at Star Pass
    
    
    72,106
    
    
    
    6.02
    %
    
    
    1/1/2016
    
    
    30 YearCampus Lodge
    
    
    35,841
    
    
    
    6.97
    %
    
    
    5/1/2012
    
    
    30 YearPointe West
    
    
    10,637
    
    
    
    4.92
    %
    
    
    8/1/2014
    
    
    30 YearThe Pointe at Western/The Commons on
Kinnear/The Reserve on South College/The
Avenue at Southern
    
    
    42,854
    
    
    
    3.91
    %
    
    
    1/1/2014
    
    
    30 YearThe Reserve on Frankford
    
    
    7,020
    
    
    
    3.81
    %
    
    
    1/1/2014
    
    
    30 YearReserve at Saluki Pointe
    
    
    10,901
    
    
    
    2.54
    %
    
    
    6/28/2012
    
    
    30 YearSyracuse University Development Project
    
    
    191
    
    
    
    2.30
    %
    
    
    9/29/2013
    
    
    30 YearTroy Place
    
    
    9,440
    
    
    
    6.44
    %
    
    
    12/9/2009
    
    
    30 YearThe Reserve at Jacksonville
    
    
    11,120
    
    
    
    6.44
    %
    
    
    12/9/2009
    
    
    30 YearMacon Place
    
    
    7,440
    
    
    
    6.44
    %
    
    
    12/9/2009
    
    
    30 YearClayton Place
    
    
    24,540
    
    
    
    6.44
    %
    
    
    12/9/2009
    
    
    30 YearRiver Place
    
    
    13,680
    
    
    
    6.44
    %
    
    
    12/9/2009
    
    
    30 YearThe Chase at Murray
    
    
    6,800
    
    
    
    6.44
    %
    
    
    12/9/2009
    
    
    30 YearCape Place
    
    
    8,520
    
    
    
    6.44
    %
    
    
    12/9/2009
    
    
    30 YearClemson Place
    
    
    8,160
    
    
    
    6.44
    %
    
    
    12/9/2009
    
    
    30 YearThe Reserve at Martin
    
    
    8,960
    
    
    
    6.44
    %
    
    
    12/9/2009
    
    
    30 YearTotal debt /weighted average rate
    
    
    441,056
    
    
    
    5.77
    %Unamortized premium
    
    
    1,203Total mortgage loans net of unamortized premium
    
    
    442,259Less current portion of mortgage debt
    
    
    (101,631
    )Total long-term debt, net of current portion
    
    $
    340,628
 
  28




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##### Table of Contents



Item 3. Legal Proceedings.
  
 Item 4. Submission of Matters to a Vote of Security Holders.
   29




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##### Table of Contents



PART II
 
 Item 5. Market For Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities.
 Market Information
  DistributionsHigh
    
    
    Low
    
    
    DeclaredFiscal 2007Quarter 1
    
    $
    15.48
    
    
    $
    13.99
    
    
    $
    0.210Quarter 2
    
    
    14.99
    
    
    
    13.69
    
    
    
    0.210Quarter 3
    
    
    14.39
    
    
    
    11.83
    
    
    
    0.210Quarter 4
    
    
    14.10
    
    
    
    10.75
    
    
    
    0.210Fiscal 2008Quarter 1
    
    $
    13.50
    
    
    $
    10.29
    
    
    $
    0.210Quarter 2
    
    
    14.31
    
    
    
    11.65
    
    
    
    0.210Quarter 3
    
    
    13.00
    
    
    
    10.33
    
    
    
    0.210Quarter 4
    
    
    10.83
    
    
    
    2.60
    
    
    
    0.103
   Direct stock purchase and dividend reinvestment plan
  
    
    automatic reinvestment of some or all of the cash distributions paid
on common stock, shares of other classes of stock that we might issue
in the future and units of limited partnership interest;
    
    an opportunity to make an initial purchase of our common stock and to
acquire additional shares over time; and
    
    safekeeping of shares and accounting for distributions received and
reinvested at no cost.
 
  30




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##### Table of Contents



MaximumNumber (orApproximateDollar Value) ofTotal Number of
    
    
    Shares that MayShares Purchased as
    
    
    Yet BePart of Publicly
    
    
    PurchasedTotal Number
    
    
    Average Price Paid per
    
    
    Announced Plans or
    
    
    Under the PlansPeriod
    
    of Shares(1)
    
    
    Share
    
    
    Programs
    
    
    or ProgramsOctober 1-31, 2008
    
    
    449
    
    
    $
    8.14
    
    
    
    
    
    
    
    November 1-30, 2008
    
    
    4,191
    
    
    $
    3.74
    
    
    
    
    
    
    
    December 1-31, 2008
    
    
    1,062
    
    
    $
    4.42
    
    
    
    
    
    
    
    Total
    
    
    5,702
    
    
    $
    4.31
    
    
    
    
    
    
    
    
 
 (1)
    
    All shares purchased in the open market pursuant to the terms of our Amended and Restated
Dividend Reinvestment and Stock Purchase Plan.
  31




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##### Table of Contents



COMPARISON OF 35 MONTH CUMULATIVE TOTAL RETURN*  Among Education Realty Trust Inc., The S&P 500 Index
And The MSCI US REIT Index
 
 
 *
    
    $100 invested on 1/26/05 in stock or in index, including reinvestment of dividends. Fiscal year
ending December 31.
 Period EndingIndex
    
    01/26/05
    
    
    06/30/05
    
    
    12/31/05
    
    
    06/30/06
    
    
    12/31/06
    
    
    06/30/07
    
    
    12/31/07
    
    
    06/30/08
    
    
    12/31/08Education Reality Trust, Inc
    
    
    100.00
    
    
    
    112.57
    
    
    
    82.17
    
    
    
    110.59
    
    
    
    101.28
    
    
    
    98.90
    
    
    
    81.68
    
    
    
    87.59
    
    
    
    41.82S&P 500
    
    
    100.00
    
    
    
    102.31
    
    
    
    108.21
    
    
    
    111.14
    
    
    
    125.30
    
    
    
    134.02
    
    
    
    132.18
    
    
    
    116.44
    
    
    
    83.28MSCI US REIT
    
    
    100.00
    
    
    
    115.39
    
    
    
    121.67
    
    
    
    138.07
    
    
    
    165.37
    
    
    
    154.71
    
    
    
    137.57
    
    
    
    132.82
    
    
    
    85.33
    32




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##### Table of Contents



Number of SecuritiesRemaining Available forNumber of Securities to
    
    
    Weighted Average
    
    
    Future Issuance underbe Issued upon Exercise
    
    
    Exercise Price of
    
    
    Equity Compensationof Outstanding Options,
    
    
    Outstanding Options
    
    
    Plans (excludingPlan Category
    
    Warrants and Rights(1)
    
    
    Warrants and Rights(1)
    
    
    securities reflected in column (a))(a)
    
    
    (b)
    
    
    (c)Equity compensation
plans approved by
security holders
    
    
    N/A
    
    
    
    N/A
    
    
    
    832,000
    (2)Equity compensation
plans not approved
by security holders
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/ATotal
    
    
    N/A
    
    
    
    N/A
    
    
    
    832,000
 (1)
    
    Does not include 208,000 shares of restricted stock that are subject
to vesting requirements and 275,000 PIUs which were issued through
EDRs 2004 Incentive Plan.(2)
    
    The 2004 Incentive Plan initially reserved 800,000 shares of our
common stock for issuance under the plan. The amount of shares may
be increased annually on January 1st of each year so that the total
number of shares reserved under the 2004 Incentive Plan is equal to 4%
of the aggregate number of shares outstanding on the last day of the
preceding fiscal year; provided that such annual increase generally
may not exceed 80,000 shares. Recent Sales of Unregistered Securities
  
 Item 6. Selected Financial Data.
   
    
    the student housing operations of Education Properties Trust, LLC (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.
   33




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##### Table of Contents



STATEMENT OF OPERATIONS DATA
 EDREducation Realty Trust, Inc.
    
    
    PredecessorYear Ended December 31,2008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004(In thousands, except share and per share data)Revenues:Student housing leasing
revenue
    
    $
    107,566
    
    
    $
    85,651
    
    
    $
    81,202
    
    
    $
    70,010
    
    
    $
    17,896Student housing food service
revenue
    
    
    2,378
    
    
    
    2,359
    
    
    
    3,634
    
    
    
    3,491
    
    
    
    3,137Other leasing revenue
    
    
    7,145
    
    
    
    13,811
    
    
    
    14,012
    
    
    
    
    
    
    
    Third-party development
consulting services
    
    
    8,303
    
    
    
    5,411
    
    
    
    3,773
    
    
    
    1,759
    
    
    
    392Third-party management revenue
    
    
    3,672
    
    
    
    3,391
    
    
    
    2,796
    
    
    
    1,968
    
    
    
    1,326Operating expense
reimbursements
    
    
    10,796
    
    
    
    9,330
    
    
    
    7,638
    
    
    
    6,694
    
    
    
    5,223Total revenues
    
    
    139,860
    
    
    
    119,953
    
    
    
    113,055
    
    
    
    83,922
    
    
    
    27,974Operating expenses:Student housing leasing
operations
    
    
    55,569
    
    
    
    41,215
    
    
    
    39,503
    
    
    
    34,758
    
    
    
    7,645Student housing food service
operations
    
    
    2,257
    
    
    
    2,236
    
    
    
    3,318
    
    
    
    3,275
    
    
    
    2,899Reimbursable operating
expenses
    
    
    10,796
    
    
    
    9,330
    
    
    
    7,638
    
    
    
    6,694
    
    
    
    5,223General and administrative
    
    
    16,348
    
    
    
    14,561
    
    
    
    12,331
    
    
    
    12,549
    
    
    
    3,545Depreciation and amortization
    
    
    29,417
    
    
    
    32,223
    
    
    
    34,035
    
    
    
    26,845
    
    
    
    3,120Loss on asset impairment
    
    
    2,021
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total operating expenses
    
    
    116,408
    
    
    
    99,565
    
    
    
    96,825
    
    
    
    84,121
    
    
    
    22,432Operating income (loss)
    
    
    23,452
    
    
    
    20,388
    
    
    
    16,230
    
    
    
    (199
    )
    
    
    5,542Nonoperating expenses
    
    
    30,208
    
    
    
    27,675
    
    
    
    29,933
    
    
    
    17,266
    
    
    
    5,786Loss before equity in earnings of
unconsolidated entities
    
    
    (6,756
    )
    
    
    (7,287
    )
    
    
    (13,703
    )
    
    
    (17,465
    )
    
    
    (244
    )Equity in earnings (losses) of
unconsolidated entities
    
    
    (196
    )
    
    
    (277
    )
    
    
    740
    
    
    
    880
    
    
    
    1,002Income (loss) before income taxes
and minority interest
    
    
    (6,952
    )
    
    
    (7,564
    )
    
    
    (12,963
    )
    
    
    (16,585
    )
    
    
    758Taxes
    
    
    1,123
    
    
    
    258
    
    
    
    659
    
    
    
    497
    
    
    
    Income (loss) before minority
interest
    
    
    (8,075
    )
    
    
    (7,822
    )
    
    
    (13,622
    )
    
    
    (17,082
    )
    
    
    758Minority interest benefit
    
    
    (128
    )
    
    
    (39
    )
    
    
    (404
    )
    
    
    (1,073
    )
    
    
    Income (loss) from continuing
operations
    
    
    (7,947
    )
    
    
    (7,783
    )
    
    
    (13,218
    )
    
    
    (16,009
    )
    
    
    758Discontinued operations:Income from operations of
discontinued operations
    
    
    
    
    
    
    788
    
    
    
    973
    
    
    
    475
    
    
    
    Gain on sale of student
housing property
    
    
    
    
    
    
    1,579
    
    
    
    
    
    
    
    
    
    
    
    Income from discontinued operations
    
    
    
    
    
    
    2,367
    
    
    
    973
    
    
    
    475
    
    
    
    Net income (loss)
    
    $
    (7,947
    )
    
    $
    (5,416
    )
    
    $
    (12,245
    )
    
    $
    (15,534
    )
    
    $
    758
  34




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##### Table of Contents



EDREducation Realty Trust, Inc.
    
    
    PredecessorYear Ended December 31,2008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004(In thousands, except share and per share data)Earnings per share information:Income (loss) per share 
basic and dilutedContinuing operations
    
    
    (0.28
    )
    
    
    (0.28
    )
    
    
    (0.50
    )
    
    
    (0.69
    )Discontinued operations
    
    
    
    
    
    
    0.08
    
    
    
    0.04
    
    
    
    0.02Net loss per share
    
    $
    (0.28
    )
    
    $
    (0.20
    )
    
    $
    (0.46
    )
    
    $
    (0.67
    )Weighted average common shares
outstanding  basic and
diluted
    
    
    28,455,713
    
    
    
    28,010,144
    
    
    
    26,387,547
    
    
    
    23,063,110Distributions per common share
    
    $
    0.82
    
    
    $
    0.82
    
    
    $
    1.10
    
    
    $
    0.79
 BALANCE SHEET DATA
 As of December 31,EDREducation Realty  Trust, Inc.
    
    
    Predecessor2008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004(In thousands)Assets:Student housing properties, net
    
    $
    733,507
    
    
    $
    732,979
    
    
    $
    804,759
    
    
    $
    620,305
    
    
    $
    83,785Other assets, net
    
    
    44,140
    
    
    
    34,481
    
    
    
    30,699
    
    
    
    83,744
    
    
    
    5,089Total assets
    
    $
    777,647
    
    
    $
    767,460
    
    
    $
    835,458
    
    
    $
    704,049
    
    
    $
    88,874Liabilities and equity:Mortgage and construction
notes payable
    
    $
    442,259
    
    
    $
    420,940
    
    
    $
    423,933
    
    
    $
    328,335
    
    
    $
    81,111Other indebtedness
    
    
    32,900
    
    
    
    11,500
    
    
    
    69,400
    
    
    
    
    
    
    
    Other liabilities
    
    
    20,559
    
    
    
    19,080
    
    
    
    19,837
    
    
    
    17,255
    
    
    
    5,974Total liabilities
    
    
    495,718
    
    
    
    451,520
    
    
    
    513,170
    
    
    
    345,590
    
    
    
    87,085Minority interest
    
    
    14,669
    
    
    
    18,121
    
    
    
    19,289
    
    
    
    27,926
    
    
    
    Equity
    
    
    267,260
    
    
    
    297,819
    
    
    
    302,999
    
    
    
    330,533
    
    
    
    1,789Total liabilities and equity
    
    $
    777,647
    
    
    $
    767,460
    
    
    $
    835,458
    
    
    $
    704,049
    
    
    $
    88,874
  35




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##### Table of Contents



OTHER DATA (UNAUDITED)
 As of December 31,EDREducation Realty Trust, Inc.
    
    
    Predecessor2008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004(In thousands, except per share and selected property information)Funds from operations (FFO) (1):Net income (loss)
    
    $
    (7,947
    )
    
    $
    (5,416
    )
    
    $
    (12,245
    )
    
    $
    (15,534
    )
    
    $
    758Gain on sale of student
housing property, net of
minority interest
    
    
    
    
    
    
    (1,579
    )
    
    
    
    
    
    
    
    
    
    
    Loss on sale of student
housing assets
    
    
    512
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Student housing property
depreciation and amortization
of lease intangibles
    
    
    28,819
    
    
    
    31,780
    
    
    
    33,680
    
    
    
    26,845
    
    
    
    3,120Equity portion of real estate
depreciation and amortization
on equity investees
    
    
    496
    
    
    
    424
    
    
    
    54
    
    
    
    
    
    
    
    Depreciation and amortization
of discontinued operations
    
    
    
    
    
    
    711
    
    
    
    2,048
    
    
    
    2,323
    
    
    
    Minority interest benefit
    
    
    (128
    )
    
    
    (6
    )
    
    
    (355
    )
    
    
    (1,040
    )
    
    
    Funds from operations
available to all share and
unitholders
    
    $
    21,752
    
    
    $
    25,914
    
    
    $
    23,182
    
    
    $
    12,594
    
    
    $
    3,878Elimination of impairment and
refinancing charges:Development cost write-off,
net of tax benefit
    
    
    417
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Loss on asset impairment
    
    
    2,021
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Loss on extinguishment of debt
    
    
    4,360
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Impact of impairment and
refinancing charges
    
    
    6,798
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Funds from operations-
adjusted available to all
share and unitholders
    
    $
    28,550
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Cash flow information:Net cash provided by operations
    
    $
    26,011
    
    
    $
    26,806
    
    
    $
    25,187
    
    
    $
    18,373
    
    
    $
    3,068Net cash provided by (used in)
investing
    
    
    (31,656
    )
    
    
    33,399
    
    
    
    (120,830
    )
    
    
    (200,157
    )
    
    
    (181
    )Net cash provided by (used in)
financing
    
    
    10,614
    
    
    
    (62,598
    )
    
    
    40,408
    
    
    
    243,445
    
    
    
    (2,480
    )
  36




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##### Table of Contents



As of December 31,EDREducation Realty Trust, Inc.
    
    
    Predecessor2008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004(In thousands, except per share and selected property information)Per share and distribution data:Net loss per share basic and
diluted
    
    $
    (0.28
    )
    
    $
    (0.20
    )
    
    $
    (0.46
    )
    
    $
    (0.67
    )
    
    $
    (2,220
    )Cash distributions declared
per share/unit
    
    
    0.82
    
    
    
    0.82
    
    
    
    1.10
    
    
    
    0.79
    
    
    
    Cash distributions declared
    
    
    25,797
    
    
    
    22,985
    
    
    
    29,114
    
    
    
    18,721
    
    
    
    Selected property information (2):Units
    
    
    7,598
    
    
    
    5,913
    
    
    
    5,913
    
    
    
    5,699
    
    
    
    1,146Beds
    
    
    24,991
    
    
    
    18,571
    
    
    
    18,571
    
    
    
    17,947
    
    
    
    3,896Occupancy (3)
    
    
    90.3
    %
    
    
    93.6
    %
    
    
    93.1
    %
    
    
    92.0
    %
    
    
    89.2
    %Revenue per available bed (4)
    
    $
    371
    
    
    $
    384
    
    
    $
    370
    
    
    $
    368
    
    
    $
    421
 (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 available to all stockholders and unitholders 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. As such, we
also exclude the impact of minority interest in our calculation. 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 all owned and operated
properties for 2008 (40), 2007 (26), 2006 (26) and 2005 (25) (2007,
2006 and 2005 exclude the Place portfolio). For 2004, the data
represents the seven properties owned by the EDR Predecessor, which
are NorthPointe, The Reserve at Athens, The Reserve at Clemson,
Players Club, The Gables, College Station and University Towers. This
information excludes property information related to Tharpe
(discontinued operations) for all years.(3)
    
    Average of the month-end occupancy rates for the period.(4)
    
    Revenue per available bed is equal to the total revenue divided by the
sum of the design beds (including staff and model beds) at the
property each month. Revenue and design beds for any acquired
properties are included prospectively from acquisition date.  37




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##### Table of Contents



Item 7. Managements Discussion and Analysis of Financial Condition and Results of
Operations.
   
    
    Overview
 
    
    Our Business Segments
 
    
    Trends and Outlook
 
    
    Critical Accounting Policies
 
    
    Results of Operations
 
    
    Liquidity and Capital Resources
 
    
    Distributions
 
    
    Off-Balance Sheet Arrangements
 
    
    Funds From Operations
 
    
    Inflation
 
    
    Recent Accounting Pronouncements
 Financial Statements and Supplementary Data,
  Overview
    Our Business Segments
  Student housing leasing
    38




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##### Table of Contents



Management services
  Development consulting services
    39




---



##### Table of Contents



Trends and Outlook
 Rents and occupancy
  
 Student housing operating costs
  General and administrative costs
   40




---



##### Table of Contents



Termination of Place Lease
  Critical Accounting Policies
  Student housing leasing revenue recognition
   Student housing food service revenue recognition
   41




---



##### Table of Contents



Other leasing revenue recognition
  Revenue and cost recognition of development consulting services
   Student housing property acquisitions and dispositions
  Business Combinations
 Accounting for the Impairment and Disposal of Long Lived Assets
  42




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##### Table of Contents



Repairs and maintenance
  Long lived assets  impairment
  Use of Estimates
   Results of Operations for the Years Ended December 31, 2008 and 2007
 Year Ended December 31, 2008
    
    
    Year Ended December 31, 2007Student
    
    
    Development
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Student
    
    
    DevelopmentHousing
    
    
    Consulting
    
    
    Management
    
    
    
    
    
    
    
    
    
    
    Housing
    
    
    Consulting
    
    
    ManagementLeasing
    
    
    Services
    
    
    Services
    
    
    Adjustments
    
    
    Total
    
    
    Leasing
    
    
    Services
    
    
    Services
    
    
    Adjustments
    
    
    TotalRevenues:Student housing
leasing revenue
    
    $
    107,566
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    107,566
    
    
    $
    85,651
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    85,651Student housing
food service
revenue
    
    
    2,378
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,378
    
    
    
    2,359
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,359Other leasing
revenue
    
    
    7,145
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,145
    
    
    
    13,811
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,811Third-party
development
consulting
services
    
    
    
    
    
    
    8,303
    
    
    
    
    
    
    
    
    
    
    
    8,303
    
    
    
    
    
    
    
    5,411
    
    
    
    
    
    
    
    
    
    
    
    5,411Third-party
management
services
    
    
    
    
    
    
    
    
    
    
    3,672
    
    
    
    
    
    
    
    3,672
    
    
    
    
    
    
    
    
    
    
    
    3,391
    
    
    
    
    
    
    
    3,391Intersegment
revenues
    
    
    
    
    
    
    661
    
    
    
    4,306
    
    
    
    (4,967
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,428
    
    
    
    (3,428
    )
    
    
    Operating expense
reimbursements
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,796
    
    
    
    10,796
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,330
    
    
    
    9,330Total revenues
    
    
    117,089
    
    
    
    8,964
    
    
    
    7,978
    
    
    
    5,829
    
    
    
    139,860
    
    
    
    101,821
    
    
    
    5,411
    
    
    
    6,819
    
    
    
    5,902
    
    
    
    119,953
  43




---



##### Table of Contents



Year Ended December 31, 2008
    
    
    Year Ended December 31, 2007Student
    
    
    Development
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Student
    
    
    DevelopmentHousing
    
    
    Consulting
    
    
    Management
    
    
    
    
    
    
    
    
    
    
    Housing
    
    
    Consulting
    
    
    ManagementLeasing
    
    
    Services
    
    
    Services
    
    
    Adjustments
    
    
    Total
    
    
    Leasing
    
    
    Services
    
    
    Services
    
    
    Adjustments
    
    
    TotalOperating expenses:Student housing
leasing operations
    
    
    55,569
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    55,569
    
    
    
    41,215
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    41,215Student housing
food service
operations
    
    
    2,257
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,257
    
    
    
    2,236
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,236General and
administrative
    
    
    3
    
    
    
    4,196
    
    
    
    7,234
    
    
    
    (337
    )
    
    
    11,096
    
    
    
    105
    
    
    
    2,787
    
    
    
    6,628
    
    
    
    
    
    
    
    9,520Intersegment
expenses
    
    
    4,306
    
    
    
    
    
    
    
    
    
    
    
    (4,306
    )
    
    
    
    
    
    
    3,428
    
    
    
    
    
    
    
    
    
    
    
    (3,428
    )
    
    
    Reimbursable
operating expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,796
    
    
    
    10,796
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,330
    
    
    
    9,330Total operating
expenses
    
    
    62,135
    
    
    
    4,196
    
    
    
    7,234
    
    
    
    6,153
    
    
    
    79,718
    
    
    
    46,984
    
    
    
    2,787
    
    
    
    6,628
    
    
    
    5,902
    
    
    
    62,301Net operating
income (loss)
    
    
    54,954
    
    
    
    4,768
    
    
    
    744
    
    
    
    (324
    )
    
    
    60,142
    
    
    
    54,837
    
    
    
    2,624
    
    
    
    191
    
    
    
    
    
    
    
    57,652Nonoperating
expenses(1)
    
    
    60,213
    
    
    
    (76
    )
    
    
    
    
    
    
    
    
    
    
    60,137
    
    
    
    58,111
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    58,111Income
(loss) before
equity in earnings
of unconsolidated
entities, income
taxes, minority
interest and
discontinued
operations
    
    
    (5,259
    )
    
    
    4,844
    
    
    
    744
    
    
    
    (324
    )
    
    
    5
    
    
    
    (3,274
    )
    
    
    2,624
    
    
    
    191
    
    
    
    
    
    
    
    (459
    )Equity in earnings
of unconsolidated
entities
    
    
    (192
    )
    
    
    (4
    )
    
    
    
    
    
    
    
    
    
    
    (196
    )
    
    
    (510
    )
    
    
    233
    
    
    
    
    
    
    
    
    
    
    
    (277
    )Income
(loss) before
taxes, minority
interest and
discontinued
operations(2)
    
    $
    (5,451
    )
    
    $
    4,840
    
    
    $
    744
    
    
    $
    (324
    )
    
    $
    (191
    )
    
    $
    (3,784
    )
    
    $
    2,857
    
    
    $
    191
    
    
    $
    
    
    
    $
    (736
    )
 (1)
    
    Nonoperating expenses include interest expense, interest income, exit fees on early payment of debt,
amortization of deferred financing costs, depreciation, amortization of intangibles and impairment
losses.(2)
    
    The following is a reconciliation of the reportable segments net income (loss) before income taxes,
minority interest and discontinued operations to EDRs consolidated net income (loss) before income
taxes, minority interest and discontinued operations: 2008
    
    
    2007Net loss before taxes, minority interest and discontinued operations for reportable segments
    
    $
    (191
    )
    
    $
    (736
    )Other unallocated corporate expenses
    
    
    (6,761
    )
    
    
    (6,828
    )Net loss before income taxes, minority interest and discontinued operations
    
    $
    (6,952
    )
    
    $
    (7,564
    )
 Student housing leasing
  Year Ended
    
    
    Year EndedDecember 31,
    
    
    December 31,2008
    
    
    2007 (9)
    
    
    DifferenceOccupancyPhysical (1)
    
    
    90.3
    %
    
    
    93.5
    %
    
    
    (3.2
    )%Economic (2)
    
    
    87.1
    %
    
    
    90.9
    %
    
    
    (3.8
    )%NarPAB (3)
    
    $
    349
    
    
    $
    360
    
    
    $
    (11
    )Other income per avail. bed (4)
    
    $
    22
    
    
    $
    24
    
    
    $
    (2
    )RevPAB (5)
    
    $
    371
    
    
    $
    384
    
    
    $
    (13
    )Operating expense per bed (6) (7)
    
    $
    190
    
    
    $
    185
    
    
    $
    5Operating margin
    
    
    48.8
    %
    
    
    51.9
    %
    
    
    (3.1
    )%Design Beds (8)
    
    
    290,312
    
    
    
    222,852
    
    
    
    67,460
 (1)
    
    Physical occupancy represents a weighted average of the month-end occupancies for the respective period.(2)
    
    Economic occupancy represents the effective occupancy calculated by taking net apartment rent accounted
for on a GAAP basis for the respective period divided by market rent for the respective period.  44




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##### Table of Contents



(3)
    
    NarPAB represents GAAP net apartment rent for the respective period divided by the sum of the design
beds in the portfolio for each of the included months. Does not include food service revenue or other
leasing revenue.(4)
    
    Represents other GAAP-based income for the respective period divided by the sum of the design beds in
the portfolio for each of the included months. Other income includes service/app fees, late fees,
termination fees, parking fees, transfer fees, damage recovery, utility recovery, and other misc.(5)
    
    Represents total revenue (net apartment rent plus other income) for the respective period divided by
the sum of the design beds in the portfolio for each of the included months.(6)
    
    Represents property-level operating expense excluding management fees, depreciation and amortization divided by the sum of the design beds for each of the
included months.(7)
    
    For the year ended December 31, 2008, approximately $2 per bed related to the loss on the sale of land and the parking garage at University Towers (see
Note 5 in the consolidated financial statements) is excluded.(8)
    
    Represents the sum of the monthly design beds in the portfolio during the period. As of February 1, 2008, the design beds related to the Place Portfolio
were included in the total for year ended December 31, 2008 due to the termination of the lease with Place.(9)
    
    This information excludes property information related to Tharpe (discontinued operations).   Year Ended
    
    
    Year EndedDecember 31,
    
    
    December 31,2008
    
    
    2007 (9)
    
    
    DifferenceOccupancyPhysical (1)
    
    
    92.2
    %
    
    
    93.4
    %
    
    
    (1.2
    )%Economic (2)
    
    
    89.2
    %
    
    
    90.9
    %
    
    
    (1.7
    )%NarPAB (3)
    
    $
    365
    
    
    $
    359
    
    
    $
    6Other income per avail. bed (4)
    
    $
    25
    
    
    $
    25
    
    
    $
    RevPAB (5)
    
    $
    390
    
    
    $
    384
    
    
    $
    6Operating expense per bed (6) (7)
    
    $
    192
    
    
    $
    185
    
    
    $
    7Operating margin
    
    
    50.8
    %
    
    
    51.9
    %
    
    
    (1.1
    )%Design Beds (8)
    
    
    222,838
    
    
    
    222,852
    
    
    
    (14
    )
 (1)
    
    Physical occupancy represents a weighted average of the month-end occupancies for the respective period.(2)
    
    Economic occupancy represents the effective occupancy calculated by taking net apartment rent accounted
for on a GAAP basis for the respective period divided by market rent for the respective period.(3)
    
    NarPAB represents GAAP net apartment rent for the respective period divided by the sum of the design
beds in the portfolio for each of the included months. Does not include food service revenue or other
leasing revenue.(4)
    
    Represents other GAAP-based income for the respective period divided by the sum of the design beds in
the portfolio for each of the included months. Other income includes service/app fees, late fees,
termination fees, parking fees, transfer fees, damage recovery, utility recovery, and other misc.  45




---



##### Table of Contents



(5)
    
    Represents total revenue (net apartment rent plus other income) for the respective period
divided by the sum of the design beds in the portfolio for each of the included months.(6)
    
    Represents property-level operating expense excluding management fees, depreciation and
amortization divided by the sum of the design beds for each of the included months.(7)
    
    For the year ended December 31, 2008, approximately $2 per bed related to the loss on the sale
of land and the parking garage at University Towers (see Note 5 in the consolidated financial
statements) is excluded.(8)
    
    Represents the sum of the monthly design beds in the portfolio during the period. As of
February 1, 2008, the design beds related to the Place Portfolio were included in the total for
year ended December 31, 2008 due to the termination of the lease with Place.(9)
    
    This information excludes property information related to Tharpe (discontinued operations).      46




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##### Table of Contents



Development consulting services
  Recognized EarningsProject
    
    Beds
    
    
    Fee Type
    
    2008
    
    
    2007
    
    
    DifferenceSlippery Rock University  Phase I
    
    
    1,390
    
    
    Development fee
    
    $
    
    
    
    $
    46
    
    
    $
    (46
    )Indiana University of Pennsylvania  Phase I
    
    
    734
    
    
    Development fee
    
    
    
    
    
    
    1,597
    
    
    
    (1,597
    )University of Michigan
    
    
    895
    
    
    Development fee
    
    
    314
    
    
    
    285
    
    
    
    29University of North Carolina  Greensboro
    
    
    600
    
    
    Construction oversight fee
    
    
    
    
    
    
    50
    
    
    
    (50
    )University of Alabama  Tuscaloosa
    
    
    631
    
    
    Development fee
    
    
    670
    
    
    
    978
    
    
    
    (308
    )Slippery Rock University  Phase II
    
    
    746
    
    
    Development fee
    
    
    1,019
    
    
    
    1,067
    
    
    
    (48
    )Indiana University of Pennsylvania  Phase II
    
    
    1,102
    
    
    Development fee
    
    
    2,341
    
    
    
    1,378
    
    
    
    963Fontainebleu Renovation Project
    
    
    435
    
    
    Development fee
    
    
    171
    
    
    
    10
    
    
    
    161West Chester  Phase I
    
    
    1,197
    
    
    Development fee
    
    
    2,033
    
    
    
    
    
    
    
    2,033Indiana University of Pennsylvania  Phase III
    
    
    1,084
    
    
    Development fee
    
    
    1,339
    
    
    
    
    
    
    
    1,339Colorado State University  Pueblo
    
    
    253
    
    
    Development fee
    
    
    234
    
    
    
    
    
    
    
    234Auraria Higher Education System
    
    
    685
    
    
    Development fee
    
    
    182
    
    
    
    
    
    
    
    182Southern Illinois University  Carbondale
    
    
    528
    
    
    Construction oversight fee
    
    
    199
    
    
    
    
    
    
    
    199Syracuse University
    
    
    432
    
    
    Development fee
    
    
    462
    
    
    
    
    
    
    
    462Development consulting services
    
    
    
    
    
    
    
    $
    8,964
    
    
    $
    5,411
    
    
    $
    3,553California University of Pennsylvania  Phase
V
    
    
    354
    
    
    Development fee
    
    $
    
    
    
    $
    124
    
    
    $
    (124
    )University of North Carolina  Greensboro
    
    
    600
    
    
    Development fee
    
    
    
    
    
    
    118
    
    
    
    (118
    )University of Louisville  Phase III
    
    
    359
    
    
    Development fee
    
    
    
    
    
    
    (9
    )
    
    
    9Other
    
    
    
    
    
    
    
    
    (4
    )
    
    
    
    
    
    
    (4
    )Equity in earnings of unconsolidated
entities
    
    
    
    
    
    
    
    $
    (4
    )
    
    $
    233
    
    
    $
    (237
    )
   47




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##### Table of Contents



Management services
    Unallocated corporate expenses
   48




---



##### Table of Contents



Results of Operations for the Years Ended December 31, 2007 and 2006
 Year Ended December 31, 2007
    
    
    Year Ended December 31, 2006Student
    
    
    Development
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Student
    
    
    DevelopmentHousing
    
    
    Consulting
    
    
    Management
    
    
    
    
    
    
    
    
    
    
    Housing
    
    
    Consulting
    
    
    ManagementLeasing
    
    
    Services
    
    
    Services
    
    
    Adjustments
    
    
    Total
    
    
    Leasing
    
    
    Services
    
    
    Services
    
    
    Adjustments
    
    
    TotalRevenues:Student housing
leasing revenue
    
    $
    85,651
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    85,651
    
    
    $
    81,202
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    81,202Student housing
food service
revenue
    
    
    2,359
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,359
    
    
    
    3,634
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,634Other leasing
revenue
    
    
    13,811
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,811
    
    
    
    14,012
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,012Third-party
development
consulting
services
    
    
    
    
    
    
    5,411
    
    
    
    
    
    
    
    
    
    
    
    5,411
    
    
    
    
    
    
    
    3,773
    
    
    
    
    
    
    
    
    
    
    
    3,773Third-party
management
services
    
    
    
    
    
    
    
    
    
    
    3,391
    
    
    
    
    
    
    
    3,391
    
    
    
    
    
    
    
    
    
    
    
    2,796
    
    
    
    
    
    
    
    2,796Intersegment
revenues
    
    
    
    
    
    
    
    
    
    
    3,428
    
    
    
    (3,428
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,298
    
    
    
    (3,298
    )
    
    
    Operating expense
reimbursements
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,330
    
    
    
    9,330
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,638
    
    
    
    7,638Total revenues
    
    
    101,821
    
    
    
    5,411
    
    
    
    6,819
    
    
    
    5,902
    
    
    
    119,953
    
    
    
    98,848
    
    
    
    3,773
    
    
    
    6,094
    
    
    
    4,340
    
    
    
    113,055Operating expenses:Student housing
leasing operations
    
    
    41,215
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    41,215
    
    
    
    39,503
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    39,503Student housing
food service
operations
    
    
    2,236
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,236
    
    
    
    3,318
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,318General and
administrative
    
    
    105
    
    
    
    2,787
    
    
    
    6,628
    
    
    
    
    
    
    
    9,520
    
    
    
    21
    
    
    
    2,210
    
    
    
    5,004
    
    
    
    
    
    
    
    7,235Intersegment
expenses
    
    
    3,428
    
    
    
    
    
    
    
    
    
    
    
    (3,428
    )
    
    
    
    
    
    
    3,298
    
    
    
    
    
    
    
    
    
    
    
    (3,298
    )
    
    
    Reimbursable
operating expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,330
    
    
    
    9,330
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,638
    
    
    
    7,638Total operating
expenses
    
    
    46,984
    
    
    
    2,787
    
    
    
    6,628
    
    
    
    5,902
    
    
    
    62,301
    
    
    
    46,140
    
    
    
    2,210
    
    
    
    5,004
    
    
    
    4,340
    
    
    
    57,694Net operating
income (loss)
    
    
    54,837
    
    
    
    2,624
    
    
    
    191
    
    
    
    
    
    
    
    57,652
    
    
    
    52,708
    
    
    
    1,563
    
    
    
    1,090
    
    
    
    
    
    
    
    55,361Nonoperating
expenses(1)
    
    
    58,111
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    58,111
    
    
    
    62,660
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    62,660Income (loss)
before equity in
earnings of
unconsolidated
entities, income
taxes, minority
interest and
discontinued
operations
    
    
    (3,274
    )
    
    
    2,624
    
    
    
    191
    
    
    
    
    
    
    
    (459
    )
    
    
    (9,952
    )
    
    
    1,563
    
    
    
    1,090
    
    
    
    
    
    
    
    (7,299
    )Equity in earnings
of unconsolidated
entities
    
    
    (510
    )
    
    
    233
    
    
    
    
    
    
    
    
    
    
    
    (277
    )
    
    
    (74
    )
    
    
    814
    
    
    
    
    
    
    
    
    
    
    
    740Income (loss)
before taxes,
minority interest
and discontinued
operations(2)
    
    $
    (3,784
    )
    
    $
    2,857
    
    
    $
    191
    
    
    $
    
    
    
    $
    (736
    )
    
    $
    (10,026
    )
    
    $
    2,377
    
    
    $
    1,090
    
    
    $
    
    
    
    $
    (6,559
    )
 (1)
    
    Nonoperating expenses include interest expense, interest income, exit fees on early payment of
debt, amortization of deferred financing costs, depreciation, and amortization of intangibles.  49




---



##### Table of Contents



(2)
    
    The following is a reconciliation of the reportable segments net income (loss) before income
taxes, minority interest and discontinued operations to EDRs consolidated net income (loss) before
income taxes, minority interest and discontinued operations: 2007
    
    
    2006Net loss before taxes, minority interest and discontinued operations for reportable segments
    
    $
    (736
    )
    
    $
    (6,559
    )Other unallocated corporate expenses
    
    
    (6,828
    )
    
    
    (6,404
    )Net loss before income taxes, minority interest and discontinued operations
    
    $
    (7,564
    )
    
    $
    (12,963
    )
 Student housing leasing
  Year Ended
    
    
    Year EndedDecember 31,
    
    
    December 31,2007
    
    
    2006
    
    
    DifferenceOccupancyPhysical (1)
    
    
    93.5
    %
    
    
    93.1
    %
    
    
    0.4
    %Economic (2)
    
    
    90.9
    %
    
    
    91.1
    %
    
    
    (0.2
    )%NarPAB (3)
    
    $
    360
    
    
    $
    346
    
    
    $
    14Other income per avail. bed (4)
    
    $
    24
    
    
    $
    24
    
    
    $
    RevPAB (5)
    
    $
    384
    
    
    $
    370
    
    
    $
    14Operating expense per bed (6)
    
    $
    185
    
    
    $
    180
    
    
    $
    5Operating margin
    
    
    51.9
    %
    
    
    51.4
    %
    
    
    0.5
    %Design Beds (7)
    
    
    222,852
    
    
    
    219,732
    
    
    
    3,120
 (1)
    
    Physical occupancy represents a weighted average of the month-end occupancies for the
respective period.(2)
    
    Economic occupancy represents the effective occupancy calculated by taking net apartment rent
accounted for on a GAAP basis for the respective period divided by market rent for the respective
period.(3)
    
    NarPAB represents GAAP net apartment rent for the respective period divided by the sum of the
design beds in the portfolio for each of the included months. Does not include food service
revenue or other leasing revenue.(4)
    
    Represents other GAAP-based income for the respective period divided by the sum of the design
beds in the portfolio for each of the included months. Other income includes service/app fees,
late fees, termination fees, parking fees, transfer fees, damage recovery, utility recovery, and
other misc.(5)
    
    Represents total revenue (net apartment rent plus other income) for the respective period
divided by the sum of the design beds in the portfolio for each of the included months.(6)
    
    Represents property-level operating expense excluding management fees, depreciation and
amortization divided by the sum of the design beds for each of the included months.(7)
    
    Represents the sum of the monthly design beds in the portfolio during the period, excluding
Place properties.   50




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##### Table of Contents



Development consulting services
    Management services
   51




---



##### Table of Contents



Nonoperating expenses
  Unallocated corporate expenses
   52




---



##### Table of Contents



Liquidity and Capital Resources
 Revolving credit facility and other indebtedness
         53




---



##### Table of Contents



Liquidity outlook and capital requirements
       54




---



##### Table of Contents



Predevelopment expenditures
   Long-term liquidity requirements
  Capital expenditures
  As of and for the Years EndedDecember 31,2008
    
    
    2007
    
    
    2006Total units
    
    
    7,466
    
    
    
    6,400
    
    
    
    6,400Total beds
    
    
    24,463
    
    
    
    20,125
    
    
    
    20,125Total recurring capital
expenditures
    
    $
    3,815
    
    
    $
    2,487
    
    
    $
    2,222Average per unit
    
    $
    510.98
    
    
    $
    388.56
    
    
    $
    347.25Average per bed
    
    $
    155.95
    
    
    $
    123.57
    
    
    $
    110.43
   55




---



##### Table of Contents



Commitments
  Less than
    
    
    1-3
    
    
    3-5
    
    
    More than 51 Year
    
    
    Years
    
    
    Years
    
    
    Years
    
    
    TotalContractual Obligations:Long-Term Debt Obligations(1)
    
    $
    101,631
    
    
    $
    40,113
    
    
    $
    110,905
    
    
    $
    221,307
    
    
    $
    473,956Contractual Fixed Interest
Obligations(2)
    
    
    25,105
    
    
    
    37,658
    
    
    
    28,694
    
    
    
    25,312
    
    
    
    116,769Operating Lease and Future
Purchase Obligations(3)
    
    
    4,600
    
    
    
    7,207
    
    
    
    6,059
    
    
    
    952
    
    
    
    18,818Capital Reserve Obligations(4)
    
    
    1,584
    
    
    
    2,736
    
    
    
    2,560
    
    
    
    2,582
    
    
    
    9,462Total
    
    $
    132,920
    
    
    $
    87,714
    
    
    $
    148,218
    
    
    $
    250,153
    
    
    $
    619,005
 (1)
    
    Includes required monthly principal amortization and amounts due at maturity on first mortgage
debt secured by student housing properties and amounts due under Amended Revolver and Term Loan
agreements. The first mortgage debt does not include $1,203 of unamortized debt premium.(2)
    
    Includes contractual fixed-rate interest payments.(3)
    
    Includes future minimum lease commitments under operating lease obligations and future purchase
obligations for advertising.(4)
    
    Includes future annual contributions to the capital reserve as required by certain mortgage
debt. Long-term indebtedness
   Year2009
    
    $
    101,6312010
    
    
    36,3482011
    
    
    3,7652012
    
    
    78,4172013
    
    
    32,488Thereafter
    
    
    221,307Total
    
    
    473,956Debt premium
    
    
    1,203Outstanding as of December 31, 2008, net of debt premium
    
    $
    475,159
     56




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##### Table of Contents



Distributions
    Off-Balance Sheet Arrangements
   Funds From Operations (FFO)
    57




---



##### Table of Contents



Year Ended December 31,2008
    
    
    2007
    
    
    2006Net loss
    
    $
    (7,947
    )
    
    $
    (5,416
    )
    
    $
    (12,245
    )Gain on sale of student housing property, net of minority interest
    
    
    
    
    
    
    (1,579
    )
    
    
    Loss on sale of student housing assets
    
    
    512
    
    
    
    
    
    
    
    Student housing property depreciation and amortization of lease
intangibles
    
    
    28,819
    
    
    
    31,780
    
    
    
    33,680Equity portion of real estate depreciation and amortization on
equity investees
    
    
    496
    
    
    
    424
    
    
    
    54Depreciation and amortization of discontinued operations
    
    
    
    
    
    
    711
    
    
    
    2,048Minority interest benefit
    
    
    (128
    )
    
    
    (6
    )
    
    
    (355
    )Funds from operations available to all share and unit holders
    
    $
    21,752
    
    
    $
    25,914
    
    
    $
    23,182
 Inflation
  Recent Accounting Pronouncements
    58




---



##### Table of Contents



Accounting for Derivative Instruments and Hedging
Activities
 Goodwill and Other Intangible Assets.
 Earnings Per Share.
  59




---



##### Table of Contents



Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
        60




---



##### Table of Contents



Item 8. Financial Statements and Supplementary Data.
 Managements Report on Internal Control Over Financial Reporting
 Internal Control  Integrated Framework
    61




---



##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 Internal Control  Integrated
Framework
    Internal Control  Integrated Framework .
 /s/ DELOITTE & TOUCHE LLP
 
  62




---



##### Table of Contents



CONSOLIDATED BALANCE SHEETS
As of December 31,
 2008
    
    
    2007(Amounts in thousands, except shareand per share data)ASSETSAssets:Student housing properties, net
    
    $
    733,507
    
    
    $
    732,979Assets under development
    
    
    6,572
    
    
    
    5,675Corporate office furniture, net
    
    
    1,465
    
    
    
    1,693Cash and cash equivalents
    
    
    9,003
    
    
    
    4,034Restricted cash
    
    
    5,595
    
    
    
    8,188Student contracts receivable, net
    
    
    533
    
    
    
    329Receivable from affiliate
    
    
    25
    
    
    
    18Receivable from managed third parties
    
    
    401
    
    
    
    606Goodwill and other intangibles, net
    
    
    3,111
    
    
    
    3,531Other assets
    
    
    17,435
    
    
    
    10,407Total assets
    
    $
    777,647
    
    
    $
    767,460LIABILITIES AND STOCKHOLDERS EQUITYLiabilities:Mortgage and construction loans, net of unamortized premium/discount
    
    $
    442,259
    
    
    $
    420,940Revolving line of credit
    
    
    32,900
    
    
    
    11,500Accounts payable
    
    
    303
    
    
    
    1,397Accrued expenses
    
    
    10,302
    
    
    
    9,695Accounts payable affiliate
    
    
    
    
    
    
    60Deferred revenue
    
    
    9,954
    
    
    
    7,928Total liabilities
    
    
    495,718
    
    
    
    451,520Minority interest
    
    
    14,669
    
    
    
    18,121Commitments and contingencies (see Note 16)
    
    
    
    
    
    
    Stockholders equity:Common stock, $.01 par value, 200,000,000 shares authorized,
28,475,855 and 28,431,855 shares issued and outstanding as of
December 31, 2008 and 2007, respectively
    
    
    285
    
    
    
    284Preferred shares, $0.01 par value, 50,000,000 shares authorized, no
shares issued and outstanding
    
    
    
    
    
    
    Additional paid-in capital
    
    
    308,356
    
    
    
    330,969Warrants
    
    
    
    
    
    
    Accumulated deficit
    
    
    (41,381
    )
    
    
    (33,434
    )Total stockholders equity
    
    
    267,260
    
    
    
    297,819Total liabilities and stockholders equity
    
    $
    777,647
    
    
    $
    767,460
   63




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##### Table of Contents



CONSOLIDATED STATEMENTS OF OPERATIONS
Years Ended December 31,
 2008
    
    
    2007
    
    
    2006(Amounts in thousands, except share and per share data)Revenues:Student housing leasing revenue
    
    $
    107,566
    
    
    $
    85,651
    
    
    $
    81,202Student housing food service revenue
    
    
    2,378
    
    
    
    2,359
    
    
    
    3,634Other leasing revenue
    
    
    7,145
    
    
    
    13,811
    
    
    
    14,012Third-party development services
    
    
    8,303
    
    
    
    5,411
    
    
    
    3,773Third-party management services
    
    
    3,672
    
    
    
    3,391
    
    
    
    2,796Operating expense reimbursements
    
    
    10,796
    
    
    
    9,330
    
    
    
    7,638Total revenues
    
    
    139,860
    
    
    
    119,953
    
    
    
    113,055Operating expenses:Student housing leasing operations
    
    
    55,569
    
    
    
    41,215
    
    
    
    39,503Student housing food service operations
    
    
    2,257
    
    
    
    2,236
    
    
    
    3,318General and administrative
    
    
    16,348
    
    
    
    14,561
    
    
    
    12,331Depreciation and amortization
    
    
    29,417
    
    
    
    32,223
    
    
    
    34,035Loss on impairment of student housing property
    
    
    1,633
    
    
    
    
    
    
    
    Loss on impairment of goodwill
    
    
    388
    
    
    
    
    
    
    
    Reimbursable operating expenses
    
    
    10,796
    
    
    
    9,330
    
    
    
    7,638Total operating expenses
    
    
    116,408
    
    
    
    99,565
    
    
    
    96,825Operating income
    
    
    23,452
    
    
    
    20,388
    
    
    
    16,230Nonoperating expenses:Interest expense
    
    
    25,229
    
    
    
    26,957
    
    
    
    29,353Amortization of deferred financing costs
    
    
    992
    
    
    
    1,036
    
    
    
    1,114Loss on extinguishment of debt
    
    
    4,360
    
    
    
    174
    
    
    
    Interest income
    
    
    (373
    )
    
    
    (492
    )
    
    
    (534
    )Total nonoperating expenses
    
    
    30,208
    
    
    
    27,675
    
    
    
    29,933Loss before equity in earnings of
unconsolidated entities, income taxes,
minority interest and discontinued operations
    
    
    (6,756
    )
    
    
    (7,287
    )
    
    
    (13,703
    )Equity in earnings of unconsolidated entities
    
    
    (196
    )
    
    
    (277
    )
    
    
    740Loss before income taxes, minority interest
and discontinued operations
    
    
    (6,952
    )
    
    
    (7,564
    )
    
    
    (12,963
    )Taxes
    
    
    1,123
    
    
    
    258
    
    
    
    659Loss before minority interest and
discontinued operations
    
    
    (8,075
    )
    
    
    (7,822
    )
    
    
    (13,622
    )Minority interest
    
    
    (128
    )
    
    
    (39
    )
    
    
    (404
    )Loss from continuing operations
    
    
    (7,947
    )
    
    
    (7,783
    )
    
    
    (13,218
    )Discontinued operations:Income from discontinued operations, net
of minority interest of $34 and $49,
respectively
    
    
    
    
    
    
    788
    
    
    
    973Gain on sale of student housing property,
net of minority interest of $65
    
    
    
    
    
    
    1,579
    
    
    
    Income from discontinued operations
    
    
    
    
    
    
    2,367
    
    
    
    973Net loss
    
    $
    (7,947
    )
    
    $
    (5,416
    )
    
    $
    (12,245
    )Earnings per share information:Income (loss) per share  basic and diluted:Continuing operations
    
    
    (0.28
    )
    
    
    (0.28
    )
    
    
    (0.50
    )Discontinued operations
    
    
    
    
    
    
    0.08
    
    
    
    0.04Net loss per share
    
    $
    (0.28
    )
    
    $
    (0.20
    )
    
    $
    (0.46
    )Weighted average common shares outstanding 
basic and diluted
    
    
    28,455,713
    
    
    
    28,010,144
    
    
    
    26,387,547Distributions per common share
    
    $
    0.82
    
    
    $
    0.82
    
    
    $
    1.10
   64




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##### Table of Contents



CONSOLIDATED STATEMENTS OF CHANGES IN
STOCKHOLDERS EQUITY
 Additional
    
    
    Unearned
    
    
    
    
    
    
    Loan toCommon Stock
    
    
    Paid-In
    
    
    Deferred
    
    
    
    
    
    
    Unit
    
    
    AccumulatedShares
    
    
    Amount
    
    
    Capital
    
    
    Compensation
    
    
    Warrants
    
    
    Holder
    
    
    Deficit
    
    
    TotalBalance, December 31, 2005
    
    
    26,263,889
    
    
    $
    263
    
    
    $
    354,134
    
    
    $
    (2,470
    )
    
    $
    375
    
    
    $
    (5,996
    )
    
    $
    (15,773
    )
    
    $
    330,533Reclassification of unearned
compensation upon adoption of
SFAS 123R
    
    
    
    
    
    
    
    
    
    
    (2,470
    )
    
    
    2,470
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Common stock issued to
officers and directors
    
    
    6,000
    
    
    
    
    
    
    
    88
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    88Amortization of restricted stock
    
    
    36,000
    
    
    
    
    
    
    
    604
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    604Operating unit conversion to
common stock
    
    
    99,056
    
    
    
    1
    
    
    
    1,389
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,390Redemption of minority interest
to satisfy loan to unitholder
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,996
    
    
    
    
    
    
    
    5,996Net proceeds from issuance of
common shares  direct stock
purchase plan and dividend
reinvestment plan
    
    
    405,607
    
    
    
    4
    
    
    
    5,743
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,747Cash dividends
    
    
    
    
    
    
    
    
    
    
    (29,114
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (29,114
    )Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12,245
    )
    
    
    (12,245
    )Balance, December 31, 2006
    
    
    26,810,552
    
    
    
    268
    
    
    
    330,374
    
    
    
    
    
    
    
    375
    
    
    
    
    
    
    
    (28,018
    )
    
    
    302,999Common stock issued to officers
and directors
    
    
    8,000
    
    
    
    
    
    
    
    113
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    113Amortization of restricted stock
    
    
    36,000
    
    
    
    
    
    
    
    604
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    604Net proceeds from issuance of
common shares  direct stock
purchase plan and dividend
reinvestment plan
    
    
    1,577,303
    
    
    
    16
    
    
    
    22,476
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    22,492Cash dividends
    
    
    
    
    
    
    
    
    
    
    (22,985
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (22,985
    )Expiration of Warrants
    
    
    
    
    
    
    
    
    
    
    375
    
    
    
    
    
    
    
    (375
    )
    
    
    
    
    
    
    
    
    
    
    PIU Repurchase
    
    
    
    
    
    
    
    
    
    
    12
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,416
    )
    
    
    (5,416
    )Balance, December 31, 2007
    
    
    28,431,855
    
    
    
    284
    
    
    
    330,969
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (33,434
    )
    
    
    297,819Common stock issued to officers
and directors
    
    
    8,000
    
    
    
    
    
    
    
    101
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    101Amortization of restricted stock
    
    
    36,000
    
    
    
    1
    
    
    
    604
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    605Cash dividends
    
    
    
    
    
    
    
    
    
    
    (23,379
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (23,379
    )PIU Repurchase
    
    
    
    
    
    
    
    
    
    
    61
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    61Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,947
    )
    
    
    (7,947
    )Balance, December 31, 2008
    
    
    28,475,855
    
    
    $
    285
    
    
    $
    308,356
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    (41,381
    )
    
    $
    267,260
   65




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##### Table of Contents



CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended December 31,
 2008
    
    
    2007
    
    
    2006Operating activities:Net loss
    
    $
    (7,947
    )
    
    $
    (5,416
    )
    
    $
    (12,245
    )Adjustments to reconcile net loss to net cash
provided by operating activities:Depreciation and amortization
    
    
    29,417
    
    
    
    32,223
    
    
    
    34,035Depreciation included in discontinued operations
    
    
    
    
    
    
    711
    
    
    
    2,048Deferred tax expense (benefit)
    
    
    59
    
    
    
    (178
    )
    
    
    48Loss on disposal of assets
    
    
    532
    
    
    
    38
    
    
    
    11Gain on sale of student housing property
    
    
    
    
    
    
    (1,644
    )
    
    
    Loss on impairment of student housing property
    
    
    1,633
    
    
    
    
    
    
    
    Loss on impairment of goodwill
    
    
    388
    
    
    
    
    
    
    
    Loss on extinguishment of debt
    
    
    4,360
    
    
    
    138
    
    
    
    Amortization of deferred financing costs
    
    
    992
    
    
    
    1,036
    
    
    
    1,114Loss on interest rate cap
    
    
    38
    
    
    
    
    
    
    
    Amortization of unamortized debt
premiums/discounts
    
    
    (470
    )
    
    
    (583
    )
    
    
    (559
    )Distributions of earnings from unconsolidated
entities
    
    
    277
    
    
    
    364
    
    
    
    787Noncash compensation expense related to PIUs
and restricted stock
    
    
    761
    
    
    
    772
    
    
    
    796Equity in earnings of unconsolidated entities
    
    
    196
    
    
    
    277
    
    
    
    (740
    )Minority interest in continuing operations
    
    
    (128
    )
    
    
    (39
    )
    
    
    (404
    )Minority interest in discontinued operations
    
    
    
    
    
    
    99
    
    
    
    49Change in operating assets and liabilities (net
of acquisitions):Student contracts receivable
    
    
    (204
    )
    
    
    (291
    )
    
    
    259Management fees receivable
    
    
    205
    
    
    
    63
    
    
    
    (117
    )Other assets
    
    
    (5,678
    )
    
    
    (1,104
    )
    
    
    (1,272
    )Accounts payable and accrued expenses
    
    
    (446
    )
    
    
    509
    
    
    
    697Accounts payable affiliate
    
    
    (67
    )
    
    
    411
    
    
    
    (594
    )Deferred revenue
    
    
    2,093
    
    
    
    (580
    )
    
    
    1,274Net cash provided by operating activities
    
    
    26,011
    
    
    
    26,806
    
    
    
    25,187Investing activities:Property acquisitions, net of cash acquired
    
    
    
    
    
    
    
    
    
    
    (112,717
    )Purchase of corporate furniture and fixtures
    
    
    (317
    )
    
    
    (1,348
    )
    
    
    (86
    )Restricted cash
    
    
    2,593
    
    
    
    966
    
    
    
    (40
    )Insurance proceeds received from property damage
    
    
    613
    
    
    
    
    
    
    
    184Investment in student housing properties
    
    
    (13,986
    )
    
    
    (8,463
    )
    
    
    (4,858
    )Proceeds from sale of assets
    
    
    2,578
    
    
    
    
    
    
    
    Proceeds from sale of student housing properties
    
    
    
    
    
    
    48,942
    
    
    
    Loan to equity investee
    
    
    
    
    
    
    (845
    )
    
    
    Investment in assets under development
    
    
    (22,576
    )
    
    
    (5,675
    )
    
    
    Investments in joint ventures
    
    
    (561
    )
    
    
    (178
    )
    
    
    (3,313
    )Net cash provided by (used in) investing activities
    
    
    (31,656
    )
    
    
    33,399
    
    
    
    (120,830
    )Financing activities:Payment of mortgage notes
    
    
    (212,038
    )
    
    
    (60,158
    )
    
    
    (2,503
    )Borrowings under mortgage and construction loans
    
    
    233,827
    
    
    
    57,800
    
    
    
    Borrowings of long-term debt
    
    
    
    
    
    
    
    
    
    
    50,000Repayments of long-term debt
    
    
    
    
    
    
    (47,000
    )
    
    
    (3,000
    )Debt issuance costs
    
    
    (2,363
    )
    
    
    (551
    )
    
    
    (1,352
    )Debt extinguishment costs
    
    
    (4,295
    )
    
    
    
    
    
    
    Interest rate cap issuance cost
    
    
    (120
    )
    
    
    
    
    
    
    Borrowing (repayment) of line of credit, net
    
    
    21,400
    
    
    
    (10,900
    )
    
    
    22,400Proceeds (payments) from issuance of common
stock
    
    
    
    
    
    
    22,414
    
    
    
    5,994Payment of offering costs
    
    
    
    
    
    
    
    
    
    
    (248
    )Dividends and distributions paid
    
    
    (25,797
    )
    
    
    (24,203
    )
    
    
    (30,875
    )Redemption of minority interest
    
    
    
    
    
    
    
    
    
    
    (8
    )Net cash provided by (used in) financing activities
    
    
    10,614
    
    
    
    (62,598
    )
    
    
    40,408Net increase (decrease) in cash and cash equivalents
    
    
    4,969
    
    
    
    (2,393
    )
    
    
    (55,235
    )Cash and cash equivalents, beginning of period
    
    
    4,034
    
    
    
    6,427
    
    
    
    61,662Cash and cash equivalents, end of period
    
    $
    9,003
    
    
    $
    4,034
    
    
    $
    6,427Supplemental disclosure of cash flow information:Interest paid
    
    $
    26,828
    
    
    $
    27,520
    
    
    $
    29,180Income taxes paid
    
    $
    755
    
    
    $
    796
    
    
    $
    819Supplemental disclosure of noncash activities:Place acquisition costs paid in 2005
    
    $
    
    
    
    $
    
    
    
    
    4,718Redemption of minority interest from unitholder
    
    
    893
    
    
    
    
    
    
    
    6,116Warrants issued (expired)
    
    
    
    
    
    
    (375
    )
    
    
    Common stock issued under the dividend
reinvestment plan
    
    
    
    
    
    
    78
    
    
    
    Debt assumed in property acquisitions net of
premium
    
    
    
    
    
    
    
    
    
    
    98,660
   66




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##### Table of Contents



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
 1. Organization and description of business
    
    
    Allen & OHara Education Services, Inc. (AOES), a Delaware
corporation performing student housing management activities.
    
    Allen & OHara Development Company, LLC (AODC), a Delaware limited
liability company providing development consulting services for third
party student housing properties.
  2. Summary of significant accounting policies
 Basis of presentation and principles of consolidation
    Use of estimates
  Cash and cash equivalents
   67




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##### Table of Contents



Restricted cash
  Distributions
  Student housing properties
  Business
Combinations
 Accounting for
the Impairment and Disposal of Long-lived Assets.
  Deferred financing costs
   Offering costs
   68




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##### Table of Contents



Debt premiums/discounts
  Income taxes
  Accounting for Income Taxes,
 Accounting for Uncertainty in Income Taxes
 Earnings per share
 Earnings Per Share.
 2008
    
    
    2007Operating Partnership units
    
    
    913,738
    
    
    
    913,738University Towers Operating Partnership units
    
    
    207,257
    
    
    
    269,757Restricted Stock (unvested shares)
    
    
    39,111
    
    
    
    75,111Profits Interest Units
    
    
    275,000
    
    
    
    277,500Total potentially dilutive securities
    
    
    1,435,106
    
    
    
    1,536,106
  Repairs, maintenance, and major improvements
   69




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##### Table of Contents



Goodwill and other intangible assets
 Goodwill and
Other Intangible Assets.
 Investment in unconsolidated joint ventures and limited liability companies
  
    
    Salisbury Student Apartment Developers Joint Venture, 33% owned by AOES
    
    Salisbury Student Apartment Developers LLC, a Maryland limited liability company 33% owned by AOES
    
    University of Louisville Apartment Developers LLC, a Kentucky limited liability company 50% owned by AOES
    
    Hines/ AOES LLC, an Alabama limited liability company, 50% owned by AOES
    
    National Development/ Allen & OHara CUPA, LLC, a Pennsylvania limited liability company, 50% owned by
Allen & OHara Development Company, LLC (AODC)
    
    National Development/ Allen & OHara Lock Haven, LLC, a Pennsylvania limited liability company, 50%
owned by AODC
    
    National Development/ Allen & OHara Clarion, LLC, a Pennsylvania limited liability company, 50% owned
by AODC
    
    Allen & OHara National Development Bloomsburg LLC, a Pennsylvania limited liability company, 50% owned
by AODC
    
    Allen & OHara/ Academic Privatization LLC, a Tennessee limited liability company, 50% owned by AODC
    
    University Village-Greensboro LLC, a Delaware limited liability company, 25% owned by EROP
    
    AODC/CPA, LLC, a Delaware limited liability company, 50% owned by AODC
    
    WEDR Riverside Investors V, LLC, a Delaware limited liability company, 10% owned by EROP
    
    APF EDR, LP, a Delaware limited partnership, 10% owned by EROP
    
    APF EDR Food Services, LP, a Delaware limited partnership, 10% owned by EROP
    
    WEDR Stinson Investors V, LLC, a Delaware limited liability company, 10% owned by EROP
 Revenue recognition
   70




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##### Table of Contents



Student housing leasing revenue
  2008
    
    
    2007
    
    
    2006Balance, beginning of period
    
    $
    173
    
    
    $
    43
    
    
    $
    410Provision for uncollectible accounts
    
    
    1,327
    
    
    
    804
    
    
    
    775Deductions
    
    
    (1,359
    )
    
    
    (674
    )
    
    
    (1,142
    )Balance, end of period
    
    $
    141
    
    
    $
    173
    
    
    $
    43
 Student housing food service revenue
 Other leasing revenue
 Third-party development services revenue
 Third-party management services revenue
  71




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##### Table of Contents



Operating expense reimbursements Income Statement Characterization of Reimbursements Received for Out of Pocket
Expenses Incurred.
 Costs related to third party development consulting services
  Advertising expense
  Minority interests
  Segment information
 Disclosures about Segments of an Enterprise and Related
Information,
 Stock-based compensation
 Share-Based Payment
 Fair value of financial instruments
 Disclosure about the Fair Value of Financial Instruments,
 Recent accounting pronouncements
 Business Combinations
  72




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##### Table of Contents



Noncontrolling Interests in Consolidated Financial
Statementsan amendment of Accounting Research Bulletin No. 51
 Accounting for Derivative Instruments and Hedging
Activities
 Goodwill and Other Intangible Assets.
 Earnings Per Share.
 3. Income taxes
  2008
    
    
    2007Deferred tax assets:Depreciation and amortization
    
    $
    365
    
    
    $
    412Accrued expenses
    
    
    178
    
    
    
    182Straight line rent
    
    
    110
    
    
    
    136Total deferred tax assets
    
    
    653
    
    
    
    730Deferred tax liabilities:Deferred revenue
    
    
    (4
    )
    
    
    (19
    )Depreciation and amortization
    
    
    (12
    )
    
    
    Amortization of management contracts intangible
    
    
    (15
    )
    
    
    (30
    )Net deferred tax assets
    
    $
    622
    
    
    $
    681
  73




---



##### Table of Contents



2008
    
    
    2007
    
    
    2006Deferred:Federal
    
    $
    26
    
    
    $
    (127
    )
    
    $
    40State
    
    
    33
    
    
    
    (51
    )
    
    
    8Deferred expense (benefit)
    
    
    59
    
    
    
    (178
    )
    
    
    48Current:Federal
    
    
    802
    
    
    
    377
    
    
    
    498State
    
    
    262
    
    
    
    59
    
    
    
    113Current expense
    
    
    1,064
    
    
    
    436
    
    
    
    611Total provision
    
    $
    1,123
    
    
    $
    258
    
    
    $
    659
  2008
    
    
    2007
    
    
    2006Tax provision at U.S. statutory rates on TRS income subject to tax
    
    $
    883
    
    
    $
    226
    
    
    $
    546State income tax, net of federal benefit
    
    
    156
    
    
    
    29
    
    
    
    108Other
    
    
    84
    
    
    
    3
    
    
    
    5Tax provision
    
    $
    1,123
    
    
    $
    258
    
    
    $
    659
  74




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##### Table of Contents



4. Acquisition of real estate investments
  AllocationPlace PortfolioCurrent assets and restricted cash
    
    $
    2,376Student housing properties
    
    
    202,250Other
    
    
    570Total assets acquired
    
    
    205,196Current liabilities
    
    
    (855
    )Mortgage debt assumed net of premium/discount
    
    
    (98,660
    )Acquisition costs
    
    
    (7,446
    )Purchase price
    
    $
    98,235
  AllocationStatesboroCurrent assets and restricted cash
    
    $
    77Student housing properties
    
    
    12,703Other
    
    
    159Total assets acquired
    
    
    12,939Current liabilities
    
    
    (115
    )Mortgage debt assumed net of premium/discount
    
    
    Acquisition costs
    
    
    (65
    )Purchase price
    
    $
    12,759
      75




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##### Table of Contents



5. Disposition of real estate investments and discontinued operations
   2007
    
    
    2006Student housing leasing revenue
    
    $
    2,692
    
    
    $
    6,236Student housing leasing operating expenses
    
    
    (1,159
    )
    
    
    (3,166
    )Depreciation and amortization
    
    
    (711
    )
    
    
    (2,048
    )Minority interest in Operating Partnership
    
    
    (34
    )
    
    
    (49
    )Income from discontinued operations (net of minority interest)
    
    $
    788
    
    
    $
    973Gain on sale of student housing property
    
    $
    1,644
    
    
    $
    Minority interest in Operating Partnership
    
    
    (65
    )
    
    
    Gain on sale of student housing property (net of minority interest)
    
    $
    1,579
    
    
    $
    
   76




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##### Table of Contents



6. Student housing properties
  2008
    
    
    2007Land
    
    $
    58,754
    
    
    $
    59,850Land improvements
    
    
    51,837
    
    
    
    53,250Construction in progress
    
    
    2,453
    
    
    
    1,749Buildings
    
    
    691,451
    
    
    
    667,120Furniture, fixtures and equipment
    
    
    43,102
    
    
    
    37,219847,597
    
    
    
    819,188Less accumulated depreciation
    
    
    (114,090
    )
    
    
    (86,209
    )Student housing properties, net
    
    $
    733,507
    
    
    $
    732,979
  Initial Cost
    
    
    Cost
    
    
    Total Costs
    
    
    
    
    
    
    Date ofBuildings and
    
    
    
    
    
    
    Capitalized
    
    
    
    
    
    
    Buildings and
    
    
    
    
    
    
    Accumulated
    
    
    Acquisition/Property(4)
    
    Encumbrances
    
    
    Land
    
    
    Improvements
    
    
    Total
    
    
    Subsequently
    
    
    Land
    
    
    Improvements
    
    
    Total
    
    
    Depreciation(5)
    
    
    ConstructionUniversity Towers
    
    $
    25,000
    
    
    $
    
    
    
    $
    28,652
    
    
    $
    28,652
    
    
    $
    1,632
    
    
    $
    
    
    
    $
    30,284
    
    
    $
    30,284
    
    
    $
    5,251
    
    
    
    01/31/05The Gables
    
    
    4,291
    
    
    
    198
    
    
    
    5,099
    
    
    
    5,297
    
    
    
    283
    
    
    
    198
    
    
    
    5,382
    
    
    
    5,580
    
    
    
    961
    
    
    
    01/31/05The Reserve at Athens
    
    
    
    
    
    
    1,740
    
    
    
    17,985
    
    
    
    19,725
    
    
    
    390
    
    
    
    1,740
    
    
    
    18,375
    
    
    
    20,115
    
    
    
    2,827
    
    
    
    01/31/05Players Club
    
    
    
    
    
    
    727
    
    
    
    7,498
    
    
    
    8,225
    
    
    
    532
    
    
    
    727
    
    
    
    8,030
    
    
    
    8,757
    
    
    
    1,295
    
    
    
    01/31/05College Station
    
    
    
    
    
    
    244
    
    
    
    2,190
    
    
    
    2,434
    
    
    
    218
    
    
    
    244
    
    
    
    2,408
    
    
    
    2,652
    
    
    
    545
    
    
    
    01/31/05The Reserve at Clemson
    
    
    12,000
    
    
    
    625
    
    
    
    18,230
    
    
    
    18,855
    
    
    
    598
    
    
    
    625
    
    
    
    18,828
    
    
    
    19,453
    
    
    
    3,200
    
    
    
    01/31/05NorthPointe
    
    
    18,800
    
    
    
    2,498
    
    
    
    27,323
    
    
    
    29,821
    
    
    
    908
    
    
    
    2,498
    
    
    
    28,231
    
    
    
    30,729
    
    
    
    4,465
    
    
    
    01/31/05The Pointe at South Florida (1)
    
    
    8,662
    
    
    
    3,508
    
    
    
    30,510
    
    
    
    34,018
    
    
    
    1,923
    
    
    
    3,508
    
    
    
    32,433
    
    
    
    35,941
    
    
    
    5,417
    
    
    
    01/31/05The Reserve on Perkins
    
    
    15,492
    
    
    
    913
    
    
    
    15,795
    
    
    
    16,708
    
    
    
    777
    
    
    
    913
    
    
    
    16,572
    
    
    
    17,485
    
    
    
    2,825
    
    
    
    01/31/05The Commons at Knoxville(1)
    
    
    21,774
    
    
    
    4,630
    
    
    
    18,386
    
    
    
    23,016
    
    
    
    729
    
    
    
    4,630
    
    
    
    19,115
    
    
    
    23,745
    
    
    
    3,191
    
    
    
    01/31/05The Reserve at Tallahassee
    
    
    
    
    
    
    2,743
    
    
    
    21,176
    
    
    
    23,919
    
    
    
    993
    
    
    
    2,743
    
    
    
    22,169
    
    
    
    24,912
    
    
    
    3,596
    
    
    
    01/31/05The Pointe at Western (3)
    
    
    5,625
    
    
    
    1,096
    
    
    
    30,647
    
    
    
    31,743
    
    
    
    1,973
    
    
    
    1,096
    
    
    
    32,620
    
    
    
    33,716
    
    
    
    5,128
    
    
    
    01/31/05College Station at W. Lafayette (2)
    
    
    19,565
    
    
    
    1,887
    
    
    
    19,528
    
    
    
    21,415
    
    
    
    956
    
    
    
    1,887
    
    
    
    20,484
    
    
    
    22,371
    
    
    
    3,636
    
    
    
    01/31/05The Commons on Kinnear (3)
    
    
    15,000
    
    
    
    1,327
    
    
    
    20,803
    
    
    
    22,130
    
    
    
    582
    
    
    
    1,327
    
    
    
    21,385
    
    
    
    22,712
    
    
    
    3,145
    
    
    
    01/31/05The Pointe at Penn State(2)
    
    
    28,687
    
    
    
    2,151
    
    
    
    35,094
    
    
    
    37,245
    
    
    
    1,213
    
    
    
    2,151
    
    
    
    36,307
    
    
    
    38,458
    
    
    
    5,421
    
    
    
    01/31/05The Reserve at Star Pass(2)
    
    
    23,854
    
    
    
    1,584
    
    
    
    30,810
    
    
    
    32,394
    
    
    
    795
    
    
    
    1,584
    
    
    
    31,605
    
    
    
    33,189
    
    
    
    5,084
    
    
    
    01/31/05The Reserve at Columbia (1)
    
    
    15,003
    
    
    
    1,071
    
    
    
    26,134
    
    
    
    27,205
    
    
    
    788
    
    
    
    1,071
    
    
    
    26,922
    
    
    
    27,993
    
    
    
    3,958
    
    
    
    01/31/05
  77




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##### Table of Contents



Initial Cost
    
    
    Cost
    
    
    Total Costs
    
    
    
    
    
    
    Date ofBuildings and
    
    
    
    
    
    
    Capitalized
    
    
    
    
    
    
    Buildings and
    
    
    
    
    
    
    Accumulated
    
    
    Acquisition/Property(4)
    
    Encumbrances
    
    
    Land
    
    
    Improvements
    
    
    Total
    
    
    Subsequently
    
    
    Land
    
    
    Improvements
    
    
    Total
    
    
    Depreciation(5)
    
    
    ConstructionThe Reserve on Frankford
    
    
    7,020
    
    
    
    1,181
    
    
    
    26,758
    
    
    
    27,939
    
    
    
    717
    
    
    
    1,181
    
    
    
    27,475
    
    
    
    28,656
    
    
    
    4,881
    
    
    
    01/31/05The Lofts
    
    
    27,000
    
    
    
    2,801
    
    
    
    34,117
    
    
    
    36,918
    
    
    
    446
    
    
    
    2,801
    
    
    
    34,563
    
    
    
    37,364
    
    
    
    4,949
    
    
    
    01/31/05The Reserve on West 31st
    
    
    
    
    
    
    1,896
    
    
    
    14,920
    
    
    
    16,816
    
    
    
    1,367
    
    
    
    1,896
    
    
    
    16,287
    
    
    
    18,183
    
    
    
    2,800
    
    
    
    01/31/05Campus Creek
    
    
    
    
    
    
    2,251
    
    
    
    21,604
    
    
    
    23,855
    
    
    
    953
    
    
    
    2,251
    
    
    
    22,557
    
    
    
    24,808
    
    
    
    3,662
    
    
    
    02/22/05Pointe West
    
    
    10,637
    
    
    
    2,318
    
    
    
    10,924
    
    
    
    13,242
    
    
    
    400
    
    
    
    2,318
    
    
    
    11,324
    
    
    
    13,642
    
    
    
    2,132
    
    
    
    03/17/05Campus Lodge
    
    
    35,841
    
    
    
    2,746
    
    
    
    44,415
    
    
    
    47,161
    
    
    
    592
    
    
    
    2,746
    
    
    
    45,007
    
    
    
    47,753
    
    
    
    6,424
    
    
    
    06/07/05College Grove (1)
    
    
    14,824
    
    
    
    1,334
    
    
    
    19,270
    
    
    
    20,604
    
    
    
    1,826
    
    
    
    1,334
    
    
    
    21,096
    
    
    
    22,430
    
    
    
    3,963
    
    
    
    04/27/05The Reserve on South College (3)
    
    
    12,750
    
    
    
    1,744
    
    
    
    10,784
    
    
    
    12,528
    
    
    
    1,742
    
    
    
    1,744
    
    
    
    12,526
    
    
    
    14,270
    
    
    
    2,206
    
    
    
    07/06/05The Avenue at Southern(3)
    
    
    9,479
    
    
    
    2,028
    
    
    
    10,675
    
    
    
    12,703
    
    
    
    2,026
    
    
    
    2,028
    
    
    
    12,701
    
    
    
    14,729
    
    
    
    1,371
    
    
    
    06/15/06The Reserve at Saluki Pointe
    
    
    10,901
    
    
    
    1,099
    
    
    
    20,580
    
    
    
    21,679
    
    
    
    
    
    
    
    1,099
    
    
    
    20,580
    
    
    
    21,679
    
    
    
    241
    
    
    
    08/01/08Troy Place
    
    
    9,440
    
    
    
    523
    
    
    
    12,404
    
    
    
    12,927
    
    
    
    507
    
    
    
    523
    
    
    
    12,911
    
    
    
    13,434
    
    
    
    1,471
    
    
    
    01/01/06The Reserve at Jacksonville
    
    
    11,120
    
    
    
    628
    
    
    
    14,532
    
    
    
    15,160
    
    
    
    440
    
    
    
    628
    
    
    
    14,972
    
    
    
    15,600
    
    
    
    1,685
    
    
    
    01/01/06The Pointe at Southern
    
    
    
    
    
    
    1,180
    
    
    
    17,288
    
    
    
    18,468
    
    
    
    554
    
    
    
    1,180
    
    
    
    17,842
    
    
    
    19,022
    
    
    
    1,981
    
    
    
    01/01/06Macon Place
    
    
    7,440
    
    
    
    340
    
    
    
    9,856
    
    
    
    10,196
    
    
    
    313
    
    
    
    340
    
    
    
    10,169
    
    
    
    10,509
    
    
    
    1,165
    
    
    
    01/01/06Clayton Place
    
    
    24,540
    
    
    
    4,291
    
    
    
    28,843
    
    
    
    33,134
    
    
    
    379
    
    
    
    4,291
    
    
    
    27,588
    
    
    
    31,879
    
    
    
    3,036
    
    
    
    01/01/06Carrollton Place
    
    
    
    
    
    
    682
    
    
    
    12,166
    
    
    
    12,848
    
    
    
    322
    
    
    
    682
    
    
    
    12,488
    
    
    
    13,170
    
    
    
    1,306
    
    
    
    01/01/06River Place
    
    
    13,680
    
    
    
    837
    
    
    
    17,746
    
    
    
    18,583
    
    
    
    434
    
    
    
    837
    
    
    
    18,180
    
    
    
    19,017
    
    
    
    2,035
    
    
    
    01/01/06The Chase at Murray
    
    
    6,800
    
    
    
    550
    
    
    
    8,864
    
    
    
    9,414
    
    
    
    651
    
    
    
    550
    
    
    
    9,515
    
    
    
    10,065
    
    
    
    1,168
    
    
    
    01/01/06Western Place
    
    
    
    
    
    
    660
    
    
    
    16,332
    
    
    
    16,992
    
    
    
    255
    
    
    
    660
    
    
    
    16,587
    
    
    
    17,247
    
    
    
    1,814
    
    
    
    01/01/06Cape Place
    
    
    8,520
    
    
    
    445
    
    
    
    11,207
    
    
    
    11,652
    
    
    
    412
    
    
    
    445
    
    
    
    11,619
    
    
    
    12,064
    
    
    
    1,310
    
    
    
    01/01/06Clemson Place
    
    
    8,160
    
    
    
    759
    
    
    
    10,317
    
    
    
    11,076
    
    
    
    293
    
    
    
    759
    
    
    
    10,610
    
    
    
    11,369
    
    
    
    1,152
    
    
    
    01/01/06Berkeley Place
    
    
    
    
    
    
    1,048
    
    
    
    18,497
    
    
    
    19,545
    
    
    
    243
    
    
    
    1,048
    
    
    
    18,740
    
    
    
    19,788
    
    
    
    2,005
    
    
    
    01/01/06The Reserve at Martin
    
    
    8,960
    
    
    
    471
    
    
    
    11,784
    
    
    
    12,255
    
    
    
    572
    
    
    
    471
    
    
    
    12,356
    
    
    
    12,827
    
    
    
    1,388
    
    
    
    01/01/06Totals
    
    $
    440,865
    
    
    $
    58,754
    
    
    $
    758,896
    
    
    $
    817,650
    
    
    $
    30,734
    
    
    $
    58,754
    
    
    $
    785,801
    
    
    $
    847,597
    
    
    $
    114,090
 (1)
    
    The Pointe at South Florida, College Grove, The
Commons at Knoxville and The Reserve at Columbia are
cross collateralized against the $60,263 outstanding
loan discussed in Note 10.(2)
    
    The Pointe at Penn State, The Reserve at Star Pass and
College Station at West Lafayette are cross
collateralized against the $72,106 outstanding loan
discussed in Note 10.(3)
    
    The Pointe at Western, The Commons on Kinnear, The Reserve on South
College and at The Avenue at Southern are cross collateralized against
the $49,874 outstanding loan discussed in Note 10.(4)
    
    All properties are garden-style student housing
communities except for University Towers which is a
traditional residence hall.(5)
    
    Assets have useful lives ranging from 3 to 40 years.  78




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##### Table of Contents



2008
    
    
    2007
    
    
    2006Balance, beginning of period
    
    $
    819,188
    
    
    $
    863,248
    
    
    $
    643,515Student housing acquisitions or completed developments
    
    
    21,679
    
    
    
    
    
    
    
    214,953Student housing dispositions
    
    
    
    
    
    
    (52,406
    )
    
    
    Impairment loss
    
    
    (1,633
    )
    
    
    
    
    
    
    Additions
    
    
    13,986
    
    
    
    8,463
    
    
    
    4,860Disposals
    
    
    (5,623
    )
    
    
    (117
    )
    
    
    (80
    )Balance, end of period
    
    $
    847,597
    
    
    $
    819,188
    
    
    $
    863,248
  2008
    
    
    2007
    
    
    2006Balance, beginning of period
    
    $
    86,209
    
    
    $
    58,489
    
    
    $
    23,210Depreciation
    
    
    28,819
    
    
    
    32,409
    
    
    
    35,320Disposals
    
    
    (938
    )
    
    
    (77
    )
    
    
    (41
    )Student housing dispositions
    
    
    
    
    
    
    (4,612
    )
    
    
    Balance, end of period
    
    $
    114,090
    
    
    $
    86,209
    
    
    $
    58,489
  7. Corporate office furniture and other assets
   2008
    
    
    2007Accounts receivable related to development
    
    $
    965
    
    
    $
    2,524Refundable deposit
    
    
    7,162
    
    
    
    Prepaid expenses
    
    
    371
    
    
    
    1,027Deferred tax asset
    
    
    653
    
    
    
    730Deferred financing costs
    
    
    3,306
    
    
    
    1,918Investments in unconsolidated entities
    
    
    2,759
    
    
    
    2,671Note receivable
    
    
    834
    
    
    
    845Other
    
    
    1,385
    
    
    
    692Total other assets
    
    $
    17,435
    
    
    $
    10,407
 8. Investments in unconsolidated entities
  Financial Position:
 As of December 31,
    
    2008
    
    
    2007Total assets
    
    $
    147,951
    
    
    $
    145,644Total liabilities
    
    
    114,348
    
    
    
    116,040Equity
    
    
    33,603
    
    
    
    29,604Trusts and EDR Predecessors investment in unconsolidated entities
    
    $
    2,759
    
    
    $
    2,671
 Results of Operations:
 For the years ended December 31,
    
    2008
    
    
    2007
    
    
    2006Revenues
    
    $
    16,415
    
    
    $
    13,283
    
    
    $
    3,909Net income (loss)
    
    
    (1,890
    )
    
    
    (4,194
    )
    
    
    1,013Trusts and EDR Predecessors equity in earnings (losses) of unconsolidated entities
    
    $
    (196
    )
    
    $
    (277
    )
    
    $
    740
   79




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##### Table of Contents



9. Incentive plans
   
    80




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##### Table of Contents



StockPIUs
    
    
    Awards(1)
    
    
    TotalOutstanding at December 31, 2005
    
    
    245,000
    
    
    
    186,000
    
    
    
    431,000Granted
    
    
    22,500
    
    
    
    6,000
    
    
    
    28,500Retired
    
    
    (2,500
    )
    
    
    
    
    
    
    (2,500
    )Outstanding at December 31, 2006
    
    
    265,000
    
    
    
    192,000
    
    
    
    457,000Granted
    
    
    17,500
    
    
    
    8,000
    
    
    
    25,500Retired
    
    
    (5,000
    )
    
    
    
    
    
    
    (5,000
    )Outstanding at December 31, 2007
    
    
    277,500
    
    
    
    200,000
    
    
    
    477,500Granted
    
    
    10,000
    
    
    
    8,000
    
    
    
    18,000Retired
    
    
    (12,500
    )
    
    
    
    
    
    
    (12,500
    )Outstanding at December 31, 2008
    
    
    275,000
    
    
    
    208,000
    
    
    
    483,000Vested at December 31, 2008
    
    
    275,000
    
    
    
    168,889
    
    
    
    443,889
 (1)
    
    Includes restricted stock awards. 10. Debt
 Revolving credit facility
       81




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##### Table of Contents



Mortgage and construction debt
  Outstanding atDecember 31,
    
    
    
    
    
    
    MaturityProperty
    
    2008
    
    
    Interest Rate
    
    
    Date
    
    
    AmortizationUniversity Towers
    
    $
    25,000
    
    
    
    5.99
    %
    
    
    7/1/2013
    
    
    30 YearThe Reserve at Clemson
    
    
    12,000
    
    
    
    5.55
    %
    
    
    3/1/2012
    
    
    30 YearThe Gables
    
    
    4,291
    
    
    
    5.50
    %
    
    
    11/1/2013
    
    
    30 YearNorthPointe
    
    
    18,800
    
    
    
    5.55
    %
    
    
    3/1/2012
    
    
    30 YearThe Pointe at S. Florida/The Reserve at Columbia/ The Commons at Knoxville/College Grove
    
    
    60,263
    
    
    
    6.02
    %
    
    
    1/1/2019
    
    
    30 YearThe Reserve at Perkins
    
    
    15,492
    
    
    
    5.99
    %
    
    
    1/1/2014
    
    
    30 YearThe Lofts
    
    
    27,000
    
    
    
    5.59
    %
    
    
    5/1/2014
    
    
    30 YearCollege Station at W. Lafayette/The Pointe at Penn State/The Reserve at Star Pass
    
    
    72,106
    
    
    
    6.02
    %
    
    
    1/1/2016
    
    
    30 YearCampus Lodge
    
    
    35,841
    
    
    
    6.97
    %
    
    
    5/1/2012
    
    
    30 YearPointe West
    
    
    10,637
    
    
    
    4.92
    %
    
    
    8/1/2014
    
    
    30 YearThe Pointe at Western/The Commons on Kinnear/The Reserve on South College/The Avenue at
Southern
    
    
    42,854
    
    
    
    3.91
    %
    
    
    1/1/2014
    
    
    30 YearThe Reserve on Frankford
    
    
    7,020
    
    
    
    3.81
    %
    
    
    1/1/2014
    
    
    30 YearThe Reserve at Saluki Pointe
    
    
    10,901
    
    
    
    2.57
    %
    
    
    6/28/2012
    
    
    30 YearSyracuse University Development Project
    
    
    191
    
    
    
    2.30
    %
    
    
    9/29/2013
    
    
    30 YearTroy Place
    
    
    9,440
    
    
    
    6.44
    %
    
    
    12/9/2009
    
    
    30 YearThe Reserve at Jacksonville
    
    
    11,120
    
    
    
    6.44
    %
    
    
    12/9/2009
    
    
    30 YearMacon Place
    
    
    7,440
    
    
    
    6.44
    %
    
    
    12/9/2009
    
    
    30 YearClayton Place
    
    
    24,540
    
    
    
    6.44
    %
    
    
    12/9/2009
    
    
    30 YearRiver Place
    
    
    13,680
    
    
    
    6.44
    %
    
    
    12/9/2009
    
    
    30 YearThe Chase at Murray
    
    
    6,800
    
    
    
    6.44
    %
    
    
    12/9/2009
    
    
    30 YearCape Place
    
    
    8,520
    
    
    
    6.44
    %
    
    
    12/9/2009
    
    
    30 YearClemson Place
    
    
    8,160
    
    
    
    6.44
    %
    
    
    12/9/2009
    
    
    30 YearThe Reserve at Martin
    
    
    8,960
    
    
    
    6.44
    %
    
    
    12/9/2009
    
    
    30 YearTotal debt/weighted average rate
    
    
    441,056
    
    
    
    5.77
    %Unamortized premium
    
    
    1,203Total mortgage loans net of unamortized premium
    
    
    442,259Less current portion of mortgage debt
    
    
    101,631Total long-term debt, net of current portion
    
    $
    340,628
    82




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##### Table of Contents



Prepaid onDecember 31,
    
    
    Contractual Fixed
    
    
    MaturityProperty
    
    2008
    
    
    Interest Rate
    
    
    Date
    
    
    AmortizationThe Pointe at S. Florida
    
    $
    23,142
    
    
    
    5.48
    %
    
    
    7/7/2009
    
    
    30 YearThe Pointe at Western
    
    
    20,915
    
    
    
    5.48
    %
    
    
    7/7/2009
    
    
    30 YearThe Reserve on Perkins/The Commons at Knoxville
    
    
    30,984
    
    
    
    5.48
    %
    
    
    7/7/2009
    
    
    30 YearThe Pointe at Penn State/The Reserve at Star Pass
    
    
    49,129
    
    
    
    5.48
    %
    
    
    7/7/2009
    
    
    30 YearCollege Station at W. Lafayette
    
    
    14,330
    
    
    
    5.48
    %
    
    
    7/7/2009
    
    
    30 YearThe Commons on Kinnear
    
    
    14,233
    
    
    
    5.48
    %
    
    
    7/7/2009
    
    
    30 YearThe Reserve at Frankford
    
    
    14,040
    
    
    
    5.48
    %
    
    
    7/7/2009
    
    
    30 YearThe Reserve at Columbia
    
    
    18,784
    
    
    
    5.48
    %
    
    
    7/7/2009
    
    
    30 YearTotal
    
    $
    185,557
  Outstanding atDecember 31,
    
    
    
    
    
    
    
    
    
    
    MaturityProperty
    
    2008
    
    
    Interest Rate
    
    
    Date
    
    
    AmortizationThe Pointe at S. Florida/The Reserve at Columbia/The Commons at Knoxville/College Grove
    
    $
    60,263
    
    
    fixed
    
    
    6.02
    %
    
    
    1/1/2019
    
    
    30 YearThe Reserve at Perkins
    
    
    15,492
    
    
    fixed
    
    
    5.99
    %
    
    
    1/1/2014
    
    
    30 YearCollege Station at W. Lafayette/The Pointe at Penn State/The Reserve at Star Pass
    
    
    72,106
    
    
    fixed
    
    
    6.02
    %
    
    
    1/1/2016
    
    
    30 YearThe Pointe at Western/The Commons on Kinnear/The Reserve on South College/The Avenue at
Southern
    
    
    42,854
    
    
    (1)variable
    
    
    3.91
    %
    
    
    1/1/2014
    
    
    30 YearThe Reserve on Frankford
    
    
    7,020
    
    
    (1)variable
    
    
    3.81
    %
    
    
    1/1/2014
    
    
    30 YearTotal
    
    $
    197,735
 (1)
    
    The variable interest rate loans are based on the 30-day LIBOR plus an applicable margin.  83




---



##### Table of Contents



Outstanding atDecember 31,
    
    
    Contractual Fixed
    
    
    MaturityProperty
    
    2007
    
    
    Interest Rate
    
    
    Date
    
    
    AmortizationUniversity Towers
    
    $
    23,099
    
    
    
    6.77
    %
    
    
    3/1/2008
    
    
    30 YearThe Reserve at Clemson
    
    
    12,000
    
    
    
    5.55
    %
    
    
    3/1/2012
    
    
    30 YearThe Gables
    
    
    4,364
    
    
    
    5.50
    %
    
    
    11/1/2013
    
    
    30 YearNorthPointe
    
    
    18,800
    
    
    
    5.55
    %
    
    
    3/1/2012
    
    
    30 YearThe Pointe at S. Florida
    
    
    23,467
    
    
    
    5.48
    %
    
    
    7/7/2009
    
    
    30 YearThe Pointe at Western
    
    
    21,209
    
    
    
    5.48
    %
    
    
    7/7/2009
    
    
    30 YearThe Lofts
    
    
    27,000
    
    
    
    5.59
    %
    
    
    5/1/2014
    
    
    30 YearThe Reserve on Perkins/The Commons at Knoxville
    
    
    31,420
    
    
    
    5.48
    %
    
    
    7/7/2009
    
    
    30 YearThe Pointe at Penn State/The Reserve at Star Pass
    
    
    49,821
    
    
    
    5.48
    %
    
    
    7/7/2009
    
    
    30 YearCampus Lodge
    
    
    36,362
    
    
    
    6.97
    %
    
    
    5/1/2012
    
    
    30 YearPointe West
    
    
    10,815
    
    
    
    4.92
    %
    
    
    8/1/2014
    
    
    30 YearCollege Station at W. Lafayette
    
    
    14,531
    
    
    
    5.48
    %
    
    
    7/7/2009
    
    
    30 YearThe Commons on Kinnear
    
    
    14,434
    
    
    
    5.48
    %
    
    
    7/7/2009
    
    
    30 YearThe Reserve at Frankford
    
    
    14,237
    
    
    
    5.48
    %
    
    
    7/7/2009
    
    
    30 YearThe Reserve at Columbia
    
    
    19,048
    
    
    
    5.48
    %
    
    
    7/7/2009
    
    
    30 YearTroy Place
    
    
    9,440
    
    
    
    6.44
    %
    
    
    12/9/2009
    
    
    30 YearJacksonville Place
    
    
    11,120
    
    
    
    6.44
    %
    
    
    12/9/2009
    
    
    30 YearMacon Place
    
    
    7,440
    
    
    
    6.44
    %
    
    
    12/9/2009
    
    
    30 YearClayton Place
    
    
    24,540
    
    
    
    6.44
    %
    
    
    12/9/2009
    
    
    30 YearRiver Place
    
    
    13,680
    
    
    
    6.44
    %
    
    
    12/9/2009
    
    
    30 YearMurray Place
    
    
    6,800
    
    
    
    6.44
    %
    
    
    12/9/2009
    
    
    30 YearCape Place
    
    
    8,520
    
    
    
    6.44
    %
    
    
    12/9/2009
    
    
    30 YearClemson Place
    
    
    8,160
    
    
    
    6.44
    %
    
    
    12/9/2009
    
    
    30 YearMartin Place
    
    
    8,960
    
    
    
    6.44
    %
    
    
    12/9/2009
    
    
    30 YearTotal debt/weighted average rate
    
    
    419,267
    
    
    
    5.90
    %Unamortized premium
    
    
    1,673Total mortgage loans net of unamortized premium
    
    
    420,940Less current portion of mortgage debt
    
    
    (26,481
    )Total long-term debt, net of current portion
    
    $
    394,459
  84




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##### Table of Contents



2008
    
    
    2007
    
    
    2006Balance, beginning of period
    
    $
    420,940
    
    
    $
    423,933
    
    
    $
    328,335Assumption of mortgage debt at fair value
    
    
    
    
    
    
    
    
    
    
    98,660Additions
    
    
    233,827
    
    
    
    57,800
    
    
    
    Repayments of principal
    
    
    (212,038
    )
    
    
    (60,158
    )
    
    
    (2,503
    )Amortization of premium
    
    
    (470
    )
    
    
    (635
    )
    
    
    (559
    )Balance, end of period
    
    $
    442,259
    
    
    $
    420,940
    
    
    $
    423,933
  Year2009
    
    $
    101,6312010
    
    
    36,3482011
    
    
    3,7652012
    
    
    78,4172013
    
    
    32,488Thereafter
    
    
    221,307Total
    
    
    473,956Debt premium
    
    
    1,203Outstanding as of December 31, 2008, net of debt premium
    
    $
    475,159
   85




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##### Table of Contents



11. Segments
   Year Ended December 31, 2008
    
    
    Year Ended December 31, 2007Student
    
    
    Development
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Student
    
    
    DevelopmentHousing
    
    
    Consulting
    
    
    Management
    
    
    
    
    
    
    
    
    
    
    Housing
    
    
    Consulting
    
    
    ManagementLeasing
    
    
    Services
    
    
    Services
    
    
    Adjustments
    
    
    Total
    
    
    Leasing
    
    
    Services
    
    
    Services
    
    
    Adjustments
    
    
    TotalRevenues:Student housing
leasing revenue
    
    
    107,566
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    107,566
    
    
    $
    85,651
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    85,651Student housing
food service
revenue
    
    
    2,378
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,378
    
    
    
    2,359
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,359Other leasing
revenue
    
    
    7,145
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,145
    
    
    
    13,811
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,811Third-party
development
consulting
services
    
    
    
    
    
    
    8,303
    
    
    
    
    
    
    
    
    
    
    
    8,303
    
    
    
    
    
    
    
    5,411
    
    
    
    
    
    
    
    
    
    
    
    5,411Third-party
management
services
    
    
    
    
    
    
    
    
    
    
    3,672
    
    
    
    
    
    
    
    3,672
    
    
    
    
    
    
    
    
    
    
    
    3,391
    
    
    
    
    
    
    
    3,391Intersegment
revenues
    
    
    
    
    
    
    661
    
    
    
    4,306
    
    
    
    (4,967
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,428
    
    
    
    (3,428
    )
    
    
    Operating expense
reimbursements
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,796
    
    
    
    10,796
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,330
    
    
    
    9,330Total revenues
    
    
    117,089
    
    
    
    8,964
    
    
    
    7,978
    
    
    
    5,829
    
    
    
    139,860
    
    
    
    101,821
    
    
    
    5,411
    
    
    
    6,819
    
    
    
    5,902
    
    
    
    119,953Operating expenses:Student housing
leasing operations
    
    
    55,569
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    55,569
    
    
    
    41,215
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    41,215Student housing
food service
operations
    
    
    2,257
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,257
    
    
    
    2,236
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,236General and
administrative
    
    
    3
    
    
    
    4,196
    
    
    
    7,234
    
    
    
    (337
    )
    
    
    11,096
    
    
    
    105
    
    
    
    2,787
    
    
    
    6,628
    
    
    
    
    
    
    
    9,520Intersegment
expenses
    
    
    4,306
    
    
    
    
    
    
    
    
    
    
    
    (4,306
    )
    
    
    
    
    
    
    3,428
    
    
    
    
    
    
    
    
    
    
    
    (3,428
    )
    
    
    Reimbursable
operating expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,796
    
    
    
    10,796
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,330
    
    
    
    9,330Total operating
expenses
    
    
    62,135
    
    
    
    4,196
    
    
    
    7,234
    
    
    
    6,153
    
    
    
    79,718
    
    
    
    46,984
    
    
    
    2,787
    
    
    
    6,628
    
    
    
    5,902
    
    
    
    62,301Net operating income
    
    
    54,954
    
    
    
    4,768
    
    
    
    744
    
    
    
    (324
    )
    
    
    60,142
    
    
    
    54,837
    
    
    
    2,624
    
    
    
    191
    
    
    
    
    
    
    
    57,652Nonoperating
expenses(1)
    
    
    60,213
    
    
    
    (76
    )
    
    
    
    
    
    
    
    
    
    
    60,137
    
    
    
    58,111
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    58,111Income
(loss) before
equity in earnings
of unconsolidated
entities, income
taxes, minority
interest and
discontinued
operations
    
    
    (5,259
    )
    
    
    4,844
    
    
    
    744
    
    
    
    (324
    )
    
    
    5
    
    
    
    (3,274
    )
    
    
    2,624
    
    
    
    191
    
    
    
    
    
    
    
    (459
    )Equity in earnings
of unconsolidated
entities
    
    
    (192
    )
    
    
    (4
    )
    
    
    
    
    
    
    
    
    
    
    (196
    )
    
    
    (510
    )
    
    
    233
    
    
    
    
    
    
    
    
    
    
    
    (277
    )Income
(loss) before
taxes, minority
interest and
discontinued
operations(2)
    
    $
    (5,451
    )
    
    $
    4,840
    
    
    $
    744
    
    
    $
    (324
    )
    
    $
    (191
    )
    
    $
    (3,784
    )
    
    $
    2,857
    
    
    $
    191
    
    
    $
    
    
    
    $
    (736
    )Total segment
assets, as of
December 31, 2008
and 2007(3)
    
    $
    760,477
    
    
    $
    2,381
    
    
    $
    4,567
    
    
    $
    
    
    
    $
    767,425
    
    
    $
    751,086
    
    
    $
    4,528
    
    
    $
    6,505
    
    
    $
    
    
    
    $
    762,119
 (1)

    
    Nonoperating expenses include interest expense, interest income, exit fees
on early payment of debt, amortization of deferred financing costs,
depreciation, amortization of intangibles and impairment losses on assets.
  86




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##### Table of Contents



(2)

    
    Reconciliation of segment revenues and segment net loss before taxes,
minority interest and discontinued operations to the Trusts consolidated
revenues and net loss before taxes, minority interest and discontinued
operations:
 2008
    
    
    2007Total segment revenues
    
    $
    144,827
    
    
    $
    123,381Elimination of intersegment revenues
    
    
    (4,967
    )
    
    
    (3,428
    )Total consolidated revenues
    
    
    139,860
    
    
    
    119,953Segment net loss before taxes, minority interest and discontinued operations
    
    
    (191
    )
    
    
    (736
    )Other unallocated corporate expenses
    
    
    (6,761
    )
    
    
    (6,828
    )Net loss before taxes, minority interest and discontinued operations
    
    $
    (6,952
    )
    
    $
    (7,564
    )(3)     Reconciliation of segment assets to the Trusts total assets:Total segment assets, end of period (includes goodwill of $2,149 related to
management services and $921 related to development consulting services)
    
    $
    767,425
    
    
    $
    762,119Unallocated corporate amounts:Cash
    
    
    3,765
    
    
    
    298Other assets
    
    
    6,242
    
    
    
    4,377Deferred financing costs, net
    
    
    215
    
    
    
    666Total assets, end of period
    
    $
    777,647
    
    
    $
    767,460
  87




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##### Table of Contents



Year Ended December 31, 2007
    
    
    Year Ended December 31, 2006Student
    
    
    Development
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Student
    
    
    DevelopmentHousing
    
    
    Consulting
    
    
    Management
    
    
    
    
    
    
    
    
    
    
    Housing
    
    
    Consulting
    
    
    ManagementLeasing
    
    
    Services
    
    
    Services
    
    
    Adjustments
    
    
    Total
    
    
    Leasing
    
    
    Services
    
    
    Services
    
    
    Adjustments
    
    
    TotalRevenues:Student housing
leasing revenue
    
    $
    85,651
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    85,651
    
    
    $
    81,202
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    81,202Student housing
food service
revenue
    
    
    2,359
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,359
    
    
    
    3,634
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,634Other leasing
revenue
    
    
    13,811
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,811
    
    
    
    14,012
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,012Third-party
development
consulting
services
    
    
    
    
    
    
    5,411
    
    
    
    
    
    
    
    
    
    
    
    5,411
    
    
    
    
    
    
    
    3,773
    
    
    
    
    
    
    
    
    
    
    
    3,773Third-party
management
services
    
    
    
    
    
    
    
    
    
    
    3,391
    
    
    
    
    
    
    
    3,391
    
    
    
    
    
    
    
    
    
    
    
    2,796
    
    
    
    
    
    
    
    2,796Intersegment
revenues
    
    
    
    
    
    
    
    
    
    
    3,428
    
    
    
    (3,428
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,298
    
    
    
    (3,298
    )
    
    
    Operating expense
reimbursements
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,330
    
    
    
    9,330
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,638
    
    
    
    7,638Total revenues
    
    
    101,821
    
    
    
    5,411
    
    
    
    6,819
    
    
    
    5,902
    
    
    
    119,953
    
    
    
    98,848
    
    
    
    3,773
    
    
    
    6,094
    
    
    
    4,340
    
    
    
    113,055Operating expenses:Student housing
leasing operations
    
    
    41,215
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    41,215
    
    
    
    39,503
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    39,503Student housing
food service
operations
    
    
    2,236
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,236
    
    
    
    3,318
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,318General and
administrative
    
    
    105
    
    
    
    2,787
    
    
    
    6,628
    
    
    
    
    
    
    
    9,520
    
    
    
    21
    
    
    
    2,210
    
    
    
    5,004
    
    
    
    
    
    
    
    7,235Intersegment
expenses
    
    
    3,428
    
    
    
    
    
    
    
    
    
    
    
    (3,428
    )
    
    
    
    
    
    
    3,298
    
    
    
    
    
    
    
    
    
    
    
    (3,298
    )
    
    
    Reimbursable
operating expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,330
    
    
    
    9,330
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,638
    
    
    
    7,638Total operating
expenses
    
    
    46,984
    
    
    
    2,787
    
    
    
    6,628
    
    
    
    5,902
    
    
    
    62,301
    
    
    
    46,140
    
    
    
    2,210
    
    
    
    5,004
    
    
    
    4,340
    
    
    
    57,694Net operating income
    
    
    54,837
    
    
    
    2,624
    
    
    
    191
    
    
    
    
    
    
    
    57,652
    
    
    
    52,708
    
    
    
    1,563
    
    
    
    1,090
    
    
    
    
    
    
    
    55,361Nonoperating
expenses(1)
    
    
    58,111
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    58,111
    
    
    
    62,660
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    62,660Income
(loss) before
equity in earnings
of unconsolidated
entities, income
taxes, minority
interest and
discontinued
operations
    
    
    (3,274
    )
    
    
    2,624
    
    
    
    191
    
    
    
    
    
    
    
    (459
    )
    
    
    (9,952
    )
    
    
    1,563
    
    
    
    1,090
    
    
    
    
    
    
    
    (7,299
    )Equity in earnings
of unconsolidated
entities
    
    
    (510
    )
    
    
    233
    
    
    
    
    
    
    
    
    
    
    
    (277
    )
    
    
    (74
    )
    
    
    814
    
    
    
    
    
    
    
    
    
    
    
    740Income
(loss) before
taxes, minority
interest and
discontinued
operations(2)
    
    $
    (3,784
    )
    
    $
    2,857
    
    
    $
    191
    
    
    $
    
    
    
    $
    (736
    )
    
    $
    (10,026
    )
    
    $
    2,377
    
    
    $
    1,090
    
    
    $
    
    
    
    $
    (6,559
    )Total segment
assets, as of
December 31, 2007
and 2006(3)
    
    $
    751,086
    
    
    $
    4,528
    
    
    $
    6,505
    
    
    $
    
    
    
    $
    762,119
    
    
    $
    818,832
    
    
    $
    2,082
    
    
    $
    5,567
    
    
    $
    
    
    
    $
    826,481
 (1)
    
    Nonoperating expenses include interest expense, interest income, exit fees on early payment of debt, amortization of deferred
financing costs, depreciation, amortization of intangibles and impairment losses on assets.  88




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(2)
    
    Reconciliation of segment revenues and segment net loss before taxes, minority interest and discontinued operations to the
Trusts consolidated revenues and net loss before taxes, minority interest and discontinued operations:
 2007
    
    
    2006Total segment revenues
    
    $
    123,381
    
    
    $
    116,353Elimination of intersegment revenues
    
    
    (3,428
    )
    
    
    (3,298
    )Total consolidated revenues
    
    
    119,953
    
    
    
    113,055Segment net loss before taxes, minority interest and discontinued operations
    
    
    (736
    )
    
    
    (6,559
    )Other unallocated corporate expenses
    
    
    (6,828
    )
    
    
    (6,404
    )Net loss before taxes, minority interest and discontinued operations
    
    $
    (7,564
    )
    
    $
    (12,963
    )(3)      Reconciliation of segment assets to the Trusts total assets:Total segment assets, end of period (includes goodwill of $2,149 related to
management services and $921 related to

development consulting services)
    
    $
    762,119
    
    
    $
    826,481Unallocated corporate amounts:Cash
    
    
    298
    
    
    
    2,752Other assets
    
    
    4,377
    
    
    
    4,801Deferred financing costs, net
    
    
    666
    
    
    
    1,424Total assets, end of period
    
    $
    767,460
    
    
    $
    835,458
 12. Related party transactions
    13. Lease commitments and unconditional purchase obligations
   89




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Year Ending
    
    Advertising
    
    
    Leases2009
    
    $
    154
    
    
    $
    4,4462010
    
    
    26
    
    
    
    3,8622011
    
    
    
    
    
    
    3,3192012
    
    
    
    
    
    
    3,7592013
    
    
    
    
    
    
    2,300Thereafter
    
    
    
    
    
    
    952
  14. Employee savings plan
  15. Accrued expenses
  2008
    
    
    2007Payroll
    
    $
    2,473
    
    
    $
    2,364Real estate taxes
    
    
    3,548
    
    
    
    2,777Interest
    
    
    1,158
    
    
    
    1,871Utilities
    
    
    1,095
    
    
    
    423Other
    
    
    2,028
    
    
    
    2,260Total accrued expenses
    
    $
    10,302
    
    
    $
    9,695
 16. Commitments and contingencies
      90




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91




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17. Quarterly financial information (unaudited)
  2008
    
    1st Quarter
    
    
    2nd Quarter
    
    
    3rd Quarter
    
    
    4th Quarter
    
    
    TotalRevenues
    
    $
    34,334
    
    
    $
    36,920
    
    
    $
    32,417
    
    
    $
    36,189
    
    
    $
    139,860Operating
expenses(1)
    
    
    26,867
    
    
    
    27,299
    
    
    
    32,581
    
    
    
    29,661
    
    
    
    116,408Nonoperating
expenses(2)
    
    
    6,289
    
    
    
    6,221
    
    
    
    6,519
    
    
    
    11,179
    
    
    
    30,208Equity in earnings of unconsolidated
entities
    
    
    (1
    )
    
    
    (26
    )
    
    
    (196
    )
    
    
    27
    
    
    
    (196
    )Income taxes (expense)/benefit
    
    
    (191
    )
    
    
    18
    
    
    
    (709
    )
    
    
    (241
    )
    
    
    (1,123
    )Minority interest (expense)/benefit
    
    
    (97
    )
    
    
    (74
    )
    
    
    329
    
    
    
    (30
    )
    
    
    128Discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Gain on sale of discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net income (loss)
    
    $
    889
    
    
    $
    3,318
    
    
    $
    (7,259
    )
    
    $
    (4,895
    )
    
    $
    (7,947
    )Net income (loss) per share-basic and
diluted
    
    $
    0.03
    
    
    $
    0.12
    
    
    $
    (0.26
    )
    
    $
    (0.17
    )
    
    $
    (0.28
    )
 2007
    
    1st Quarter
    
    
    2nd Quarter
    
    
    3rd Quarter
    
    
    4th Quarter
    
    
    TotalRevenues
    
    $
    30,066
    
    
    $
    28,960
    
    
    $
    28,332
    
    
    $
    32,595
    
    
    $
    119,953Operating expenses
    
    
    23,310
    
    
    
    23,624
    
    
    
    27,829
    
    
    
    24,802
    
    
    
    99,565Nonoperating expenses
    
    
    7,583
    
    
    
    7,274
    
    
    
    6,433
    
    
    
    6,385
    
    
    
    27,675Equity in earnings of unconsolidated
entities
    
    
    43
    
    
    
    (41
    )
    
    
    (247
    )
    
    
    (32
    )
    
    
    (277
    )Income taxes (expense)/benefit
    
    
    3
    
    
    
    46
    
    
    
    54
    
    
    
    (361
    )
    
    
    (258
    )Minority interest
    
    
    (118
    )
    
    
    122
    
    
    
    337
    
    
    
    (302
    )
    
    
    39Discontinued operations(3)
    
    
    408
    
    
    
    426
    
    
    
    (16
    )
    
    
    (30
    )
    
    
    788Gain on sale of discontinued operations
    
    
    
    
    
    
    1,579
    
    
    
    
    
    
    
    
    
    
    
    1,579Net income (loss)
    
    $
    (491
    )
    
    $
    194
    
    
    $
    (5,802
    )
    
    $
    683
    
    
    $
    (5,416
    )Net income (loss) per share-basic and
diluted
    
    $
    (0.02
    )
    
    $
    0.01
    
    
    $
    (0.22
    )
    
    $
    0.02
    
    
    $
    (0.20
    )
 (1)
    
    Operating expenses in the 4th quarter include a $2,021
impairment loss.(2)
    
    Nonoperating expenses in the 4th quarter of 2008 include a $4,360 loss on the early
retirement of debt.(3)
    
    All quarterly information presented above for 2007 reflects the classification of the Village
on Tharpes financial results as discontinued operations. The property was sold during 2007. 18. Subsequent events
   92




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Item 9. Changes in and Disagreements With Accountants on Accounting and Financial
Disclosure.
  
 Item 9A. Controls and Procedures.
 Disclosure Controls and Procedures
   Changes in Internal Control Over Financial Reporting
 15d-15(f)
 Managements Report on Internal Control Over Financial Reporting
 Financial Statements and Supplementary Data
 
 Item 9B. Other Information.
  
 PART III
 
 Item 10. Directors, Executive Officers and Corporate Governance.
  
 Item 11. Executive Compensation.
  
 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters.
    93




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Item 13. Certain Relationships and Related Transactions, and Director Independence.
  
 Item 14. Principal Accountant Fees and Services.
  
 PART IV
 
 Item 15. Exhibits and Financial Statement Schedules.
  Financial Statements
  Financial Statement Schedules
  Exhibits
      94




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SIGNATURES
  Education Realty Trust, Inc.By:
    /s/ Paul O. BowerPaul O. BowerPresident, Chief Executive Officer
and Chairman of the Board of Directors   Signature
    
    Date/s/ Paul O. Bower
    
    March 16, 2009Paul O. BowerPresident, Chief Executive Officer andChairman of the Board of Directors(Principal Executive Officer)/s/ Randall H. Brown
    
    March 16, 2009Randall H. BrownExecutive Vice President, Chief
Financial Officer, Treasurer and
Secretary (Principal Financial Officer)/s/ J. Drew Koester
    
    March 16, 2009J. Drew KoesterVice President , Assistant Secretary andChief Accounting Officer(Principal Accounting Officer)/s/ Monte J. Barrow
    
    March 16, 2009Monte J. BarrowDirector/s/ William J. Cahill, III
    
    March 16, 2009William J. Cahill, IIIDirector/s/ John L. Ford
    
    March 16, 2009John L. FordDirector/s/ Wendell W. Weakley
    
    March 16, 2009Wendell W. WeakleyDirector
  95




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INDEX TO EXHIBITS
 ExhibitNumber
    
    Description3.1
    
    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
    
    Amended and Restated Bylaws of Education Realty Trust, Inc. (Incorporated by reference to
Exhibit 3.2 to the Companys Current Report on Form 8-K, filed on February 20, 2009.)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.)10.1
    
    Amended and Restated Agreement of Limited Partnership of Education Realty Operating Partnership,
LP., filed herewith.10.2
    
    First Amendment to the Amended and Restated Agreement of Limited Partnership of Education Realty
Operating Partnership, LP. (Incorporated by reference to Exhibit 10.2 to the Companys Quarterly
Report on Form 10-Q, filed on August 1, 2008).10.3
    
    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.)10.4(1)
    
    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.)10.5
    
    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.)10.6(1)
    
    Amended and Restated Executive Employment Agreement between Education Realty Trust, Inc. and Paul O.
Bower, dated as of October 29, 2008. (Incorporated by reference to Exhibit 10.1 to the Companys
Quarterly Report on Form 10-Q, filed on November 4, 2008.)10.7(1)
    
    Amended and Restated Executive Employment Agreement between Education Realty Trust, Inc. and Randall
H. Brown, dated as of October 29, 2008. (Incorporated by reference to Exhibit 10.2 to the Companys
Quarterly Report on Form 10-Q, filed on November 4, 2008.)10.8(1)
    
    Amended and Restated Executive Employment Agreement between Education Realty Trust, Inc. and William
W. Harris, dated as of October 29, 2008. (Incorporated by reference to Exhibit 10.6 to the Companys
Quarter Report on Form 10-Q, filed on November 4, 2008.)10.9 (1)
    
    Amended and Restated Executive Employment Agreement between Education Realty Trust, Inc. and Thomas
Trubiana, dated as of October 29, 2008, filed herewith.
  96




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ExhibitNumber
    
    Description10.10 (1)
    
    Executive Employment Agreement between Education Realty Trust, Inc. and J. Drew Koester, dated as of
October 29, 2008. (Incorporated by reference to Exhibit 10.7 to the Companys Quarterly Report on
Form 10-Q, filed on November 4, 2008.)10.11(1)
    
    Amended and Restated Executive Employment Agreement between Education Realty Trust, Inc. and Thomas
J. Hickey, dated as of October 29, 2008. (Incorporated by reference to Exhibit 10.5 to the Companys
Quarterly Report on Form 10-Q, filed on November 4, 2008.)10.12(1)
    
    Amended and Restated Employment Agreement between Education Realty Trust, Inc. and Craig L.
Cardwell, dated as of October 29, 2008. (Incorporated by reference to Exhibit 10.3 to the Companys
Quarterly Report on Form 10-Q, filed on November 4, 2008.)10.13
    
    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.)10.14
    
    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.)10.15
    
    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.)10.16
    
    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.)10.17
    
    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.)10.18
    
    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.)10.19
    
    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.)
  97




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ExhibitNumber
    
    Description10.20
    
    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.)10.21
    
    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.)10.22
    
    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.)10.23
    
    Second Amendment to Contribution Agreement, dated January 6, 2006, by and between Place Properties,
L.P., Place Mezz Borrower, LLC and Education Realty Operating Partnership, LP (Filed as Exhibit 10.1
to the Companys Current Report on Form 8-K dated January 12, 2006 and incorporated herein by
reference).10.24
    
    Required Repair Escrow Agreement, dated as of January 1, 2006, by and between Place Properties,
L.P., Place Mezz Borrower, LLC, Education Realty Operating Partnership, LP and Chicago Title
Insurance Company (Filed as Exhibit 10.2 to the Companys Current Report on Form 8-K dated
January 12, 2006 and incorporated herein by reference).10.25
    
    Lease Agreement, dated as of January 1, 2006, by and between Education Realty Operating Partnership,
LP and Place Portfolio Lessee, LLC (Filed as Exhibit 10.3 to the Companys Current Report on Form
8-K dated January 12, 2006 and incorporated herein by reference).10.26
    
    Consent, Ratification, Assumption and Release Agreement made effective as of January 6, 2006, by and
among Cape Place (DE), LLC, Martin Place (DE), LLC, Clayton Place (DE), LLC, Macon Place (DE), LLC,
River Place (DE), LLC, Jacksonville Place (DE), LLC, Clemson Place (DE), LLC, Troy Place (DE), LLC,
Murray Place (DE), LLC, EDR Lease Holdings, LLC, Cecil M. Philips, Place Properties, L.P., Education
Realty Operating Partnership, LP, and LaSalle Bank, National Association, as Trustee (Filed as
Exhibit 10.1 to the Companys Current Report on Form 8-K/A dated January 25, 2006 and incorporated
herein by reference).10.27
    
    Loan and Security Agreement dated as of December 3, 2004, between Cape Place (DE), LLC; Clayton
Place (DE), LLC; Clemson Place (DE), LLC; Jacksonville Place (DE), LLC; Macon Place (DE), LLC;
Martin Place (DE), LLC; Murray Place (DE), LLC; River Place (DE), LLC; and Troy Place (DE), LLC and
Greenwich Capital Financial Products, Inc. (Filed as Exhibit 10.2 to the Companys Current Report on
Form 8-K/A dated January 25, 2006 and incorporated herein by reference).10.28
    
    Promissory Note, dated December 3, 2004, between Cape Place (DE), LLC, Clayton Place (DE), LLC,
Clemson Place (DE), LLC, Jacksonville Place (DE), LLC, Macon Place (DE), LLC, Martin Place (DE),
LLC, Murray Place (DE), LLC, River Place (DE), LLC, Troy Place (DE), LLC and Greenwich Capital
Financial Products, Inc. (Filed as Exhibit 10.3 to the Companys Current Report on Form 8-K/A dated
January 25, 2006 and incorporated herein by reference).
  98




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ExhibitNumber
    
    Description10.29
    
    Exceptions to Non-Recourse Guaranty dated as of January 6, 2006, by Education Realty Operating
Partnership, LP for the benefit of LaSalle Bank, National Association (Filed as Exhibit 10.4 to the
Companys Current Report on Form 8-K/A dated January 25, 2006 and incorporated herein by reference).10.30
    
    Environmental Indemnity Agreement, dated January 6, 2006, by Cape Place (DE), LLC, Clayton Place
(DE), LLC, Clemson Place (DE), LLC, Jacksonville Place (DE), LLC, Macon Place (DE), LLC, Martin
Place (DE), LLC, Murray Place (DE), LLC, River Place (DE), LLC, Troy Place (DE), LLC, and EDR Lease
Holdings, LLC and EDR Clemson Place Limited Partnership and Education Realty Operating Partnership,
LP in favor of LaSalle Bank, National Association (Filed as Exhibit 10.5 to the Companys Current
Report on Form 8-K/A dated January 25, 2006 and incorporated herein by reference).10.31
    
    Credit Agreement dated as of March 30, 2006 among Education Realty Operating Partnership, L.P., as
borrower, the lenders party thereto and KeyBank, National Association as administrative agent (Filed
as Exhibit 10.1 to the Companys Current Report on Form 8-K dated April 6, 2006 and incorporated
herein by reference).10.32
    
    Amended and Restated Credit Agreement dated as of March 30, 2006 among Education Realty Operating
Partnership, L.P., and certain of its subsidiaries as borrowers, the lenders party thereto and
KeyBank, National Association as administrative agent (Filed as Exhibit 10.2 to the Companys
Current Report on Form 8-K dated April 6, 2006 and incorporated herein by reference).10.33(1)
    
    Incentive Compensation Plan for Executive Officers (filed as exhibit 10.1 to the Companys Current
Report on Form 8-K dated May 30, 2006 and incorporated herein by reference).10.34(1)
    
    Form of Restricted Stock Award Agreement (filed as Exhibit 10.1 to the Companys Current Report on
Form 8-K filed on August 17, 2006 and incorporated herein by reference).10. 35
    
    Master Credit Facility Agreement, dated as of December 31, 2008, by and among Education Realty
Trust, Inc., Education Realty Operating Partnership, LP and certain subsidiaries, and Red Mortgage
Capital Inc., filed herewith.10.36(1)
    
    Schedule of 2008 Annual Incentive Compensation Payouts and 2009 Base Salaries for Named Executive
Officers, filed herewith.11
    
    Statement Regarding Computation of Per Share Earnings (included within Annual Report on Form 10-K).14
    
    Code of Business Conduct and Ethics, filed herewith.21.1
    
    List of Subsidiaries of the Registrant.23.1
    
    Consent of Independent Registered Public Accounting Firm, Deloitte & Touche LLP.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.
  99