##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 (Mark One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
 For the quarterly period ended June 30, 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
(I.R.S. Employer Identification No.)530 Oak Court Drive, Suite 300, Memphis, Tennessee
(Address of principal executive offices)
    
    38117
(Zip Code)
  Not Applicable
 þ o
  Large accelerated filer oAccelerated filer þNon-accelerated filer o(Do not check if a smaller reporting company)Smaller reporting company o o þ




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##### 



EDUCATION REALTY TRUST, INC.
FORM 10-Q
QUARTER ENDED JUNE 30, 2008
TABLE OF CONTENTS
 PagePART IFINANCIAL INFORMATION
    
    
    3Item 1. Financial Statements
    
    
    3Condensed Consolidated Balance Sheets of Education Realty Trust, Inc. and Subsidiaries as of
June 30, 2008 and December 31, 2007
    
    
    3Condensed Consolidated Statements of Operations of Education Realty Trust, Inc. and
Subsidiaries for the six months ended June 30, 2008 and 2007
    
    
    4Condensed Consolidated Statements of Operations of Education Realty Trust, Inc. and
Subsidiaries for the three months ended June 30, 2008 and 2007
    
    
    5Condensed Consolidated Statements of Cash Flows of Education Realty Trust, Inc. and
Subsidiaries for the six months ended June 30, 2008 and 2007
    
    
    6Notes to Condensed Consolidated Financial Statements
    
    
    8Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    22Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    40Item 4. Controls and Procedures
    
    
    41PART II  OTHER INFORMATION
    
    
    41Item 1. Legal Proceedings
    
    
    41Item 1A. Risk Factors
    
    
    41Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    42Item 3. Defaults Upon Senior Securities
    
    
    42Item 4. Submission of Matters to a Vote of Security Holders
    
    
    42Item 5. Other Information
    
    
    42Item 6. Exhibits
    
    
    42Signatures
    
    
    43EX-10.1 AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENTEX-10.2 AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIPEX-31.1 SECTION 302 CERTIFICATION OF THE CEOEX-31.2 SECTION 302 CERTIFICATION OF THE CFOEX-32.1 SECTION 906 CERTIFICATION OF THE CEOEX-32.2 SECTION 906 CERTIFICATION OF THE CFO
  2




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##### Table of Contents



Part I  Financial Information
 
 Item 1.
    
    Financial Statements.
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 June 30, 2008
    
    
    December 31, 2007(Unaudited)ASSETSAssets:Student housing properties, net
    
    $
    718,108
    
    
    $
    732,979Assets under development
    
    
    17,084
    
    
    
    5,675Corporate office furniture, net
    
    
    1,583
    
    
    
    1,693Cash and cash equivalents
    
    
    27,322
    
    
    
    4,034Restricted cash
    
    
    8,977
    
    
    
    8,188Student contracts receivable, net
    
    
    701
    
    
    
    329Receivable from affiliate
    
    
    30
    
    
    
    18Management fee receivable from third party
    
    
    683
    
    
    
    606Goodwill and other intangibles, net
    
    
    3,518
    
    
    
    3,531Other assets
    
    
    10,618
    
    
    
    10,407Total assets
    
    $
    788,624
    
    
    $
    767,460LIABILITIES AND STOCKHOLDERS EQUITYLiabilities:Mortgage and construction loans, net of unamortized premium/discount
    
    $
    425,623
    
    
    $
    420,940Revolving line of credit
    
    
    34,700
    
    
    
    11,500Accounts payable and accrued expenses
    
    
    12,368
    
    
    
    11,092Accounts payable affiliate
    
    
    120
    
    
    
    60Deferred revenue
    
    
    8,247
    
    
    
    7,928Total liabilities
    
    
    481,058
    
    
    
    451,520Minority interest
    
    
    16,808
    
    
    
    18,121Commitments and contingencies (see Note 6)
    
    
    
    
    
    
    Stockholders equity:Common stock, $.01 par value, 200,000,000 shares authorized,
28,457,849 and 28,431,855 shares issued and outstanding at June 30,
2008 and December 31, 2007, respectively
    
    
    285
    
    
    
    284Preferred shares, $0.01 par value, 50,000,000 shares authorized, no
shares issued and outstanding
    
    
    
    
    
    
    Additional paid-in capital
    
    
    319,700
    
    
    
    330,969Accumulated deficit
    
    
    (29,227
    )
    
    
    (33,434
    )Total stockholders equity
    
    
    290,758
    
    
    
    297,819Total liabilities and stockholders equity
    
    $
    788,624
    
    
    $
    767,460
 See accompanying notes to the condensed consolidated financial statements.
 3




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##### Table of Contents



CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 Six months
    
    
    Six monthsended
    
    
    endedJune 30,
    
    
    June 30,2008
    
    
    2007Revenues:Student housing leasing revenue
    
    $
    53,158
    
    
    $
    43,003Student housing food service revenue
    
    
    1,196
    
    
    
    1,102Other leasing revenue
    
    
    6,945
    
    
    
    6,868Third-party development services
    
    
    3,008
    
    
    
    2,067Third-party management services
    
    
    1,807
    
    
    
    1,603Operating expense reimbursements
    
    
    5,140
    
    
    
    4,383Total revenues
    
    
    71,254
    
    
    
    59,026Operating expenses:Student housing leasing operations
    
    
    25,231
    
    
    
    18,424Student housing food service operations
    
    
    1,128
    
    
    
    1,072General and administrative
    
    
    7,850
    
    
    
    7,050Depreciation and amortization
    
    
    14,817
    
    
    
    16,004Reimbursable operating expenses
    
    
    5,140
    
    
    
    4,383Total operating expenses
    
    
    54,166
    
    
    
    46,933Operating income
    
    
    17,088
    
    
    
    12,093Nonoperating expenses:Interest expense
    
    
    12,213
    
    
    
    14,386Amortization of deferred financing costs
    
    
    487
    
    
    
    548Loss on early repayment of debt
    
    
    
    
    
    
    174Interest income
    
    
    (190
    )
    
    
    (251
    )Total nonoperating expenses
    
    
    12,510
    
    
    
    14,857Income (loss) before equity in earnings (losses) of unconsolidated entities,
income taxes, minority interest and discontinued operations
    
    
    4,578
    
    
    
    (2,764
    )Equity in earnings (losses) of unconsolidated entities
    
    
    (27
    )
    
    
    2Income (loss) before income taxes, minority interest and discontinued operations
    
    
    4,551
    
    
    
    (2,762
    )Income tax expense (benefit)
    
    
    173
    
    
    
    (49
    )Net income (loss) before minority interest and discontinued operations
    
    
    4,378
    
    
    
    (2,713
    )Minority interest
    
    
    171
    
    
    
    (4
    )Income (loss) from continuing operations
    
    
    4,207
    
    
    
    (2,709
    )Discontinued operations:Income from discontinued operations, net of minority interest of $35
    
    
    
    
    
    
    833Gain on sale of student housing property, net of minority interest of $65
    
    
    
    
    
    
    1,579Income from discontinued operations
    
    
    
    
    
    
    2,412Net income (loss)
    
    $
    4,207
    
    
    $
    (297
    )Earnings per share informationIncome (loss) per share  basic:Continuing operations
    
    $
    0.15
    
    
    $
    (0.10
    )Discontinued operations
    
    
    
    
    
    
    0.09Net income (loss) per share
    
    $
    0.15
    
    
    $
    (0.01
    )Income (loss) per share  diluted:Continuing operations
    
    $
    0.14
    
    
    $
    (0.10
    )Discontinued operations
    
    
    
    
    
    
    0.09Net income (loss) per share
    
    $
    0.14
    
    
    $
    (0.01
    )Weighted average common shares outstanding  basic
    
    
    28,444,497
    
    
    
    27,592,873Weighted average common shares outstanding  diluted
    
    
    29,589,932
    
    
    
    27,592,873Distributions per common share
    
    $
    0.410
    
    
    $
    0.410
 See accompanying notes to the condensed consolidated financial statements.
 4




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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 Three months
    
    
    Three monthsended
    
    
    endedJune 30,
    
    
    June 30,2008
    
    
    2007Revenues:Student housing leasing revenue
    
    $
    26,805
    
    
    $
    21,031Student housing food service revenue
    
    
    541
    
    
    
    522Other leasing revenue
    
    
    5,000
    
    
    
    3,434Third-party development services
    
    
    1,221
    
    
    
    1,024Third-party management services
    
    
    832
    
    
    
    721Operating expense reimbursements
    
    
    2,521
    
    
    
    2,227Total revenues
    
    
    36,920
    
    
    
    28,959Operating expenses:Student housing leasing operations
    
    
    13,146
    
    
    
    9,402Student housing food service operations
    
    
    495
    
    
    
    511General and administrative
    
    
    3,913
    
    
    
    3,560Depreciation and amortization
    
    
    7,224
    
    
    
    7,924Reimbursable operating expenses
    
    
    2,521
    
    
    
    2,227Total operating expenses
    
    
    27,299
    
    
    
    23,624Operating income
    
    
    9,621
    
    
    
    5,335Nonoperating expenses:Interest expense
    
    
    6,049
    
    
    
    6,999Amortization of deferred financing costs
    
    
    244
    
    
    
    268Loss on early repayment of debt
    
    
    
    
    
    
    174Interest income
    
    
    (72
    )
    
    
    (167
    )Total nonoperating expenses
    
    
    6,221
    
    
    
    7,274Income (loss) before equity in earnings (losses) of unconsolidated entities,
income taxes, minority interest and discontinued operations
    
    
    3,400
    
    
    
    (1,939
    )Equity in earnings (losses) of unconsolidated entities
    
    
    (26
    )
    
    
    (41
    )Income (loss) before income taxes, minority interest and discontinued operations
    
    
    3,374
    
    
    
    (1,980
    )Income tax benefit
    
    
    (18
    )
    
    
    (47
    )Net income (loss) before minority interest and discontinued operations
    
    
    3,392
    
    
    
    (1,933
    )Minority interest
    
    
    74
    
    
    
    (123
    )Income from continuing operations
    
    
    3,318
    
    
    
    (1,810
    )Discontinued operations:Income from discontinued operations, net of minority interest of $18
    
    
    
    
    
    
    425Gain on sale of student housing property, net of minority interest of $65
    
    
    
    
    
    
    1,579Income from discontinued operations
    
    
    
    
    
    
    2,004Net income
    
    $
    3,318
    
    
    $
    194Earnings per share informationIncome (loss) per share  basic:Continuing operations
    
    $
    0.12
    
    
    $
    (0.06
    )Discontinued operations
    
    
    
    
    
    
    0.07Net income per share
    
    $
    0.12
    
    
    $
    0.01Income (loss) per share  diluted:Continuing operations
    
    $
    0.11
    
    
    $
    (0.06
    )Discontinued operations
    
    
    
    
    
    
    0.07Net income per share
    
    $
    0.11
    
    
    $
    0.01Weighted average common shares outstanding  basic
    
    
    28,450,730
    
    
    
    28,012,275Weighted average common shares outstanding  diluted
    
    
    29,571,724
    
    
    
    28,012,275Distributions per common share
    
    $
    0.205
    
    
    $
    0.205
 See accompanying notes to the condensed consolidated financial statements.
 5




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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 Six months
    
    
    Six monthsended
    
    
    endedJune 30,
    
    
    June 30,2008
    
    
    2007Operating activities:Net income (loss)
    
    $
    4,207
    
    
    $
    (297
    )Adjustments to reconcile net income (loss) to net cash provided by operating activities:Depreciation and amortization
    
    
    14,817
    
    
    
    16,004Depreciation included in discontinued operations
    
    
    
    
    
    
    711Deferred taxes
    
    
    (379
    )
    
    
    (346
    )Loss on disposal of assets
    
    
    525
    
    
    
    Gain on sale of student housing property
    
    
    
    
    
    
    (1,644
    )Loss on early repayment of debt
    
    
    
    
    
    
    138Amortization of deferred financing costs
    
    
    487
    
    
    
    548Amortization of unamortized debt premiums/discounts
    
    
    (263
    )
    
    
    (230
    )Distributions of earnings from unconsolidated entities
    
    
    124
    
    
    
    188Noncash compensation expense related to PIUs and restricted stock
    
    
    396
    
    
    
    394Equity in earnings of unconsolidated entities
    
    
    27
    
    
    
    (2
    )Minority interest in continuing operations
    
    
    171
    
    
    
    (4
    )Minority interest in discontinued operations
    
    
    
    
    
    
    101Change in operating assets and liabilities (net of student housing
acquisitions/disposals)
    
    
    1,388
    
    
    
    (2,536
    )Net cash provided by operating activities
    
    
    21,500
    
    
    
    13,025Investing activities:Purchase of corporate furniture and fixtures
    
    
    (143
    )
    
    
    (750
    )Restricted cash
    
    
    (789
    )
    
    
    1,024Investment in student housing properties
    
    
    (3,954
    )
    
    
    (2,784
    )Proceeds from sale of assets
    
    
    2,578
    
    
    
    Proceeds from sale of student housing properties
    
    
    
    
    
    
    48,942Investment in assets under development
    
    
    (11,409
    )
    
    
    (1,946
    )Investment in joint ventures
    
    
    (169
    )
    
    
    (62
    )Net cash provided by (used in) investing activities
    
    
    (13,886
    )
    
    
    44,424Financing activities:Payment of mortgage notes
    
    
    (24,766
    )
    
    
    (58,305
    )Borrowings of mortgage notes and construction loan
    
    
    29,712
    
    
    
    57,800Repayment of term loan
    
    
    
    
    
    
    (47,000
    )Borrowing (repayment) of line of credit, net
    
    
    23,200
    
    
    
    (22,400
    )Debt issuance costs
    
    
    (198
    )
    
    
    (549
    )Proceeds from issuance of common stock
    
    
    
    
    
    
    22,474Dividends and distributions paid
    
    
    (12,274
    )
    
    
    (11,815
    )Net cash provided by (used in) financing activities
    
    
    15,674
    
    
    
    (59,795
    )Net increase (decrease) in cash and cash equivalents
    
    
    23,288
    
    
    
    (2,346
    )Cash and cash equivalents, beginning of period
    
    
    4,034
    
    
    
    6,427Cash and cash equivalents, end of period
    
    $
    27,322
    
    
    $
    4,081
 See accompanying notes to the condensed consolidated financial statements.
 6




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##### Table of Contents



Six months
    
    
    Six monthsended
    
    
    endedJune 30,
    
    
    June 30,2008
    
    
    2007Supplemental disclosure of cash flow information:Interest paid
    
    $
    12,878
    
    
    $
    14,509Income taxes paid
    
    $
    70
    
    
    $
    479Supplemental disclosure of noncash activities:Warrants expired
    
    $
    
    
    
    $
    375Redemption of minority interest from unit holder
    
    
    893
    
    
    
    Common stock issued under the dividend reinvestment plan
    
    
    
    
    
    
    78
 See accompanying notes to the condensed consolidated financial statements.
 7




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NOTES TO CONDENSED 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
    Interim financial information
  8




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Use of estimates
  Cash and cash equivalents
  Restricted cash
  Distributions
  Student housing properties
  Business
Combinations,
 Accounting for
the Impairment and Disposal of Long-lived Assets.
 9




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##### Table of Contents



Repairs, maintenance and major improvements
  Investment in unconsolidated joint ventures, limited liability companies and limited partnerships
  Deferred financing costs
  Issuance costs
  Debt premiums/discounts
  Income taxes
  10




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Accounting for Income Taxes,
 Accounting for Uncertainty in Income Taxes
 Earnings per share
 Earnings Per Share.
 Three months
    
    Six monthsended June 30,
    
    ended June 30,2008
    
    2008Basic weighted average commons shares outstanding
    
    
    28,450,730
    
    
    
    28,444,497Operating Partnership units
    
    
    913,737
    
    
    
    913,737University Towers Operating Partnership units
    
    
    207,257
    
    
    
    231,698Diluted weighted average common shares outstanding
    
    
    29,571,724
    
    
    
    29,589,932
  Goodwill and other intangible assets
 Goodwill and
Other Intangible Assets.
 Minority interests
  11




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Comprehensive Income
 Reporting Comprehensive Income
 Revenue recognition
  Student housing leasing revenue
 Student housing food service revenue
 Other leasing revenue
 Third-party development services revenue
 Third-party management services revenue
 Operating expense reimbursements Income Statement Characterization of Reimbursements Received for Out of Pocket
Expenses Incurred.
 12




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Recently adopted accounting pronouncements
 Fair
Value Measurements .
 The Fair Value Option for Financial Assets and
Financial Liabilities ,
 Recently issued accounting pronouncements
 Business Combinations
 Noncontrolling Interests in Consolidated Financial
Statementsan amendment of Accounting Research Bulletin No. 51
 Disclosures about Derivative Instruments and Hedging
Activitiesan amendment of FASB Statement No. 133 Accounting for Derivative
Instruments and Hedging Activities
 Determination of the Useful
Life of Intangible Assets Goodwill and Other Intangible Assets.
 13




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Determining
Whether Instruments Granted in Share-Based Payment Transactions are Participating Securities Earnings Per Share.
 3. Investments in unconsolidated entities
  
    
    University Village-Greensboro LLC, a Delaware limited liability company, 25% owned by the Operating Partnership
    
    WEDR Riverside Investors V, LLC, a Delaware limited liability company, 10% owned by the Operating Partnership
    
    APF EDR, LP, a Delaware limited partnership, 10% owned by the Operating Partnership
    
    APF EDR Food Services, LP, a Delaware limited partnership, 10% owned by the Operating Partnership
    
    WEDR Stinson Investors V, LLC, a Delaware limited liability company, 10% owned by the Operating Partnership
  2008
    
    2007Results of Operations:Revenues
    
    $
    8,283
    
    
    $
    6,245Net loss
    
    
    (614
    )
    
    
    (1,567
    )Equity in earnings (losses) of unconsolidated entities
    
    $
    (27
    )
    
    $
    2
  4. Debt
 Revolving credit facility
   14




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Mortgage and construction debt
    Fiscal Year Ending2008 (6 months ending December 31, 2008)
    
    $
    1,7162009
    
    
    285,0492010
    
    
    9312011
    
    
    1,0352012
    
    
    69,895Thereafter
    
    
    65,587Total
    
    
    424,213Unamortized debt premium/discounts
    
    
    1,410Outstanding at June 30, 2008, net of unamortized premiums/discounts
    
    $
    425,623
  5. Segments
  15




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Six Months Ended June 30, 2008
    
    
    Six Months Ended June 30, 2007Third-Party
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Third-PartyStudent
    
    
    Development
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Student
    
    
    DevelopmentHousing
    
    
    Consulting
    
    
    Management
    
    
    
    
    
    
    
    
    
    
    Housing
    
    
    Consulting
    
    
    ManagementLeasing
    
    
    Services
    
    
    Services
    
    
    Adjustments
    
    
    Total
    
    
    Leasing
    
    
    Services
    
    
    Services
    
    
    Adjustments
    
    
    TotalRevenues:Student housing
leasing revenue
    
    $
    53,158
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    53,158
    
    
    $
    43,003
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    43,003Student housing
food service
revenue
    
    
    1,196
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,196
    
    
    
    1,102
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,102Other leasing
revenue
    
    
    6,945
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,945
    
    
    
    6,868
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,868Third-party
development
consulting
services
    
    
    
    
    
    
    3,008
    
    
    
    
    
    
    
    
    
    
    
    3,008
    
    
    
    
    
    
    
    2,067
    
    
    
    
    
    
    
    
    
    
    
    2,067Third-party
management
services
    
    
    
    
    
    
    
    
    
    
    1,807
    
    
    
    
    
    
    
    1,807
    
    
    
    
    
    
    
    
    
    
    
    1,603
    
    
    
    
    
    
    
    1,603Intersegment
revenues
    
    
    
    
    
    
    
    
    
    
    2,089
    
    
    
    (2,089
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,694
    
    
    
    (1,694
    )
    
    
    Operating expense
reimbursements
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,140
    
    
    
    5,140
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,383
    
    
    
    4,383Total revenues
    
    
    61,299
    
    
    
    3,008
    
    
    
    3,896
    
    
    
    3,051
    
    
    
    71,254
    
    
    
    50,973
    
    
    
    2,067
    
    
    
    3,297
    
    
    
    2,689
    
    
    
    59,026Operating expenses:Student housing
leasing operations
    
    
    25,231
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,231
    
    
    
    18,424
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18,424Student housing
food service
operations
    
    
    1,128
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,128
    
    
    
    1,072
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,072General and
administrative
    
    
    3
    
    
    
    1,454
    
    
    
    3,579
    
    
    
    
    
    
    
    5,036
    
    
    
    86
    
    
    
    1,271
    
    
    
    3,347
    
    
    
    
    
    
    
    4,704Intersegment
expenses
    
    
    2,089
    
    
    
    
    
    
    
    
    
    
    
    (2,089
    )
    
    
    
    
    
    
    1,694
    
    
    
    
    
    
    
    
    
    
    
    (1,694
    )
    
    
    Reimbursable
operating expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,140
    
    
    
    5,140
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,383
    
    
    
    4,383Total operating
expenses
    
    
    28,451
    
    
    
    1,454
    
    
    
    3,579
    
    
    
    3,051
    
    
    
    36,535
    
    
    
    21,276
    
    
    
    1,271
    
    
    
    3,347
    
    
    
    2,689
    
    
    
    28,583Net operating
income (loss)
    
    
    32,848
    
    
    
    1,554
    
    
    
    317
    
    
    
    
    
    
    
    34,719
    
    
    
    29,697
    
    
    
    796
    
    
    
    (50
    )
    
    
    
    
    
    
    30,443Nonoperating
expenses(1)
    
    
    26,898
    
    
    
    (41
    )
    
    
    
    
    
    
    
    
    
    
    26,857
    
    
    
    29,762
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    29,762Income (loss)
before equity in
earnings of
unconsolidated
entities, income
taxes, minority
interest and
discontinued
operations
    
    
    5,950
    
    
    
    1,595
    
    
    
    317
    
    
    
    
    
    
    
    7,862
    
    
    
    (65
    )
    
    
    796
    
    
    
    (50
    )
    
    
    
    
    
    
    681
 16




---



##### Table of Contents



Six Months Ended June 30, 2008
    
    
    Six Months Ended June 30, 2007Third-Party
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Third-PartyStudent
    
    
    Development
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Student
    
    
    DevelopmentHousing
    
    
    Consulting
    
    
    Management
    
    
    
    
    
    
    
    
    
    
    Housing
    
    
    Consulting
    
    
    ManagementLeasing
    
    
    Services
    
    
    Services
    
    
    Adjustments
    
    
    Total
    
    
    Leasing
    
    
    Services
    
    
    Services
    
    
    Adjustments
    
    
    TotalEquity in earnings
of unconsolidated
entities
    
    
    (26
    )
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    (27
    )
    
    
    (205
    )
    
    
    207
    
    
    
    
    
    
    
    
    
    
    
    2Income (loss)
before taxes,
minority interest
and discontinued
operations(2)
    
    $
    5,924
    
    
    $
    1,594
    
    
    $
    317
    
    
    $
    
    
    
    $
    7,835
    
    
    $
    (270
    )
    
    $
    1,003
    
    
    $
    (50
    )
    
    $
    
    
    
    $
    683Total segment
assets, as of June
30, 2008 and
December 31, 2007
    
    $
    754,600
    
    
    $
    3,246
    
    
    $
    5,686
    
    
    $
    
    
    
    $
    763,532
    
    
    $
    751,086
    
    
    $
    4,528
    
    
    $
    6,505
    
    
    $
    
    
    
    $
    762,119
 
 (1)
    
    Nonoperating expenses include interest expense, interest income, amortization of deferred financing costs, depreciation, and amortization of intangibles.(2)
    
    The following is a reconciliation of the reportable segments net income before income taxes, minority interest and discontinued operations to the
Trusts consolidated net income (loss) before income taxes, minority interest and discontinued operations: 2008
    
    
    2007Net income before income taxes, minority interest and discontinued operations for reportable segments
    
    $
    7,835
    
    
    $
    683Other unallocated corporate expenses
    
    
    (3,284
    )
    
    
    (3,445
    )Net income (loss) before income taxes, minority interest and discontinued operations
    
    $
    4,551
    
    
    $
    (2,762
    )
  Three Months Ended June 30, 2008
    
    
    Three Months Ended June 30, 2007Third-Party
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Third-PartyStudent
    
    
    Development
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Student
    
    
    DevelopmentHousing
    
    
    Consulting
    
    
    Management
    
    
    
    
    
    
    
    
    
    
    Housing
    
    
    Consulting
    
    
    ManagementLeasing
    
    
    Services
    
    
    Services
    
    
    Adjustments
    
    
    Total
    
    
    Leasing
    
    
    Services
    
    
    Services
    
    
    Adjustments
    
    
    TotalRevenues:Student housing
leasing revenue
    
    $
    26,806
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    26,806
    
    
    $
    21,031
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    21,031Student housing
food service
revenue
    
    
    541
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    541
    
    
    
    522
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    522Other leasing
revenue
    
    
    5,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,000
    
    
    
    3,434
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,434Third-party
development
consulting
services
    
    
    
    
    
    
    1,221
    
    
    
    
    
    
    
    
    
    
    
    1,221
    
    
    
    
    
    
    
    1,024
    
    
    
    
    
    
    
    
    
    
    
    1,024Third-party
management
services
    
    
    
    
    
    
    
    
    
    
    832
    
    
    
    
    
    
    
    832
    
    
    
    
    
    
    
    
    
    
    
    721
    
    
    
    
    
    
    
    721Intersegment
revenues
    
    
    
    
    
    
    
    
    
    
    1,047
    
    
    
    (1,047
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    816
    
    
    
    (816
    )
    
    
    Operating expense
reimbursements
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,521
    
    
    
    2,521
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,227
    
    
    
    2,227Total revenues
    
    
    32,347
    
    
    
    1,221
    
    
    
    1,879
    
    
    
    1,474
    
    
    
    36,921
    
    
    
    24,987
    
    
    
    1,024
    
    
    
    1,537
    
    
    
    1,411
    
    
    
    28,959Operating expenses:Student housing
leasing operations
    
    
    13,146
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,146
    
    
    
    9,402
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,402
 17




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##### Table of Contents



Three Months Ended June 30, 2008
    
    
    Three Months Ended June 30, 2007Third-Party
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Third-PartyStudent
    
    
    Development
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Student
    
    
    DevelopmentHousing
    
    
    Consulting
    
    
    Management
    
    
    
    
    
    
    
    
    
    
    Housing
    
    
    Consulting
    
    
    ManagementLeasing
    
    
    Services
    
    
    Services
    
    
    Adjustments
    
    
    Total
    
    
    Leasing
    
    
    Services
    
    
    Services
    
    
    Adjustments
    
    
    TotalStudent housing
food service
operations
    
    
    495
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    495
    
    
    
    511
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    511General and
administrative
    
    
    
    
    
    
    723
    
    
    
    1,781
    
    
    
    
    
    
    
    2,504
    
    
    
    43
    
    
    
    597
    
    
    
    1,468
    
    
    
    
    
    
    
    2,108Intersegment
expenses
    
    
    1,047
    
    
    
    
    
    
    
    
    
    
    
    (1,047
    )
    
    
    
    
    
    
    816
    
    
    
    
    
    
    
    
    
    
    
    (816
    )
    
    
    Reimbursable
operating expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,521
    
    
    
    2,521
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,227
    
    
    
    2,227Total operating
expenses
    
    
    14,688
    
    
    
    723
    
    
    
    1,781
    
    
    
    1,474
    
    
    
    18,666
    
    
    
    10,772
    
    
    
    597
    
    
    
    1,468
    
    
    
    1,411
    
    
    
    14,248Net operating
income (loss)
    
    
    17,659
    
    
    
    498
    
    
    
    98
    
    
    
    
    
    
    
    18,255
    
    
    
    14,215
    
    
    
    427
    
    
    
    69
    
    
    
    
    
    
    
    14,711Nonoperating
expenses(1)
    
    
    13,254
    
    
    
    (10
    )
    
    
    
    
    
    
    
    
    
    
    13,244
    
    
    
    14,603
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,603Income (loss)
before equity in
earnings of
unconsolidated
entities, income
taxes, minority
interest and
discontinued
operations
    
    
    4,405
    
    
    
    508
    
    
    
    98
    
    
    
    
    
    
    
    5,011
    
    
    
    (388
    )
    
    
    427
    
    
    
    69
    
    
    
    
    
    
    
    108Equity in earnings
of unconsolidated
entities
    
    
    (26
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (26
    )
    
    
    (108
    )
    
    
    67
    
    
    
    
    
    
    
    
    
    
    
    (41
    )Income (loss)
before taxes,
minority interest
and discontinued
operations(2)
    
    $
    4,379
    
    
    $
    508
    
    
    $
    98
    
    
    $
    
    
    
    $
    4,985
    
    
    $
    (496
    )
    
    $
    494
    
    
    $
    69
    
    
    $
    
    
    
    $
    67
 
 (1)
    
    Nonoperating expenses include interest expense, interest income, amortization of deferred financing costs, depreciation, and amortization of intangibles.(2)
    
    The following is a reconciliation of the reportable segments net income before income taxes, minority interest and discontinued operations to the
Trusts consolidated net income (loss) before income taxes, minority interest and discontinued operations: 2008
    
    
    2007Net income before income taxes, minority interest and discontinued operations for reportable segments
    
    $
    4,985
    
    
    $
    67Other unallocated corporate expenses
    
    
    (1,611
    )
    
    
    (2,047
    )Net income (loss) before income taxes, minority interest and discontinued operations
    
    $
    3,374
    
    
    $
    (1,980
    )
 6. Commitments and contingencies
   18




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##### Table of Contents



7. Acquisition of real estate investments
  19




---



##### Table of Contents



8. Disposition of real estate investments and discontinued operations
   2007Student housing leasing revenue
    
    $
    2,692Student housing leasing operating expenses
    
    
    (1,113
    )Depreciation and amortization
    
    
    (711
    )Minority interest
    
    
    (35
    )Income from discontinued operations (net of minority interest)
    
    $
    833Gain on sale of student housing property
    
    $
    1,644Minority interest
    
    
    (65
    )Gain on sale of student housing property (net of minority interest)
    
    $
    1,579
 9. Incentive plan
    20




---



##### Table of Contents



StockPIUs
    
    
    Awards (1)
    
    
    TotalOutstanding at December 31, 2007
    
    
    277,500
    
    
    
    200,000
    
    
    
    477,500Granted
    
    
    2,500
    
    
    
    4,000
    
    
    
    6,500Forfeited
    
    
    (2,500
    )
    
    
    
    
    
    
    (2,500
    )Outstanding at March 31, 2008
    
    
    277,500
    
    
    
    204,000
    
    
    
    481,500Granted
    
    
    
    
    
    
    4,000
    
    
    
    4,000Forfeited
    
    
    (2,500
    )
    
    
    
    
    
    
    (2,500
    )Outstanding at June 30, 2008
    
    
    275,000
    
    
    
    208,000
    
    
    
    483,000Vested at June 30, 2008
    
    
    275,000
    
    
    
    150,883
    
    
    
    425,883
 
 (1)
    
    Includes restricted stock awards.  10. Subsequent events
  21




---



##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
  The following discussion should be read in conjunction with the financial statements and notes
thereto appearing elsewhere in this Quarterly Report. Certain statements contained in this filing
are forward-looking statements within the meaning of the Private Securities Litigation Reform Act
of 1995, including but not limited to statements related to plans for future acquisitions, our
business and investment strategy, market trends and projected capital expenditures. When used in
this report, the words expect, anticipate, intend, plan, believe, seek, estimate,
would, could, should, and similar expressions are generally intended to identify
forward-looking statements. You should not place undue reliance on these forward-looking
statements, which reflect our opinions only as of the date of this Quarterly Report. We assume no
obligation to update or supplement forward-looking statements that become untrue because of
subsequent events. Forward-looking statements are subject to risks, uncertainties and other factors
that could cause actual results to differ materially from future results expressed or implied by
such forward-looking statements. For further information about these and other factors that could
affect our future results, please see the Item 1A.  Risk Factors in our Annual Report on Form
10-K for the year ended December 31, 2007 as amended. Investors are cautioned that any
forward-looking statements are not guarantees of future performance and involve risks and
uncertainties, and that actual results may differ materially from those contemplated by such
forward-looking statements.
 Overview
   Our Business Segments
  Student Housing Leasing
   22




---



##### Table of Contents



Management Services
  Third-Party Development Consulting Services
   23




---



##### Table of Contents



Trends and Outlook
 Rents and Occupancy
   General and Administrative Costs
  Termination of Lease with Place Properties, Inc.
  Critical Accounting Policies
  24




---



##### Table of Contents



Student Housing Leasing Revenue Recognition
   Student Housing Food Service Revenue Recognition
  Other Leasing Revenue Recognition
  Revenue and Cost Recognition of Third-Party Development Consulting Services
  25




---



##### Table of Contents



Student Housing Property Acquisitions and Dispositions
  Business Combinations
 Accounting for the Impairment and Disposal of Long Lived Assets
 Repairs and Maintenance
  Long Lived Assets  Impairment
 .
 26




---



##### Table of Contents



Recently Issued Accounting Pronouncements
   Accounting for Derivative Instruments and Hedging
Activities
 Goodwill and Other Intangible Assets.
 Earnings Per Share.
 27




---



##### Table of Contents



Results of Operations for the Six Months Ended June 30, 2008 and 2007
  Six Months Ended June 30, 2008
    
    
    Six Months Ended June 30, 2007Third-Party
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Third-PartyStudent
    
    
    Development
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Student
    
    
    DevelopmentHousing
    
    
    Consulting
    
    
    Management
    
    
    
    
    
    
    
    
    
    
    Housing
    
    
    Consulting
    
    
    ManagementLeasing
    
    
    Services
    
    
    Services
    
    
    Adjustments
    
    
    Total
    
    
    Leasing
    
    
    Services
    
    
    Services
    
    
    Adjustments
    
    
    TotalRevenues:Student housing
leasing revenue
    
    $
    53,158
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    53,158
    
    
    $
    43,003
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    43,003Student housing
food service
revenue
    
    
    1,196
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,196
    
    
    
    1,102
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,102Other leasing
revenue
    
    
    6,945
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,945
    
    
    
    6,868
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,868Third-party
development
consulting
services
    
    
    
    
    
    
    3,008
    
    
    
    
    
    
    
    
    
    
    
    3,008
    
    
    
    
    
    
    
    2,067
    
    
    
    
    
    
    
    
    
    
    
    2,067Third-party
management
services
    
    
    
    
    
    
    
    
    
    
    1,807
    
    
    
    
    
    
    
    1,807
    
    
    
    
    
    
    
    
    
    
    
    1,603
    
    
    
    
    
    
    
    1,603Intersegment
revenues
    
    
    
    
    
    
    
    
    
    
    2,089
    
    
    
    (2,089
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,694
    
    
    
    (1,694
    )
    
    
    Operating expense
reimbursements
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,140
    
    
    
    5,140
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,383
    
    
    
    4,383Total revenues
    
    
    61,299
    
    
    
    3,008
    
    
    
    3,896
    
    
    
    3,051
    
    
    
    71,254
    
    
    
    50,973
    
    
    
    2,067
    
    
    
    3,297
    
    
    
    2,689
    
    
    
    59,026Operating expenses:Student housing
leasing operations
    
    
    25,231
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,231
    
    
    
    18,424
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18,424Student housing
food service
operations
    
    
    1,128
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,128
    
    
    
    1,072
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,072General and
administrative
    
    
    3
    
    
    
    1,454
    
    
    
    3,579
    
    
    
    
    
    
    
    5,036
    
    
    
    86
    
    
    
    1,271
    
    
    
    3,347
    
    
    
    
    
    
    
    4,704Intersegment
expenses
    
    
    2,089
    
    
    
    
    
    
    
    
    
    
    
    (2,089
    )
    
    
    
    
    
    
    1,694
    
    
    
    
    
    
    
    
    
    
    
    (1,694
    )
    
    
    Reimbursable
operating expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,140
    
    
    
    5,140
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,383
    
    
    
    4,383Total operating
expenses
    
    
    28,451
    
    
    
    1,454
    
    
    
    3,579
    
    
    
    3,051
    
    
    
    36,535
    
    
    
    21,276
    
    
    
    1,271
    
    
    
    3,347
    
    
    
    2,689
    
    
    
    28,583Net operating
income (loss)
    
    
    32,848
    
    
    
    1,554
    
    
    
    317
    
    
    
    
    
    
    
    34,719
    
    
    
    29,697
    
    
    
    796
    
    
    
    (50
    )
    
    
    
    
    
    
    30,443Nonoperating
expenses(1)
    
    
    26,898
    
    
    
    (41
    )
    
    
    
    
    
    
    
    
    
    
    26,857
    
    
    
    29,762
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    29,762Income (loss)
before equity in
earnings of
unconsolidated
entities, income
taxes, minority
interest and
discontinued
operations
    
    
    5,950
    
    
    
    1,595
    
    
    
    317
    
    
    
    
    
    
    
    7,862
    
    
    
    (65
    )
    
    
    796
    
    
    
    (50
    )
    
    
    
    
    
    
    681Equity in earnings
of unconsolidated
entities
    
    
    (26
    )
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    (27
    )
    
    
    (205
    )
    
    
    207
    
    
    
    
    
    
    
    
    
    
    
    2Income (loss)
before taxes,
minority interest
and discontinued
operations(2)
    
    $
    5,924
    
    
    $
    1,594
    
    
    $
    317
    
    
    $
    
    
    
    $
    7,835
    
    
    $
    (270
    )
    
    $
    1,003
    
    
    $
    (50
    )
    
    $
    
    
    
    $
    683
 28




---



##### Table of Contents



(1)
    
    Nonoperating expenses include interest expense, interest income, amortization of deferred financing costs, depreciation and amortization of intangibles.(2)
    
    The following is a reconciliation of the reportable segments net income before income taxes, minority interest and discontinued operations to EDRs consolidated net income (loss) before income taxes, minority interest and discontinued operations
determined under generally accepted accounting principles: 2008
    
    
    2007Net income before taxes, minority interest and discontinued operations for reportable segments
    
    
    7,835
    
    
    
    683Other unallocated corporate expenses
    
    
    (3,284
    )
    
    
    (3,445
    )Net income (loss) before taxes, minority interest and discontinued operations
    
    $
    4,551
    
    
    $
    (2,762
    )
 Student housing leasing
  Six months
    
    
    Six monthsended
    
    
    endedJune 30,
    
    
    June 30,2008
    
    
    2007(9)
    
    
    DifferenceOccupancyPhysical (1)
    
    
    90.9
    %
    
    
    93.1
    %
    
    
    -2.2
    %Economic (2)
    
    
    92.7
    %
    
    
    95.4
    %
    
    
    -2.7
    %NARPAB (3)
    
    $
    357
    
    
    $
    362
    
    
    $
    (5
    )Other income per avail. bed (4)
    
    $
    20
    
    
    $
    24
    
    
    $
    (4
    )RevPAB (5)
    
    $
    377
    
    
    $
    386
    
    
    $
    (9
    )Operating expense per bed (6) (7)
    
    $
    175
    
    
    $
    165
    
    
    $
    10Operating margin (7)
    
    
    53.5
    %
    
    
    57.2
    %
    
    
    -3.7
    %Design Beds (8)
    
    
    140,894
    
    
    
    111,426
    
    
    
    29,468
 
 (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 potential 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 GAAP-based other 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/application fees, late
fees, termination fees, parking fees, transfer fees, damage recovery, utility recovery and other
miscellaneous income.(5)
    
    RevPAB represents total revenue (net apartment rent plus other income) for the respective period
divided by the sum of the design beds for each of the included months.(6)
    
    Represents property-level operating expenses excluding management fees and depreciation and
amortization divided by the sum of the design beds for each of the included months.(7)
    
    For the six months ended June 30, 2008, approximately $4 per bed related to the loss on the sale of
land and the parking garage at University Towers (see Note 8 in the condensed consolidated financial
statements) is excluded. The loss of $512 is included in the statement of operations in the condensed
consolidated financial statements. 29




---



##### Table of Contents



(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 the six months
ended June 30, 2008 due to the termination of the lease with Place (see Note 2 in the condensed
consolidated financial statements).(9)
    
    This information excludes property information related to Tharpe (discontinued operations).      30




---



##### Table of Contents



Third-party development consulting services
  Recognized EarningsProject
    
    Beds
    
    
    Fee Type
    
    
    2008
    
    
    2007
    
    
    DifferenceSlippery Rock University 
Phase I
    
    
    1,390
    
    
    Development fee
    
    $
    
    
    
    $
    38
    
    
    $
    (38
    )Indiana University of
Pennsylvania Phase I
    
    
    734
    
    
    Development fee
    
    
    
    
    
    
    634
    
    
    
    (634
    )University of Michigan
    
    
    896
    
    
    Development fee
    
    
    170
    
    
    
    133
    
    
    
    37University of North Carolina
 Greensboro
    
    
    600
    
    
    Construction oversight fee
    
    
    
    
    
    
    46
    
    
    
    (46
    )University of Alabama 
Tuscaloosa
    
    
    631
    
    
    Development fee
    
    
    670
    
    
    
    875
    
    
    
    (205
    )Slippery Rock University 
Phase II
    
    
    746
    
    
    Development fee
    
    
    504
    
    
    
    232
    
    
    
    272Indiana University of
Pennsylvania  Phase II
    
    
    1,102
    
    
    Development fee
    
    
    975
    
    
    
    109
    
    
    
    866Fontainebleu Renovation Project
    
    
    435
    
    
    Development fee
    
    
    52
    
    
    
    
    
    
    
    52West Chester Phase I
    
    
    1,197
    
    
    Development fee
    
    
    497
    
    
    
    
    
    
    
    497Indiana University of
Pennsylvania  Phase III
    
    
    1,084
    
    
    Development fee
    
    
    140
    
    
    
    
    
    
    
    140Third-party development
consulting services
    
    
    
    
    
    
    
    
    
    $
    3,008
    
    
    $
    2,067
    
    
    $
    941California University of
Pennsylvania  Phase V
    
    
    356
    
    
    Development fee
    
    
    (1
    )
    
    
    110
    
    
    
    (111
    )University of North Carolina
 Greensboro
    
    
    600
    
    
    Development fee
    
    
    
    
    
    
    105
    
    
    
    (105
    )University of Louisville 
Phase III
    
    
    359
    
    
    Development fee
    
    
    
    
    
    
    (8
    )
    
    
    8Equity in earnings of
unconsolidated entities
    
    
    
    
    
    
    
    
    
    $
    (1
    )
    
    $
    207
    
    
    $
    (208
    )
    31




---



##### Table of Contents



Management services
   Unallocated corporate expenses
  Results of Operations for the Three Months Ended June 30, 2008 and 2007
  Three Months Ended June 30, 2008
    
    
    Three Months Ended June 30, 2007Third-Party
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Third-PartyStudent
    
    
    Development
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Student
    
    
    DevelopmentHousing
    
    
    Consulting
    
    
    Management
    
    
    
    
    
    
    
    
    
    
    Housing
    
    
    Consulting
    
    
    ManagementLeasing
    
    
    Services
    
    
    Services
    
    
    Adjustments
    
    
    Total
    
    
    Leasing
    
    
    Services
    
    
    Services
    
    
    Adjustments
    
    
    TotalRevenues:Student housing
leasing revenue
    
    $
    26,806
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    26,806
    
    
    $
    21,031
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    21,031Student housing
food service
revenue
    
    
    541
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    541
    
    
    
    522
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    522Other leasing
revenue
    
    
    5,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,000
    
    
    
    3,434
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,434Third-party
development
consulting
services
    
    
    
    
    
    
    1,221
    
    
    
    
    
    
    
    
    
    
    
    1,221
    
    
    
    
    
    
    
    1,024
    
    
    
    
    
    
    
    
    
    
    
    1,024Third-party
management
services
    
    
    
    
    
    
    
    
    
    
    832
    
    
    
    
    
    
    
    832
    
    
    
    
    
    
    
    
    
    
    
    721
    
    
    
    
    
    
    
    721Intersegment
revenues
    
    
    
    
    
    
    
    
    
    
    1,047
    
    
    
    (1,047
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    816
    
    
    
    (816
    )
    
    
    Operating expense
reimbursements
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,521
    
    
    
    2,521
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,227
    
    
    
    2,227
 32




---



##### Table of Contents



Three Months Ended June 30, 2008
    
    
    Three Months Ended June 30, 2007Third-Party
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Third-PartyStudent
    
    
    Development
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Student
    
    
    DevelopmentHousing
    
    
    Consulting
    
    
    Management
    
    
    
    
    
    
    
    
    
    
    Housing
    
    
    Consulting
    
    
    ManagementLeasing
    
    
    Services
    
    
    Services
    
    
    Adjustments
    
    
    Total
    
    
    Leasing
    
    
    Services
    
    
    Services
    
    
    Adjustments
    
    
    TotalTotal revenues
    
    
    32,347
    
    
    
    1,221
    
    
    
    1,879
    
    
    
    1,474
    
    
    
    36,921
    
    
    
    24,987
    
    
    
    1,024
    
    
    
    1,537
    
    
    
    1,411
    
    
    
    28,959Operating expenses:Student housing
leasing operations
    
    
    13,146
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,146
    
    
    
    9,402
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,402Student housing
food service
operations
    
    
    495
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    495
    
    
    
    511
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    511General and
administrative
    
    
    
    
    
    
    723
    
    
    
    1,781
    
    
    
    
    
    
    
    2,504
    
    
    
    43
    
    
    
    597
    
    
    
    1,468
    
    
    
    
    
    
    
    2,108Intersegment
expenses
    
    
    1,047
    
    
    
    
    
    
    
    
    
    
    
    (1,047
    )
    
    
    
    
    
    
    816
    
    
    
    
    
    
    
    
    
    
    
    (816
    )
    
    
    Reimbursable
operating expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,521
    
    
    
    2,521
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,227
    
    
    
    2,227Total operating
expenses
    
    
    14,688
    
    
    
    723
    
    
    
    1,781
    
    
    
    1,474
    
    
    
    18,666
    
    
    
    10,772
    
    
    
    597
    
    
    
    1,468
    
    
    
    1,411
    
    
    
    14,248Net operating
income (loss)
    
    
    17,659
    
    
    
    498
    
    
    
    98
    
    
    
    
    
    
    
    18,255
    
    
    
    14,215
    
    
    
    427
    
    
    
    69
    
    
    
    
    
    
    
    14,711Nonoperating
expenses(1)
    
    
    13,254
    
    
    
    (10
    )
    
    
    
    
    
    
    
    
    
    
    13,244
    
    
    
    14,603
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,603Income (loss)
before equity in
earnings of
unconsolidated
entities, income
taxes, minority
interest and
discontinued
operations
    
    
    4,405
    
    
    
    508
    
    
    
    98
    
    
    
    
    
    
    
    5,011
    
    
    
    (388
    )
    
    
    427
    
    
    
    69
    
    
    
    
    
    
    
    108Equity in earnings
of unconsolidated
entities
    
    
    (26
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (26
    )
    
    
    (108
    )
    
    
    67
    
    
    
    
    
    
    
    
    
    
    
    (41
    )Income (loss)
before taxes,
minority interest
and discontinued
operations(2)
    
    $
    4,379
    
    
    $
    508
    
    
    $
    98
    
    
    $
    
    
    
    $
    4,985
    
    
    $
    (496
    )
    
    $
    494
    
    
    $
    69
    
    
    $
    
    
    
    $
    67
 
 (1)
    
    Nonoperating expenses include interest expense, interest income, amortization of deferred financing costs, depreciation and amortization of intangibles.(2)
    
    The following is a reconciliation of the reportable segments net income before income taxes, minority interest and discontinued operations to EDRs consolidated net income (loss) before income taxes, minority interest and discontinued operations
determined under generally accepted accounting principles: 2008
    
    
    2007Net income before taxes, minority interest and discontinued operations for reportable segments
    
    
    4,985
    
    
    
    67Other unallocated corporate expenses
    
    
    (1,611
    )
    
    
    (2,047
    )Net income (loss) before taxes, minority interest and discontinued operations
    
    $
    3,374
    
    
    $
    (1,980
    )
 33




---



##### Table of Contents



Student housing leasing
  Three months
    
    Three monthsended
    
    endedJune 30,
    
    June 30,2008
    
    2007(8)
    
    DifferenceOccupancyPhysical (1)
    
    
    88.5
    %
    
    
    91.0
    %
    
    
    -2.5
    %Economic (2)
    
    
    91.6
    %
    
    
    94.9
    %
    
    
    -3.3
    %NARPAB (3)
    
    $
    344
    
    
    $
    350
    
    
    $
    (6
    )Other income per avail. bed (4)
    
    $
    21
    
    
    $
    27
    
    
    $
    (6
    )RevPAB (5)
    
    $
    365
    
    
    $
    377
    
    
    $
    (12
    )Operating expense per bed (6)
    
    $
    179
    
    
    $
    169
    
    
    $
    10Operating margin
    
    
    51.0
    %
    
    
    55.3
    %
    
    
    -4.3
    %Design Beds (7)
    
    
    73,393
    
    
    
    55,713
    
    
    
    17,680
 
 (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 potential 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 GAAP-based other 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/application fees, late
fees, termination fees, parking fees, transfer fees, damage recovery, utility recovery and other
miscellaneous income.(5)
    
    RevPAB represents total revenue (net apartment rent plus other income) for the respective period
divided by the sum of the design beds for each of the included months.(6)
    
    Represents property-level operating expenses excluding management fees and 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. As of February 1,
2008, the design beds related to the Place Portfolio were included in the total for the three months
ended June 30, 2008 due to the termination of the lease with Place Properties (see Note 2 in the
condensed consolidated financial statements).(8)
    
    This information excludes property information related to Tharpe (discontinued operations).   34




---



##### Table of Contents



Third-party development consulting services
     Management services
  35




---



##### Table of Contents



Unallocated corporate expenses
  Funds from Operations (FFO)
    36




---



##### Table of Contents



Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Net income (loss)
    
    $
    3,318
    
    
    $
    194
    
    
    $
    4,207
    
    
    $
    (297
    )Less gain on sale of student housing
property, net of minority interest
    
    
    
    
    
    
    (1,579
    )
    
    
    
    
    
    
    (1,579
    )Plus loss on sale of student housing assets
    
    
    
    
    
    
    
    
    
    
    512
    
    
    
    Plus student housing property depreciation
and amortization of lease intangibles
    
    
    7,094
    
    
    
    7,811
    
    
    
    14,545
    
    
    
    15,809Plus equity portion of real estate
depreciation and amortization on equity
investees
    
    
    123
    
    
    
    92
    
    
    
    248
    
    
    
    190Plus depreciation and amortization of
discontinued operations
    
    
    
    
    
    
    242
    
    
    
    
    
    
    
    711Plus minority interest
    
    
    74
    
    
    
    (105
    )
    
    
    171
    
    
    
    31Funds from operations
    
    $
    10,609
    
    
    $
    6,655
    
    
    $
    19,683
    
    
    $
    14,865
 Liquidity and Capital Resources
 Revolving credit facility and other indebtedness
      Liquidity outlook and capital requirements
  37




---



##### Table of Contents



Predevelopment expenditures
   38




---



##### Table of Contents



Long-term liquidity requirements
    Commitments and Contractual obligations
  Less than
    
    
    1-3
    
    
    3-5
    
    
    After 51 Year
    
    
    Years
    
    
    Years
    
    
    Years
    
    
    TotalCommitments and Contractual
Obligations:Long-Term Debt Obligations(1)
    
    $
    1,716
    
    
    $
    285,980
    
    
    $
    70,930
    
    
    $
    65,587
    
    
    $
    424,213Contractual Interest Obligations(2)
    
    
    15,838
    
    
    
    27,377
    
    
    
    13,039
    
    
    
    3,694
    
    
    
    59,948Operating Lease and Future
Purchase Obligations (3)
    
    
    1,680
    
    
    
    6,047
    
    
    
    949
    
    
    
    461
    
    
    
    9,137Capital Reserve Obligations(4)
    
    
    1,404
    
    
    
    2,395
    
    
    
    421
    
    
    
    182
    
    
    
    4,402Total
    
    $
    20,638
    
    
    $
    321,799
    
    
    $
    85,339
    
    
    $
    69,924
    
    
    $
    497,700
 
 (1)
    
    Includes required monthly principal amortization and amounts due at maturity on first mortgage debt secured by student
housing properties. The first mortgage debt does not include $1,410 of unamortized debt premium.(2)
    
    Includes contractual 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.   39




---



##### Table of Contents



Distributions
   Off-Balance Sheet Arrangements
  Inflation
  
 Item 3.
    
    Quantitative and Qualitative Disclosures about Market Risk.
    40




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##### Table of Contents



Item 4.
    
    Controls and Procedures.
 Managements Evaluation of Disclosure Controls and Procedures
   Changes in Internal Control Over Financial Reporting
  
 PART II
 OTHER INFORMATION
 
 Item 1.
    
    Legal Proceedings
  
 Item 1A.
    
    Risk factors
  41




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##### Table of Contents



Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
  
 Item 3.
    
    Defaults upon Senior Securities.
  
 Item 4.
    
    Submission of Matters to a Vote of Security Holders.
  Proposal 1
  For
    
    
    WithheldPaul O. Bower
    
    
    23,787,946.64
    
    
    
    546,251.62Monte J. Barrow
    
    
    23,964,390.64
    
    
    
    387,807.62William J. Cahill, III
    
    
    23,957,148.24
    
    
    
    395,050.03John L. Ford
    
    
    23,965,979.64
    
    
    
    386,218.62Wendell W. Weakley
    
    
    23,964,212.64
    
    
    
    387,985.62
 Proposal 2:
  For
    
    Against
    
    Broker Non-Votes24,291,349.68
    
    37,974.59
    
    0
 
 Item 5.
    
    Other Information.
  
 Item 6.
    
    Exhibits.
  42




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##### Table of Contents



SIGNATURES
  EDUCATION REALTY TRUST, INC.Date: July 31, 2008
    By
    
    /s/ Paul O. BowerPaul O. BowerPresident, Chief Executive Officer and
Chairman of the Board of Directors
(Principal Executive Officer)Date: July 31, 2008
    By
    

    /s/ Randall H. BrownRandall H. BrownExecutive Vice President, Chief Financial
Officer, Treasurer and Secretary
(Principal Financial Officer)Date: July 31, 2008
    By
    
    /s/ J. Drew KoesterJ. Drew KoesterVice President and Chief Accounting Officer
(Principal Accounting Officer) 43




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##### Table of Contents



EXHIBIT INDEX
 3.1
    
    
    Second Articles of Amendment and Restatement of Education Realty
Trust, Inc. (Incorporated by reference to Exhibit 3.1 to the Trusts
Amendment No. 2 to its Registration Statement on Form S-11 (File No.
333-119264), filed on December 10, 2004.)3.2
    
    
    Bylaws of Education Realty Trust, Inc. (Incorporated by reference to
Exhibit 3.2 to the Trusts Registration Statement on Form S-11 (File
No. 333-119264), filed on September 24, 2004.)4.1
    
    
    Form of Certificate for Common Stock of Education Realty Trust, Inc.
(Incorporated by reference to Exhibit 4.1 to the Trusts Amendment
No. 5 to its Registration Statement on Form S-11 (File No.
333-119264), filed on January 24, 2005.)4.2
    
    
    Form of Registration Rights Agreement dated January 31, 2005, by and
among Education Realty Trust, Inc., Education Realty Operating
Partnership, LP, JPI Investment Company, L.P. and the unit holders
whose names are set forth on the signature pages thereto.
(Incorporated by reference to Exhibit 4.3 to the Trusts
Registration Statement on Form S-11 (File No. 333-119264), filed on
September 24, 2004.)10.1
    
    
    First Amendment to the Amended and Restated Limited Liability
Company Agreement of Education Realty Limited Partner, LLC, dated
June 11, 2008.10.2
    
    
    First Amendment to the Amended and Restated Agreement of Limited
Partnership of Education Realty Operating Partnership, LP, dated
June 11, 2008.31.1
    
    
    Certification of Chief Executive Officer pursuant to Rule 13a-14(a)
of the Securities Exchange Act, as amended.31.2
    
    
    Certification of Chief Financial Officer pursuant to Rule 13a-14(a)
of the Securities Exchange Act, as amended.32.1*
    
    
    Section 906 Certification of Chief Executive Officer32.2*
    
    
    Section 906 Certification of Chief Financial Officer
 
 *
    
    In accordance with Release No. 34-47986, this Exhibit is hereby
furnished to the SEC as an accompanying document and is not deemed
filed for purposes of Section 18 of the Securities Exchange Act of
1934 or otherwise subject to the liabilities of that Section, nor
shall it be deemed incorporated by reference into any filing under the
Securities Act of 1933. 44