##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2007
 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)
 (Registrants telephone number, including area code): (901)259-2500
 þ o
  o þ o
 o þ




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##### 



EDUCATION REALTY TRUST, INC.
FORM 10-Q
QUARTER ENDED JUNE 30, 2007
TABLE OF CONTENTS
 PagePART
I  FINANCIAL INFORMATIONItem 1. Financial Statements
    
    
    2Condensed Consolidated Balance Sheets of Education Realty Trust, Inc. and Subsidiaries as of
June 30, 2007 and December 31, 2006
    
    
    2Condensed Consolidated Statements of Operations of Education Realty Trust, Inc. and
Subsidiaries for the six months ended June 30, 2007 and 2006
    
    
    3Condensed Consolidated Statements of Operations of Education Realty Trust, Inc. and
Subsidiaries for the three months ended June 30, 2007 and 2006
    
    
    4Condensed Consolidated Statements of Cash Flows of Education Realty Trust, Inc. and
Subsidiaries for the six months ended June 30, 2007 and 2006
    
    
    5Notes to Condensed Consolidated Financial Statements
    
    
    7Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    19Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    34Item 4. Controls and Procedures
    
    
    34PART II  OTHER INFORMATION
    
    
    35Item 1. Legal Proceedings
    
    
    35Item 1A. Risk Factors
    
    
    35Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    35Item 3. Defaults Upon Senior Securities
    
    
    35Item 4. Submission of Matters to a Vote of Security Holders
    
    
    35Item 5. Other Information
    
    
    35Item 6. Exhibits
    
    
    35Signatures
    
    
    36EX-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
  1




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##### Table of Contents



Part I  Financial Information
 
 Item 1. Financial Statements.
 EDUCATION REALTY TRUST, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 June 30, 2007
    
    
    December 31, 2006(Unaudited)AssetsStudent housing properties, net
    
    $
    743,293
    
    
    $
    804,759Assets under development
    
    
    1,941
    
    
    
    Corporate office furniture, net
    
    
    1,324
    
    
    
    752Cash and cash equivalents
    
    
    4,081
    
    
    
    6,427Restricted cash
    
    
    8,130
    
    
    
    9,154Student contracts receivable, net
    
    
    432
    
    
    
    227Receivable from affiliate
    
    
    357
    
    
    
    369Management fee receivable from third party
    
    
    304
    
    
    
    669Goodwill and other intangibles, net
    
    
    3,567
    
    
    
    3,649Other assets
    
    
    11,006
    
    
    
    9,452Total assets
    
    $
    774,435
    
    
    $
    835,458Liabilities and stockholders equityLiabilities:Mortgage loans, net of unamortized premium/discount
    
    $
    423,146
    
    
    $
    423,933Term loan
    
    
    
    
    
    
    47,000Revolving line of credit
    
    
    
    
    
    
    22,400Accounts payable and accrued expenses
    
    
    10,092
    
    
    
    10,764Deferred revenue
    
    
    8,001
    
    
    
    9,073Total liabilities
    
    
    441,239
    
    
    
    513,170Minority interest
    
    
    18,812
    
    
    
    19,289Commitments and contingencies
    
    
    
    
    
    
    Stockholders equity:Common stock, $.01 par value, 200,000,000 shares
authorized, 28,413,849 and 26,810,552 shares
issued and outstanding at June 30, 2007 and
December 31, 2006, respectively
    
    
    284
    
    
    
    268Preferred shares, $0.01 par value, 50,000,000
shares authorized, no shares issued and
outstanding
    
    
    
    
    
    
    Additional paid-in capital
    
    
    342,415
    
    
    
    330,374Warrants
    
    
    
    
    
    
    375Accumulated deficit
    
    
    (28,315
    )
    
    
    (28,018
    )Total stockholders equity
    
    
    314,384
    
    
    
    302,999Total liabilities and stockholders equity
    
    $
    774,435
    
    
    $
    835,458
 See accompanying notes to the condensed consolidated financial statements.
 2




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##### Table of Contents



EDUCATION REALTY TRUST, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 Six months
    
    
    Six monthsended
    
    
    endedJune 30,
    
    
    June 30,2007
    
    
    2006Revenues:Student housing leasing revenue
    
    $
    43,003
    
    
    $
    40,557Student housing food service revenue
    
    
    1,102
    
    
    
    1,775Other leasing revenue
    
    
    6,868
    
    
    
    6,868Third-party development services
    
    
    2,067
    
    
    
    1,427Third-party management services
    
    
    1,603
    
    
    
    1,398Operating expense reimbursements
    
    
    4,383
    
    
    
    3,745Total revenues
    
    
    59,026
    
    
    
    55,770Operating expenses:Student housing leasing operations
    
    
    18,424
    
    
    
    17,362Student housing food service operations
    
    
    1,072
    
    
    
    1,583General and administrative
    
    
    7,050
    
    
    
    6,165Depreciation and amortization
    
    
    16,004
    
    
    
    17,224Reimbursable operating expenses
    
    
    4,383
    
    
    
    3,745Total operating expenses
    
    
    46,933
    
    
    
    46,079Operating income
    
    
    12,093
    
    
    
    9,691Nonoperating expenses:Interest expense
    
    
    14,386
    
    
    
    14,131Amortization of deferred financing costs
    
    
    548
    
    
    
    553Loss on early repayment of debt
    
    
    174
    
    
    
    Interest income
    
    
    (251
    )
    
    
    (338
    )Total nonoperating expenses
    
    
    14,857
    
    
    
    14,346Loss before equity in earnings of unconsolidated entities,
income taxes, minority interest and discontinued operations
    
    
    (2,764
    )
    
    
    (4,655
    )Equity in earnings of unconsolidated entities
    
    
    2
    
    
    
    425Loss before income taxes, minority interest and discontinued
operations
    
    
    (2,762
    )
    
    
    (4,230
    )Income tax expense (benefit)
    
    
    (49
    )
    
    
    82Net loss before minority interest and discontinued operations
    
    
    (2,713
    )
    
    
    (4,312
    )Minority interest
    
    
    (4
    )
    
    
    (114
    )Loss from continuing operations
    
    
    (2,709
    )
    
    
    (4,198
    )Discontinued operations:Income from discontinued operations, net of minority
interest of $135 and $49, respectively
    
    
    833
    
    
    
    904Gain on sale of student housing property, net of minority
interest of $65
    
    
    1,579
    
    
    
    Income from discontinued operations
    
    
    2,412
    
    
    
    904Net loss
    
    $
    (297
    )
    
    $
    (3,294
    )Earnings per share informationIncome (loss) per share  basic and diluted:Continuing operations
    
    $
    (0.10
    )
    
    $
    (0.16
    )Discontinued operations
    
    
    0.09
    
    
    
    0.03Net loss per share
    
    $
    (0.01
    )
    
    $
    (0.13
    )Weighted average common shares outstanding  basic and diluted
    
    
    27,592,873
    
    
    
    26,309,154Distributions per common share
    
    $
    0.4100
    
    
    $
    0.5950
 See accompanying notes to the condensed consolidated financial statements.
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EDUCATION REALTY TRUST, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 Three months
    
    
    Three monthsended
    
    
    endedJune 30,
    
    
    June 30,2007
    
    
    2006Revenues:Student housing leasing revenue
    
    $
    21,031
    
    
    $
    19,702Student housing food service revenue
    
    
    522
    
    
    
    807Other leasing revenue
    
    
    3,434
    
    
    
    3,434Third-party development services
    
    
    1,024
    
    
    
    872Third-party management services
    
    
    721
    
    
    
    699Operating expense reimbursements
    
    
    2,227
    
    
    
    1,950Total revenues
    
    
    28,959
    
    
    
    27,464Operating expenses:Student housing leasing operations
    
    
    9,402
    
    
    
    8,755Student housing food service operations
    
    
    511
    
    
    
    724General and administrative
    
    
    3,560
    
    
    
    3,185Depreciation and amortization
    
    
    7,924
    
    
    
    8,575Reimbursable operating expenses
    
    
    2,227
    
    
    
    1,950Total operating expenses
    
    
    23,624
    
    
    
    23,189Operating income
    
    
    5,335
    
    
    
    4,275Nonoperating expenses:Interest expense
    
    
    6,999
    
    
    
    7,261Amortization of deferred financing costs
    
    
    268
    
    
    
    279Loss on early repayment of debt
    
    
    174
    
    
    
    Interest income
    
    
    (167
    )
    
    
    (129
    )Total nonoperating expenses
    
    
    7,274
    
    
    
    7,411Loss before equity in earnings of unconsolidated entities,
income taxes, minority interest and discontinued operations
    
    
    (1,939
    )
    
    
    (3,136
    )Equity in earnings of unconsolidated entities
    
    
    (41
    )
    
    
    142Loss before income taxes, minority interest and discontinued
operations
    
    
    (1,980
    )
    
    
    (2,994
    )Income tax expense (benefit)
    
    
    (47
    )
    
    
    186Net loss before minority interest and discontinued operations
    
    
    (1,933
    )
    
    
    (3,180
    )Minority interest
    
    
    (123
    )
    
    
    (226
    )Loss from continuing operations
    
    
    (1,810
    )
    
    
    (2,954
    )Discontinued operations:Income from discontinued operations, net of minority
interest of $18 and $20, respectively
    
    
    425
    
    
    
    440Gain on sale of student housing property, net of minority
interest of $65
    
    
    1,579
    
    
    
    Income from discontinued operations
    
    
    2,004
    
    
    
    440Net income (loss)
    
    $
    194
    
    
    $
    (2,514
    )Earnings per share informationIncome (loss) per share  basic and diluted:Continuing operations
    
    $
    (0.06
    )
    
    $
    (0.11
    )Discontinued operations
    
    
    0.07
    
    
    
    0.01Net income (loss) per share
    
    $
    0.01
    
    
    $
    (0.10
    )Weighted average common shares outstanding  basic and diluted
    
    
    28,012,275
    
    
    
    26,349,426Distributions per common share
    
    $
    0.2050
    
    
    $
    0.2975
 See accompanying notes to the condensed consolidated financial statements.
 4




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EDUCATION REALTY TRUST, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 Six months
    
    
    Six monthsended
    
    
    endedJune 30,
    
    
    June 30,2007
    
    
    2006Operating activities:Net loss
    
    $
    (297
    )
    
    $
    (3,294
    )Adjustments to reconcile net loss to net cash provided by
operating activities:Depreciation and amortization
    
    
    16,004
    
    
    
    17,224Depreciation included in discontinued operations
    
    
    711
    
    
    
    1,016Deferred taxes
    
    
    (346
    )
    
    
    (34
    )Gain on disposal of assets
    
    
    
    
    
    
    (21
    )Gain on sale of student housing property
    
    
    (1,644
    )
    
    
    Loss on early repayment of debt
    
    
    138
    
    
    
    Amortization of deferred financing costs
    
    
    548
    
    
    
    553Amortization of unamortized debt premiums/discounts
    
    
    (230
    )
    
    
    (266
    )Distributions of earnings from unconsolidated entities
    
    
    188
    
    
    
    112Noncash compensation expense related to PIUs and
restricted stock
    
    
    394
    
    
    
    528Equity in earnings of unconsolidated entities
    
    
    (2
    )
    
    
    (425
    )Minority interest in continuing operations
    
    
    (4
    )
    
    
    (114
    )Minority interest in discontinued operations
    
    
    101
    
    
    
    49Change in operating assets and liabilities (net of
student housing acquisitions/disposals)
    
    
    (2,536
    )
    
    
    (1,820
    )Net cash provided by operating activities
    
    
    13,025
    
    
    
    13,508Investing activities:Property acquisitions, net of cash acquired
    
    
    
    
    
    
    (113,236
    )Deferred acquisition costs and earnest money deposits
    
    
    
    
    
    
    (100
    )Purchase of corporate furniture and fixtures
    
    
    (750
    )
    
    
    (39
    )Restricted cash
    
    
    1,024
    
    
    
    (411
    )Insurance proceeds on property loss
    
    
    
    
    
    
    135Investment in student housing properties
    
    
    (2,784
    )
    
    
    (1,712
    )Proceeds from sale of student housing property
    
    
    48,942
    
    
    
    Investment in assets under development
    
    
    (1,946
    )
    
    
    Investment in joint ventures
    
    
    (62
    )
    
    
    (1
    )Net cash provided by (used in) investing activities
    
    
    44,424
    
    
    
    (115,364
    )Financing activities:Payment of mortgage notes
    
    
    (58,305
    )
    
    
    (770
    )Borrowings of mortgage notes
    
    
    57,800
    
    
    
    Borrowing (repayment) of term loan
    
    
    (47,000
    )
    
    
    50,000Borrowing (repayment) of line of credit, net
    
    
    (22,400
    )
    
    
    14,500Debt issuance costs
    
    
    (549
    )
    
    
    (1,340
    )Proceeds (payments) from issuance of common stock
    
    
    22,474
    
    
    
    (125
    )Dividends and distributions paid
    
    
    (11,815
    )
    
    
    (16,816
    )Redemption of minority interest
    
    
    
    
    
    
    (8
    )Net cash provided by (used in) financing activities
    
    
    (59,795
    )
    
    
    45,441Net decrease in cash and cash equivalents
    
    
    (2,346
    )
    
    
    (56,415
    )Cash and cash equivalents, beginning of period
    
    
    6,427
    
    
    
    61,662Cash and cash equivalents, end of period
    
    $
    4,081
    
    
    $
    5,247
 See accompanying notes to the condensed consolidated financial statements.
 5




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Six months
    
    
    Six monthsended
    
    
    endedJune 30,
    
    
    June 30,2007
    
    
    2006Supplemental disclosure of cash flow information:Interest paid
    
    $
    14,509
    
    
    $
    14,302Income taxes paid
    
    $
    479
    
    
    $
    718Supplemental disclosure of noncash activities:Prepaid acquisition costs
    
    $
    
    
    
    $
    4,718Warrants expired
    
    
    375
    
    
    
    Redemption of minority interest to satisfy loan to unitholder
    
    
    
    
    
    
    6,116Common stock issued under the dividend reinvestment plan
    
    
    78
    
    
    
    
 See accompanying notes to the condensed consolidated financial statements
 6




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##### Table of Contents



EDUCATION REALTY TRUST, INC. AND SUBSIDIARIES
 
 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
    Reclassifications
  Interim financial information
  7




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##### Table of Contents



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.
  Repairs, maintenance, and major improvements
 8




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Investment in unconsolidated joint ventures, limited liability companies, and limited partnerships
  Deferred financing costs
  Issuance costs
  Debt premiums/discounts
  Income taxes
  Accounting for Income Taxes, w
 Earnings per share
 Earnings Per Share.
 Operating Partnership units
    
    
    913,738University Towers Operating Partnership units
    
    
    269,757Restricted Stock (unvested shares)
    
    
    93,117Profits Interest Units
    
    
    267,500Total potentially dilutive securities
    
    
    1,544,112
  9




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Goodwill and other intangible assets
 Goodwill
and Other Intangible Assets.
 Minority interests
  Comprehensive Income
  Revenue recognition
  Student housing leasing revenue
 Student housing food service revenue
 Other leasing revenue
 Third-party management services revenue
 Third-party development services revenue
 Operating expense reimbursements Income Statement Characterization of Reimbursements Received for Out of Pocket
Expenses Incurred.
 Recent accounting pronouncements
 Accounting for Uncertainty in
 10




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Income Taxes, an Interpretation of FASB Statement No. 109
 Fair Value Measurements .
 The Fair Value Option for Financial Assets
and Financial Liabilities ,
 3. Investments in unconsolidated entities
  
    
    University of Louisville Apartment Developers LLC, a Kentucky 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)
    
    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
  2007
    
    2006Results of Operations:Revenues
    
    $
    6,245
    
    
    $
    936Net income (loss)
    
    
    (1,567
    )
    
    
    849Equity in earnings of unconsolidated entities
    
    $
    2
    
    
    $
    425
  4. Debt
 Term loan and revolving credit facility
  11




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Mortgage debt
  Fiscal Year Ending2007 (6 months ended December 31, 2007)
    
    $
    1,8532008
    
    
    26,4812009
    
    
    285,0492010
    
    
    8882011
    
    
    947Thereafter
    
    
    105,902Total
    
    
    421,120Unamortized debt premium/discounts
    
    
    2,026Outstanding at June 30, 2007, net of unamortized premiums/discounts
    
    $
    423,146
  5. Segments
  12




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Six months ended June 30, 2007
    
    
    Six months ended June 30, 2006Third-Party
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Third-PartyStudent
    
    
    Development
    
    
    Third-Party
    
    
    
    
    
    
    
    
    
    
    Student
    
    
    Development
    
    
    Third-PartyHousing
    
    
    Consulting
    
    
    Management
    
    
    
    
    
    
    
    
    
    
    Housing
    
    
    Consulting
    
    
    ManagementLeasing
    
    
    Services
    
    
    Services
    
    
    Adjustments
    
    
    Total
    
    
    Leasing
    
    
    Services
    
    
    Services
    
    
    Adjustments
    
    
    TotalRevenues:Student housing leasing
revenue
    
    $
    43,003
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    43,003
    
    
    $
    40,557
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    40,557Student housing food
service revenue
    
    
    1,102
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,102
    
    
    
    1,775
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,775Other leasing revenue
    
    
    6,868
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,868
    
    
    
    6,868
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,868Third-party development
consulting services
    
    
    
    
    
    
    2,067
    
    
    
    
    
    
    
    
    
    
    
    2,067
    
    
    
    
    
    
    
    1,427
    
    
    
    
    
    
    
    
    
    
    
    1,427Third-party management
revenue
    
    
    
    
    
    
    
    
    
    
    1,603
    
    
    
    
    
    
    
    1,603
    
    
    
    
    
    
    
    
    
    
    
    1,398
    
    
    
    
    
    
    
    1,398Intersegment revenues
    
    
    
    
    
    
    
    
    
    
    1,694
    
    
    
    (1,694
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,656
    
    
    
    (1,656
    )
    
    
    Operating expense
reimbursements
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,383
    
    
    
    4,383
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,745
    
    
    
    3,745Total revenues
    
    
    50,973
    
    
    
    2,067
    
    
    
    3,297
    
    
    
    2,689
    
    
    
    59,026
    
    
    
    49,200
    
    
    
    1,427
    
    
    
    3,054
    
    
    
    2,089
    
    
    
    55,770Operating Expenses:Student housing leasing
operations
    
    
    18,424
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18,424
    
    
    
    17,362
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17,362Student housing food
service operations
    
    
    1,072
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,072
    
    
    
    1,583
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,583General and administrative
    
    
    86
    
    
    
    1,271
    
    
    
    3,347
    
    
    
    
    
    
    
    4,704
    
    
    
    4
    
    
    
    1,054
    
    
    
    2,512
    
    
    
    
    
    
    
    3,570Intersegment expenses
    
    
    1,694
    
    
    
    
    
    
    
    
    
    
    
    (1,694
    )
    
    
    
    
    
    
    1,656
    
    
    
    
    
    
    
    
    
    
    
    (1,656
    )
    
    
    Reimbursable operating
expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,383
    
    
    
    4,383
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,745
    
    
    
    3,745Total operating expenses
    
    
    21,276
    
    
    
    1,271
    
    
    
    3,347
    
    
    
    2,689
    
    
    
    28,583
    
    
    
    20,605
    
    
    
    1,054
    
    
    
    2,512
    
    
    
    2,089
    
    
    
    26,260Net operating income (loss)
    
    
    29,697
    
    
    
    796
    
    
    
    (50
    )
    
    
    
    
    
    
    30,443
    
    
    
    28,595
    
    
    
    373
    
    
    
    542
    
    
    
    
    
    
    
    29,510Nonoperating
expenses(1)
    
    
    29,762
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    29,762
    
    
    
    31,096
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    31,096
 13




---



##### Table of Contents



Six months ended June 30, 2007
    
    
    Six months ended June 30, 2006Third-Party
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Third-PartyStudent
    
    
    Development
    
    
    Third-Party
    
    
    
    
    
    
    
    
    
    
    Student
    
    
    Development
    
    
    Third-PartyHousing
    
    
    Consulting
    
    
    Management
    
    
    
    
    
    
    
    
    
    
    Housing
    
    
    Consulting
    
    
    ManagementLeasing
    
    
    Services
    
    
    Services
    
    
    Adjustments
    
    
    Total
    
    
    Leasing
    
    
    Services
    
    
    Services
    
    
    Adjustments
    
    
    TotalIncome (loss) before
equity in earnings of
unconsolidated entities,
income taxes, minority
interest and discontinued
operations
    
    
    (65
    )
    
    
    796
    
    
    
    (50
    )
    
    
    
    
    
    
    681
    
    
    
    (2,501
    )
    
    
    373
    
    
    
    542
    
    
    
    
    
    
    
    (1,586
    )Equity in earnings of
unconsolidated entities
    
    
    (205
    )
    
    
    207
    
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    
    
    
    
    425
    
    
    
    
    
    
    
    
    
    
    
    425Income (loss) before
taxes, minority interest
and discontinued
operations(3)
    
    $
    (270
    )
    
    $
    1,003
    
    
    $
    (50
    )
    
    $
    
    
    
    $
    683
    
    
    $
    (2,501
    )
    
    $
    798
    
    
    $
    542
    
    
    $
    
    
    
    $
    (1,161
    )Total segment assets, as
of June 30, 2007 and
December 31, 2006 (2)
    
    $
    758,771
    
    
    $
    2,994
    
    
    $
    6,572
    
    
    $
    
    
    
    $
    768,337
    
    
    $
    818,832
    
    
    $
    2,082
    
    
    $
    5,567
    
    
    $
    
    
    
    $
    826,481
 
 (1)
    
    Nonoperating expenses include interest expense, interest income, amortization of deferred financing costs, depreciation, and amortization of intangibles.(2)
    
    The significant decrease in segment assets related to student housing leasing from that presented at December 31, 2006 relates to the disposition of the
student housing property known as the Village on Tharpe as described in Note 8 and additional depreciation taken in the first six months of 2007. The
increase of $912 in segment assets related to third party development consulting services is due to an increase in development fee receivables for the
University of Alabama and Indiana University of Pennsylvania.(3)
    
    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 loss before income taxes, minority interest and discontinued operations: 2007
    
    
    2006Net income (loss) before income taxes, minority interest and discontinued
operations for reportable segments
    
    $
    683
    
    
    $
    (1,161
    )Other unallocated corporate expenses (4)
    
    
    (3,445
    )
    
    
    (3,069
    )Net loss before income taxes, minority interest and discontinued operations
    
    $
    (2,762
    )
    
    $
    (4,230
    )
 
 (4)
    
    Certain prior period amounts have been reclassified to conform to the current period
presentation. Interest expense of $1,700 related to borrowings on our revolving line
of credit that were used to acquire the Place Portfolio was previously an unallocated
corporate expense. This amount has been reclassified to the student housing leasing segment for the six months ended June 30, 2006. Additionally, noncash
compensation expense of $310 has been reclassified from an unallocated expense to the
applicable segment. 14




---



##### Table of Contents



Three months ended June 30, 2007
    
    
    Three months ended June 30, 2006Third-Party
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Third-PartyStudent
    
    
    Development
    
    
    Third-Party
    
    
    
    
    
    
    
    
    
    
    Student
    
    
    Development
    
    
    Third-PartyHousing
    
    
    Consulting
    
    
    Management
    
    
    
    
    
    
    
    
    
    
    Housing
    
    
    Consulting
    
    
    ManagementLeasing
    
    
    Services
    
    
    Services
    
    
    Adjustments
    
    
    Total
    
    
    Leasing
    
    
    Services
    
    
    Services
    
    
    Adjustments
    
    
    TotalRevenues:Student housing leasing revenue
    
    $
    21,031
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    21,031
    
    
    $
    19,702
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    19,702Student housing food service
revenue
    
    
    522
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    522
    
    
    
    807
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    807Other leasing revenue
    
    
    3,434
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,434
    
    
    
    3,434
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,434Third-party development
consulting services
    
    
    
    
    
    
    1,024
    
    
    
    
    
    
    
    
    
    
    
    1,024
    
    
    
    
    
    
    
    872
    
    
    
    
    
    
    
    
    
    
    
    872Third-party management revenue
    
    
    
    
    
    
    
    
    
    
    721
    
    
    
    
    
    
    
    721
    
    
    
    
    
    
    
    
    
    
    
    699
    
    
    
    
    
    
    
    699Intersegment revenues
    
    
    
    
    
    
    
    
    
    
    816
    
    
    
    (816
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    801
    
    
    
    (801
    )
    
    
    Operating expense
reimbursements
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,227
    
    
    
    2,227
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,950
    
    
    
    1,950Total revenues
    
    
    24,987
    
    
    
    1,0241,538
    
    
    
    1,537
    
    
    
    1,411
    
    
    
    28,959
    
    
    
    23,943
    
    
    
    872
    
    
    
    1,500
    
    
    
    1,149
    
    
    
    27,464Operating Expenses:Student housing leasing
operations
    
    
    9,402
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,402
    
    
    
    8,755
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,755Student housing food service
operations
    
    
    511
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    511
    
    
    
    724
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    724General and administrative
    
    
    43
    
    
    
    597
    
    
    
    1,468
    
    
    
    
    
    
    
    2,108
    
    
    
    4
    
    
    
    540
    
    
    
    1,218
    
    
    
    
    
    
    
    1,762Intersegment expenses
    
    
    816
    
    
    
    
    
    
    
    
    
    
    
    (816
    )
    
    
    
    
    
    
    801
    
    
    
    
    
    
    
    
    
    
    
    (801
    )
    
    
    Reimbursable operating expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,227
    
    
    
    2,227
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,950
    
    
    
    1,950Total operating expenses
    
    
    10,772
    
    
    
    597
    
    
    
    1,468
    
    
    
    1,411
    
    
    
    14,248
    
    
    
    10,284
    
    
    
    540
    
    
    
    1,218
    
    
    
    1,149
    
    
    
    13,191Net operating income (loss)
    
    
    14,215
    
    
    
    427
    
    
    
    69
    
    
    
    
    
    
    
    14,711
    
    
    
    13,659
    
    
    
    332
    
    
    
    282
    
    
    
    
    
    
    
    14,273Nonoperating
expenses(1)
    
    
    14,603
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,603
    
    
    
    15,629
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,629Income (loss) before equity in
earnings of unconsolidated
entities, income taxes,
minority interest and
discontinued operations
    
    
    (388
    )
    
    
    427
    
    
    
    69
    
    
    
    
    
    
    
    108
    
    
    
    (1,970
    )
    
    
    332
    
    
    
    282
    
    
    
    
    
    
    
    (1,356
    )
 15




---



##### Table of Contents



Three months ended June 30, 2007
    
    
    Three months ended June 30, 2006Third-Party
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Third-PartyStudent
    
    
    Development
    
    
    Third-Party
    
    
    
    
    
    
    
    
    
    
    Student
    
    
    Development
    
    
    Third-PartyHousing
    
    
    Consulting
    
    
    Management
    
    
    
    
    
    
    
    
    
    
    Housing
    
    
    Consulting
    
    
    ManagementLeasing
    
    
    Services
    
    
    Services
    
    
    Adjustments
    
    
    Total
    
    
    Leasing
    
    
    Services
    
    
    Services
    
    
    Adjustments
    
    
    TotalEquity in earnings of
unconsolidated entities
    
    
    (108
    )
    
    
    67
    
    
    
    
    
    
    
    
    
    
    
    (41
    )
    
    
    
    
    
    
    142
    
    
    
    
    
    
    
    
    
    
    
    142Income (loss) before taxes,
minority interest and
discontinued operations(2)
    
    $
    (496
    )
    
    $
    494
    
    
    $
    69
    
    
    $
    
    
    
    $
    67
    
    
    $
    (1,970
    )
    
    $
    474
    
    
    $
    282
    
    
    $
    
    
    
    $
    (1,214
    )
 
 (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 loss before income taxes, minority interest and discontinued operations: 2007
    
    
    2006Net loss before income taxes, minority interest and discontinued operations for
reportable segments
    
    $
    67
    
    
    $
    (1,214
    )Other unallocated corporate expenses (3)
    
    
    (2,047
    )
    
    
    (1,780
    )Net loss before income taxes, minority interest and discontinued operations
    
    $
    (1,980
    )
    
    $
    (2,994
    )
 
 (3)
    
    Certain prior period amounts have been reclassified to conform to the current period
presentation. Interest expense of $950 related to borrowings on our revolving line of credit
that were used to acquire the Place Portfolio was previously an unallocated corporate
expense. This amount has been reclassified to the student housing leasing segment
for the three months ended June 30, 2006. Additionally, non cash compensation expense of $74 has
been reclassified from an unallocated expense to the applicable segment. 6. Commitments and contingencies
       16




---



##### Table of Contents



7. Acquisition of real estate investments
   8. Disposition of real estate investments and discontinued operations
   2007
    
    
    2006Student housing leasing revenue
    
    $
    2,692
    
    
    $
    3,344Student housing leasing operating expenses
    
    
    (1,113
    )
    
    
    (1,375
    )Depreciation and amortization
    
    
    (711
    )
    
    
    (1,016
    )Minority interest in Operating Partnership
    
    
    (35
    )
    
    
    (49
    )Income from discontinued operations (net of minority interest)
    
    $
    833
    
    
    $
    904Gain 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
    
    
    $
    
 9. Incentive plan
    17




---



##### Table of Contents



Accounting for Stock Issued to Employees,
  RestrictedPIUs
    
    Stock
    
    TotalOutstanding at December 31, 2006
    
    
    265,000
    
    
    
    192,000
    
    
    
    457,000Granted
    
    
    7,500
    
    
    
    4,000
    
    
    
    11,500Redeemed
    
    
    (2,500
    )
    
    
    
    
    
    
    (2,500
    )Outstanding at March 31, 2007
    
    
    270,000
    
    
    
    196,000
    
    
    
    466,000Granted
    
    
    
    
    
    
    4,000
    
    
    
    4,000Redeemed
    
    
    (2,500
    )
    
    
    
    
    
    
    (2,500
    )Outstanding at June 30, 2007
    
    
    267,500
    
    
    
    200,000
    
    
    
    467,500Vested at June 30, 2007
    
    
    267,500
    
    
    
    106,883
    
    
    
    374,383
  10. Subsequent events
  18




---



##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
 (Dollars in thousands, except selected property information and share data)
 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, 2006. 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
    19




---



##### Table of Contents



Third-Party Management Services
  Third-Party Development Consulting Services
     Trends and Outlook
 Rents and Occupancy
   20




---



##### Table of Contents



General and Administrative Costs
  Critical Accounting Policies
  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
  21




---



##### Table of Contents



Student Housing Property Acquisitions and Dispositions
  Business Combinations,
  Repairs and Maintenance
  Long Lived Assets  Impairment
 Accounting for the Impairment and
Disposal of Long Lived Assets.
 Recently Issued Accounting Pronouncements
 Accounting for Uncertainty in Income Taxes, an Interpretation of FASB Statement No. 109
 22




---



##### Table of Contents



Fair Value Measurements .
 The Fair Value Option for Financial Assets
and Financial Liabilities
 Results of Operations for the Six Months Ended June 30, 2007 and 2006
  Six months ended June 30, 2007
    
    
    Six months ended June 30, 2006Third-Party
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Third-PartyStudent
    
    
    Development
    
    
    Third-Party
    
    
    
    
    
    
    
    
    
    
    Student
    
    
    Development
    
    
    Third-PartyHousing
    
    
    Consulting
    
    
    Management
    
    
    
    
    
    
    
    
    
    
    Housing
    
    
    Consulting
    
    
    ManagementLeasing
    
    
    Services
    
    
    Services
    
    
    Adjustments
    
    
    Total
    
    
    Leasing
    
    
    Services
    
    
    Services
    
    
    Adjustments
    
    
    TotalRevenues:Student housing leasing
revenue
    
    $
    43,003
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    43,003
    
    
    $
    40,557
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    40,557Student housing food
service revenue
    
    
    1,102
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,102
    
    
    
    1,775
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,775Other leasing revenue
    
    
    6,868
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,868
    
    
    
    6,868
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,868Third-party development
consulting services
    
    
    
    
    
    
    2,067
    
    
    
    
    
    
    
    
    
    
    
    2,067
    
    
    
    
    
    
    
    1,427
    
    
    
    
    
    
    
    
    
    
    
    1,427Third-party management
revenue
    
    
    
    
    
    
    
    
    
    
    1,603
    
    
    
    
    
    
    
    1,603
    
    
    
    
    
    
    
    
    
    
    
    1,398
    
    
    
    
    
    
    
    1,398Intersegment revenues
    
    
    
    
    
    
    
    
    
    
    1,694
    
    
    
    (1,694
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,656
    
    
    
    (1,656
    )
    
    
    Operating expense
reimbursements
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,383
    
    
    
    4,383
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,745
    
    
    
    3,745Total revenues
    
    
    50,973
    
    
    
    2,067
    
    
    
    3,297
    
    
    
    2,689
    
    
    
    59,026
    
    
    
    49,200
    
    
    
    1,427
    
    
    
    3,054
    
    
    
    2,089
    
    
    
    55,770Operating Expenses:Student housing leasing
operations
    
    
    18,424
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18,424
    
    
    
    17,362
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17,362Student housing food
service operations
    
    
    1,072
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,072
    
    
    
    1,583
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,583General and administrative
    
    
    86
    
    
    
    1,271
    
    
    
    3,347
    
    
    
    
    
    
    
    4,704
    
    
    
    4
    
    
    
    1,054
    
    
    
    2,512
    
    
    
    
    
    
    
    3,570Intersegment expenses
    
    
    1,694
    
    
    
    
    
    
    
    
    
    
    
    (1,694
    )
    
    
    
    
    
    
    1,656
    
    
    
    
    
    
    
    
    
    
    
    (1,656
    )
    
    
    
 23




---



##### Table of Contents



Six months ended June 30, 2007
    
    
    Six months ended June 30, 2006Third-Party
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Third-PartyStudent
    
    
    Development
    
    
    Third-Party
    
    
    
    
    
    
    
    
    
    
    Student
    
    
    Development
    
    
    Third-PartyHousing
    
    
    Consulting
    
    
    Management
    
    
    
    
    
    
    
    
    
    
    Housing
    
    
    Consulting
    
    
    ManagementLeasing
    
    
    Services
    
    
    Services
    
    
    Adjustments
    
    
    Total
    
    
    Leasing
    
    
    Services
    
    
    Services
    
    
    Adjustments
    
    
    TotalReimbursable operating
expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,383
    
    
    
    4,383
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,745
    
    
    
    3,745Total operating expenses
    
    
    21,276
    
    
    
    1,271
    
    
    
    3,347
    
    
    
    2,689
    
    
    
    28,583
    
    
    
    20,605
    
    
    
    1,054
    
    
    
    2,512
    
    
    
    2,089
    
    
    
    26,260Net operating income (loss)
    
    
    29,697
    
    
    
    796
    
    
    
    (50
    )
    
    
    
    
    
    
    30,443
    
    
    
    28,595
    
    
    
    373
    
    
    
    542
    
    
    
    
    
    
    
    29,510Nonoperating
expenses(1)
    
    
    29,762
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    29,762
    
    
    
    31,096
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    31,096Income (loss) before
equity in earnings of
unconsolidated entities,
income taxes, minority
interest and discontinued
operations
    
    
    (65
    )
    
    
    796
    
    
    
    (50
    )
    
    
    
    
    
    
    681
    
    
    
    (2,501
    )
    
    
    373
    
    
    
    542
    
    
    
    
    
    
    
    (1,586
    )Equity in earnings of
unconsolidated entities
    
    
    (205
    )
    
    
    207
    
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    
    
    
    
    425
    
    
    
    
    
    
    
    
    
    
    
    425Income (loss) before
taxes, minority interest
and discontinued
operations(2)
    
    $
    (270
    )
    
    $
    1,003
    
    
    $
    (50
    )
    
    $
    
    
    
    $
    683
    
    
    $
    (2,501
    )
    
    $
    798
    
    
    $
    542
    
    
    $
    
    
    
    $
    (1,161
    )
 
 (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 loss before income taxes, minority interest and discontinued operations: 2007
    
    
    2006Net income (loss) before income taxes, minority interest and discontinued
operations for reportable segments
    
    $
    683
    
    
    $
    (1,161
    )Other unallocated corporate expenses (3)
    
    
    (3,445
    )
    
    
    (3,069
    )Net loss before income taxes, minority interest and discontinued operations
    
    $
    (2,762
    )
    
    $
    (4,230
    )
 
 (3)
    
    Certain prior period amounts have been reclassified to conform to the current period
presentation. Interest expense of $1,700 related to borrowings on our revolving line of credit
that were used to acquire the Place Portfolio was previously an unallocated corporate
expense. This amount has been reclassified to the student housing leasing segment
for the six months ended June 30, 2006. Additionally, noncash compensation expense of $310 has
been reclassified from an unallocated expense to the applicable segment. 24




---



##### Table of Contents



Student housing leasing
  Six months
    
    Six monthsended
    
    endedJune 30,
    
    June 30,2007
    
    2006
    
    DifferenceOccupancyPhysical (1)
    
    
    93.1
    %
    
    
    92.4
    %
    
    
    0.7
    %Economic (2)
    
    
    95.4
    %
    
    
    93.2
    %
    
    
    2.2
    %NarPAB (3)
    
    $
    362
    
    
    $
    352
    
    
    $
    10Other income per avail. bed (4)
    
    $
    24
    
    
    $
    23
    
    
    $
    1RevPAB (5)
    
    $
    386
    
    
    $
    375
    
    
    $
    11Operating expense per bed (6)
    
    $
    165
    
    
    $
    160
    
    
    $
    5Operating margin
    
    
    57.2
    %
    
    
    57.2
    %
    
    
    0.0
    %Design Beds (7)
    
    
    111,426
    
    
    
    108,306
    
    
    
    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 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 expense 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, excluding Place properties.    25




---



##### Table of Contents



Third-party development consulting services
  Recognized EarningsProject
    
    Beds
    
    Fee Type
    
    2007
    
    2006
    
    DifferenceSlippery Rock University  Phase I
    
    
    1,390
    
    
    Development fee
    
    $
    38
    
    
    $
    791
    
    
    $
    (753
    )Indiana University of Pennsylvania
    
    
    734
    
    
    Development fee
    
    
    634
    
    
    
    116
    
    
    
    518University of Michigan
    
    
    849
    
    
    Development fee
    
    
    133
    
    
    
    399
    
    
    
    (266
    )University of North Carolina  Greensboro
    
    
    600
    
    
    Construction oversight fee
    
    
    46
    
    
    
    8
    
    
    
    38University of Louisville  Phase III
    
    
    359
    
    
    Construction oversight fee
    
    
    
    
    
    
    54
    
    
    
    (54
    )University of Alabama  Birmingham
    
    
    753
    
    
    Construction  oversight fee
    
    
    
    
    
    
    59
    
    
    
    (59
    )University of Alabama  Tuscaloosa
    
    
    631
    
    
    Development fee
    
    
    875
    
    
    
    
    
    
    
    875Slippery Rock University  Phase II
    
    
    746
    
    
    Development fee
    
    
    232
    
    
    
    
    
    
    
    232Indiana University of Pennsylvania  Phase II
    
    
    1,094
    
    
    Development fee
    
    
    109
    
    
    
    
    
    
    
    109Third-party development consulting services
    
    
    
    
    
    
    
    
    
    $
    2,067
    
    
    $
    1,427
    
    
    $
    640California University of Pennsylvania  Phase IV
    
    
    447
    
    
    Development fee
    
    $
    
    
    
    $
    149
    
    
    $
    (149
    )California University of Pennsylvania  Phase V
    
    
    354
    
    
    Development fee
    
    
    110
    
    
    
    9
    
    
    
    101University of North Carolina  Greensboro
    
    
    600
    
    
    Development fee
    
    
    105
    
    
    
    19
    
    
    
    86University of Louisville  Phase III
    
    
    359
    
    
    Development fee
    
    
    (8
    )
    
    
    115
    
    
    
    (123
    )University of Alabama  Birmingham
    
    
    753
    
    
    Development fee
    
    
    
    
    
    
    133
    
    
    
    (133
    )Equity in earnings of unconsolidated entities
    
    
    
    
    
    
    
    
    
    $
    207
    
    
    $
    425
    
    
    $
    (218
    )
    Third-party management services
  26




---



##### Table of Contents



Nonoperating expenses
  Unallocated corporate expenses
  Results of Operations for the Three Months Ended June 30, 2007 and 2006
  Three months ended June 30, 2007
    
    
    Three months ended June 30, 2006Third-Party
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Third-PartyStudent
    
    
    Development
    
    
    Third-Party
    
    
    
    
    
    
    
    
    
    
    Student
    
    
    Development
    
    
    Third-PartyHousing
    
    
    Consulting
    
    
    Management
    
    
    
    
    
    
    
    
    
    
    Housing
    
    
    Consulting
    
    
    ManagementLeasing
    
    
    Services
    
    
    Services
    
    
    Adjustments
    
    
    Total
    
    
    Leasing
    
    
    Services
    
    
    Services
    
    
    Adjustments
    
    
    TotalRevenues:Student housing leasing
revenue
    
    $
    21,031
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    21,031
    
    
    $
    19,702
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    19,702Student housing food
service revenue
    
    
    522
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    522
    
    
    
    807
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    807Other leasing revenue
    
    
    3,434
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,434
    
    
    
    3,434
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,434Third-party development
consulting services
    
    
    
    
    
    
    1,024
    
    
    
    
    
    
    
    
    
    
    
    1,024
    
    
    
    
    
    
    
    872
    
    
    
    
    
    
    
    
    
    
    
    872Third-party management
revenue
    
    
    
    
    
    
    
    
    
    
    721
    
    
    
    
    
    
    
    721
    
    
    
    
    
    
    
    
    
    
    
    699
    
    
    
    
    
    
    
    699Intersegment revenues
    
    
    
    
    
    
    
    
    
    
    816
    
    
    
    (816
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    801
    
    
    
    (801
    )
    
    
    Operating expense
reimbursements
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,227
    
    
    
    2,227
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,950
    
    
    
    1,950Total revenues
    
    
    24,987
    
    
    
    1,024
    
    
    
    1,537
    
    
    
    1,411
    
    
    
    28,959
    
    
    
    23,943
    
    
    
    872
    
    
    
    1,500
    
    
    
    1,149
    
    
    
    27,464Operating Expenses:Student housing leasing
operations
    
    
    9,402
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,402
    
    
    
    8,755
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,755Student housing food
service operations
    
    
    511
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    511
    
    
    
    724
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    724
 27




---



##### Table of Contents



Three months ended June 30, 2007
    
    
    Three months ended June 30, 2006Third-Party
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Third-PartyStudent
    
    
    Development
    
    
    Third-Party
    
    
    
    
    
    
    
    
    
    
    Student
    
    
    Development
    
    
    Third-PartyHousing
    
    
    Consulting
    
    
    Management
    
    
    
    
    
    
    
    
    
    
    Housing
    
    
    Consulting
    
    
    ManagementLeasing
    
    
    Services
    
    
    Services
    
    
    Adjustments
    
    
    Total
    
    
    Leasing
    
    
    Services
    
    
    Services
    
    
    Adjustments
    
    
    TotalGeneral and administrative
    
    
    43
    
    
    
    597
    
    
    
    1,468
    
    
    
    
    
    
    
    2,108
    
    
    
    4
    
    
    
    540
    
    
    
    1,218
    
    
    
    
    
    
    
    1,762Intersegment expenses
    
    
    816
    
    
    
    
    
    
    
    
    
    
    
    (816
    )
    
    
    
    
    
    
    801
    
    
    
    
    
    
    
    
    
    
    
    (801
    )
    
    
    Reimbursable operating
expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,227
    
    
    
    2,227
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,950
    
    
    
    1,950Total operating expenses
    
    
    10,772
    
    
    
    597
    
    
    
    1,468
    
    
    
    1,411
    
    
    
    14,248
    
    
    
    10,284
    
    
    
    540
    
    
    
    1,218
    
    
    
    1,149
    
    
    
    13,191Net operating income (loss)
    
    
    14,215
    
    
    
    427
    
    
    
    69
    
    
    
    
    
    
    
    14,711
    
    
    
    13,659
    
    
    
    332
    
    
    
    282
    
    
    
    
    
    
    
    14,273Nonoperating
expenses(1)
    
    
    14,603
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,603
    
    
    
    15,629
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,629Income (loss) before
equity in earnings of
unconsolidated entities,
income taxes, minority
interest and discontinued
operations
    
    
    (388
    )
    
    
    427
    
    
    
    69
    
    
    
    
    
    
    
    108
    
    
    
    (1,970
    )
    
    
    332
    
    
    
    282
    
    
    
    
    
    
    
    (1,356
    )Equity in earnings of
unconsolidated entities
    
    
    (108
    )
    
    
    67
    
    
    
    
    
    
    
    
    
    
    
    (41
    )
    
    
    
    
    
    
    142
    
    
    
    
    
    
    
    
    
    
    
    142Income (loss) before
taxes, minority interest
and discontinued
operations(2)
    
    $
    (496
    )
    
    $
    494
    
    
    $
    69
    
    
    $
    
    
    
    $
    67
    
    
    $
    (1,970
    )
    
    $
    474
    
    
    $
    282
    
    
    $
    
    
    
    $
    (1,214
    )
 
 (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 loss before income taxes, minority interest and discontinued operations: 2007
    
    
    2006Net loss before income taxes, minority interest and discontinued operations for
reportable segments
    
    $
    67
    
    
    $
    (1,214
    )Other unallocated corporate expenses (3)
    
    
    (2,047
    )
    
    
    (1,780
    )Net loss before income taxes, minority interest and discontinued operations
    
    $
    (1,980
    )
    
    $
    (2,994
    )
 
 (3)
    
    Certain prior period amounts have been reclassified to conform to the current period
presentation. Interest expense of $950 related to borrowings on our revolving line of credit
that were used to acquire the Place Portfolio was previously an unallocated corporate
expense. This amount has been reclassified to the student housing leasing segment
for the three months ended June 30, 2006. Additionally, noncash compensation expense of $74 has
been reclassified from an unallocated expense to the applicable segment. 28




---



##### Table of Contents



Student housing leasing
  Three months
    
    Three monthsended
    
    endedJune 30,
    
    June 30,2007
    
    2006
    
    DifferenceOccupancyPhysical (1)
    
    
    91.0
    %
    
    
    90.4
    %
    
    
    0.6
    %Economic (2)
    
    
    94.9
    %
    
    
    91.4
    %
    
    
    3.5
    %NarPAB (3)
    
    $
    350
    
    
    $
    337
    
    
    $
    13Other income per avail. bed (4)
    
    $
    27
    
    
    $
    25
    
    
    $
    2RevPAB (5)
    
    $
    377
    
    
    $
    362
    
    
    $
    15Operating expense per bed (6)
    
    $
    169
    
    
    $
    161
    
    
    $
    8Operating margin
    
    
    55.3
    %
    
    
    55.6
    %
    
    
    (0.3
    )%Design Beds (7)
    
    
    55,713
    
    
    
    54,465
    
    
    
    1,248
 
 (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 expense 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, excluding Place properties.    Third-party development consulting services
  29




---



##### Table of Contents



Third-party management services
   Nonoperating expenses
  Unallocated corporate expenses
  Funds from Operations
   30




---



##### Table of Contents



Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Net income (loss)
    
    $
    194
    
    
    $
    (2,514
    )
    
    $
    (297
    )
    
    $
    (3,294
    )Less gain on sale of student housing property, net of
minority interest
    
    
    (1,579
    )
    
    
    
    
    
    
    (1,579
    )
    
    
    Plus student housing property depreciation and amortization
of lease intangibles
    
    
    7,811
    
    
    
    8,487
    
    
    
    15,809
    
    
    
    17,052Plus equity portion of real estate depreciation and
amortization on equity investees
    
    
    92
    
    
    
    
    
    
    
    190
    
    
    
    Plus depreciation and amortization of discontinued operations
    
    
    242
    
    
    
    512
    
    
    
    711
    
    
    
    1,016Plus minority interest
    
    
    (105
    )
    
    
    (206
    )
    
    
    31
    
    
    
    (65
    )Funds from operations
    
    $
    6,655
    
    
    $
    6,279
    
    
    $
    14,865
    
    
    $
    14,709
 Liquidity and Capital Resources
       31




---



##### Table of Contents



Liquidity outlook and capital requirements
        Predevelopment expenditures
  Long-term liquidity requirements
  32




---



##### Table of Contents



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)
    
    $
    1,853
    
    
    $
    311,530
    
    
    $
    1,835
    
    
    $
    105,902
    
    
    $
    421,120Contractual Interest Obligations (2)
    
    
    12,674
    
    
    
    41,248
    
    
    
    12,900
    
    
    
    6,307
    
    
    
    73,129Operating Lease and Future Purchase
Obligations (3)
    
    
    1,240
    
    
    
    4,187
    
    
    
    3,206
    
    
    
    847
    
    
    
    9,480Capital Reserve Obligations (4)
    
    
    1,573
    
    
    
    2,418
    
    
    
    421
    
    
    
    182
    
    
    
    4,594Total
    
    $
    17,340
    
    
    $
    359,383
    
    
    $
    18,362
    
    
    $
    113,238
    
    
    $
    508,323
 
 (1)
    
    Includes required monthly principal amortization and amounts due at maturity on first mortgage debt secured by student
housing properties and principal amortization on the Amended Revolver and the Term Loan. The first mortgage debt does not
include $2,026 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.   Distributions
   Off-Balance Sheet Arrangements
  33




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##### Table of Contents



Inflation
  
 Item 3. Quantitative and Qualitative Disclosures about Market Risk.
     
 Item 4. Controls and Procedures.
 Managements Evaluation of Disclosure Controls and Procedures
   Changes in Internal Control Over Financial Reporting
  34




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##### Table of Contents



PART II
OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk factors
  
 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:
  VotesFor
    
    WithheldPaul O. Bower
    
    
    25,216,535
    
    
    
    472,538Monte J. Barrow
    
    
    25,489,821
    
    
    
    199,252William J. Cahill, III
    
    
    25,480,528
    
    
    
    208,545John L. Ford
    
    
    25,491,638
    
    
    
    197,435Wendell W. Weakley
    
    
    25,479,637
    
    
    
    209,436
 Proposal 2:
  For
    
    Against
    
    Abstain
    
    Broker non-vote25,568,275
    
    
    98,469
    
    
    
    22,328
    
    
    
    0
 
 Item 5. Other Information.
  
 Item 6. Exhibits.
  35




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##### Table of Contents



SIGNATURES
  EDUCATION REALTY TRUST, INC.Date: August 3, 2007
    
    By
    
    /s/ Paul O. BowerPaul O. Bower
President, Chief Executive Officer and
Chairman of the Board of Directors
(Principal Executive Officer)Date: August 3, 2007
    
    By
    
    /s/ Randall H. BrownRandall H. Brown
Executive Vice President, Chief Financial
Officer, Treasurer and Secretary
(Principal Financial Officer)Date: August 3, 2007
    
    By
    
    /s/ J. Drew KoesterJ. Drew Koester
Vice President and Chief Accounting Officer
(Principal Accounting Officer)
 36




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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 Companys Amendment
No. 2 to its Registration Statement on Form S-11
(File No. 333-1192364), filed on December 10, 2004.)3.2
    
    Bylaws of Education Realty Trust, Inc. (Incorporated
by reference to Exhibit 3.2 to the Companys
Registration Statement on Form S-11 (File No.
333-119264), filed on September 24, 2004.)4.1
    
    Form of Certificate for Common Stock of Education
Realty Trust, Inc. (Incorporated by reference to
Exhibit 4.1 to the Companys Amendment No. 5 to its
Registration Statement on Form S-11 (File No.
333-1192364), filed on January 24, 2005.)4.2
    
    Form of Registration Rights Agreement dated January
31, 2005, by and among Education Realty Trust, Inc.,
Education Realty Operating Partnership, LP, JPI
Investment Company, L.P. and the unit holders whose
names are set forth on the signature pages thereto.
(Incorporated by reference to Exhibit 4.3 to the
Companys Registration Statement on Form S-11 (File
No. 333-119264), filed on September 24, 2004.)Exhibit 31.1
    
    Certification of Chief Executive Officer pursuant to
Rule 13a-14(a) of the Securities Exchange Act, as
amended.Exhibit 31.2
    
    Certification of Chief Financial Officer pursuant to
Rule 13a-14(a) of the Securities Exchange Act, as
amended.Exhibit 32.1*
    
    Section 906 Certification of Chief Executive OfficerExhibit 32.2*
    
    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.