EdR CEO Sees Student Housing REITs Increasing Market Share

Randy Churchey, president and CEO of EdR (NYSE: EDR), joined REIT.com for a CEO Spotlight video interview at REITWorld 2014: NAREIT’s Annual Convention for All Things REIT at the Atlanta Marriott Marquis.

EdR is one of the largest developers, owners and managers of collegiate housing communities in the United States. Recently, the company completed the purchase of The District on Apache, a collegiate housing community at Arizona State University (ASU), for approximately $90 million.

Churchey said the acquisition fits “perfectly” with EdR’s overall strategy. He explained that ASU has the highest enrollment of any university in the country. When EdR considers acquisition or developments, he noted, one of the first things it does is evaluate the university.

“Obviously being the largest enrollment university in America its right up there on the list of what we want to see,” he said.

Furthermore, The District on Apache is a brand new asset located one block from campus. “Really it is a perfect asset and a perfect representation of our portfolio,” Churchey added.

Turning to supply-and-demand trends, Churchey pointed out that new supply in the markets where EdR operates is decreasing by 15 percent. Nationally, supply has decreased by 25 percent.

“Supply looks very good, and that’s why our development pipeline is fairly robust,” he said.

EdR delivered $300 million of new development in the summer of 2014, which is a “meaningful number” when compared with the company’s total enterprise value of about $2 billion, according to Churchey.

The company is slated to deliver another $200 million in new development next summer, and $100 million in new development has been lined up so far for delivery in the summer of 2016, Churchey noted.

Churchey also discussed whether stock exchange-listed student housing REITs can increase their market share. Currently the three leading stock exchange-listed student housing REITs hold a market share in the “single digits,” Churchey said. Most off-campus student housing is owned by local entrepreneurs, “so the ability of the REITs to increase market share is a substantial opportunity,” according to Churchey.

“I suspect we’ll be over double digits sometime soon,” he predicted.