Randy Churchey, president and CEO of student housing REIT EdR (NYSE: EDR), joined REIT.com for a CEO Spotlight video interview at the St. Regis Hotel in Washington, D.C. during NAREIT’s 2014 Washington Leadership Forum.
EdR is one of America's largest owners, developers and managers of collegiate housing. With state governments looking to outside capital sources to fund and develop new student housing projects, Churchey dismissed the suggestion that the market could be getting overheated.
“We’ve produced data for our investors to show what supply is looking like in the markets that we invest in, and the supply is a little bit in excess of demand, which gives some people a little bit of pause, but not us,” Churchey said. “The main reason is that in university campuses probably half of the students are living in older, dilapidated single-family houses—passive-type investments. What we’re seeing is that with the supply that is being added, kids are moving out of those older communities, and those are getting repurposed for what their intentional use was. Students are moving more toward our purpose-built housing. We view the supply of housing and the enrollment growth, plus this modernization or pent-up demand, to be actually in our favor.”
Churchey said colleges are using EdR’s developments to both augment their existing housing stock for students and replace outdated facilities.
“For the most part, these enrollments increases that are going on across the United States… (have) really been absorbed by new purpose-built student housing off campus,” Churchey said.
Churchey also offered an update on the status of EdR’s expansive housing developments on the University of Kentucky campus. Churchey called the project, which involves an extensive makeover of the school’s housing facilities “a fantastic initiative.”
"They’ve hired us using our ONE Plan financing tool to rebuild the entire housing stock of the campus,” he said. “The university will do the residence life, but we’ll own and manage all the operations. It has been great so far.”
EdR delivered 601 beds for the project last year. The firm plans to add 2,300 new beds this year and a combined total of more than 2,000 in 2015 and 2016.