EdR Taking Steps to Narrow Gap Between Public and Private Market Valuations
06/14/2018 | by Nareit Staff

Randy Churchey, chairman and CEO of EdR (NYSE: EDR), participated in a video interview at Nareit’s REITweek: 2018 Investor Conference in New York.

Churchey discussed steps EdR is taking to narrow the gap between public and private valuations.

“Most REITs are trading at a discount to net asset value (NAV), which is very frustrating for all of us,” Churchey said. He noted that EdR is trying to communicate to the public where private transaction cap rates stand versus the implied cap rate of EdR’s stock.

Underscoring this point is the fact that EdR recently sold several bottom tier assets at a 5.9 cap rate, which is a better cap rate that what the whole company has been trading at, according to Churchey.

Churchey also observed that for the fifth or sixth year in a row supply growth has exceeded enrollment growth by about 50 basis points. While supply is “out of control” at some universities, overall it remains at a manageable level, he said.

At the same time, a strong tailwind offsetting increased supply has been the approximately 50 percent of students who are not already in purpose-built student housing, Churchey said.

Meanwhile, Churchey said 2018 is likely to be another record year for student housing transactions. “The amount of cash that is chasing student housing assets is at the highest level I’ve ever seen it… I just don’t see that changing anytime soon.”