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	•	As of March 31, 2005, our total consolidated indebtedness was approximately $309.4 million (excluding unamortized debt premiums). Our debt service obligations expose us to the risk of default and reduce (or eliminate) cash resources that are available to operate our business or pay distributions, including those necessary to maintain our REIT qualification. There is no limit on the amount of indebtedness that we may incur except as provided by the covenants in our revolving credit facility.
	•	Our results of operations are subject to annual re-leasing, seasonality and other risks that are unique to the student housing industry.
	•	We have been recently organized and have a limited operating history. Our management has limited experience in running a public company or in operating in accordance with the requirements for qualification as a REIT.
	•	Provisions of our organizational documents limit the ownership of our shares.
	•	If we fail to qualify as a REIT for federal income tax purposes, our distributions will not be deductible by us, reducing our cash available for distribution to our stockholders.
	•	We may not be able to make distributions to our stockholders in the future, and we may make distributions that include a return of capital.

		Per Share				Total
Public offering price		$	22.500			$	90,000,000
Underwriting discount		$	1.125			$	4,500,000
Proceeds, before expenses, to us		$	21.375			$	85,500,000

Citigroup	Deutsche Bank Securities

	KeyBanc Capital Markets

	Wachovia Securities

	RBC Capital Markets

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PROSPECTUS SUMMARY				1
	Our Company			1
	Recent Activities			2
	Competitive Strengths			3
	Summary Risk Factors			4
	Our Business and Growth Strategies			6
	Our Properties			9
	Third Party Services			11
	Our Organization			13
	Distribution Policy			13
	Our Tax Status			14
	Summary Historical and Pro Forma Selected Financial Data			14
	This Offering			17
RISK FACTORS				18
	Risks Related to Our Properties and Our Business			18
	Risks Related to the Real Estate Industry			22
	Risks Related to Our Organization and Structure			26
	Risks Related to this Offering			30
FORWARD-LOOKING STATEMENTS				32
USE OF PROCEEDS				33
DISTRIBUTION POLICY				34
PRICE RANGE OF COMMON STOCK				35
CAPITALIZATION				36
SELECTED FINANCIAL DATA				37
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS				40
	Overview			40
	Critical Accounting Policies			44
	Results of Operations			46
	Cash Flows			58
	Liquidity and Capital Resources			61
	Contractual Obligations			65
	Off-Balance Sheet Items			65
	Funds From Operations			65
	Inflation			68
	Quantitative and Qualitative Disclosures About Market Risk			68
OUR BUSINESS AND PROPERTIES				69
	Our Company			69
	Recent Activities			69
	Industry Outlook			71
	Competitive Strengths			72
	Our Business and Growth Strategies			73
	Operating Segments			78
	Competition			81
	Our Properties			82
	Regulation			87
	Insurance			88
	Employees			89
	Offices and Website			89
	Legal Proceedings			89
MANAGEMENT				90
	Directors, Executive Officers and Senior Management			90
	Board Committees			93
	Compensation of Directors			94
	Guidelines on Governance and Codes of Ethics			95
	Executive Officer Compensation			95
	Compensation Committee Interlocks and Insider Participation			101
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS				101
POLICIES WITH RESPECT TO CERTAIN ACTIVITIES				102
	Investment Policies			103
	Dispositions			104
	Financing Policies			104
	Conflict of Interest Policies			104
	Interested Director and Officer Transactions			105
	Business Opportunities			105
	Policies with Respect to Other Activities			105
	Reporting Policies			106
STRUCTURE AND FORMATION				106
	Our Structure			106
	The Operating Partnership			106
	The TRS			106
	Formation Transactions and Our Recent Formation as a REIT			106
	Restrictions on Transfer			107
	Conflicts of Interest			107
	Restrictions on Ownership of Our Capital Stock			107

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			Page
DESCRIPTION OF THE PARTNERSHIP AGREEMENT OF AMERICAN CAMPUS COMMUNITIES OPERATING PARTNERSHIP LP				108
	Management of Our Operating Partnership			108
	Transferability of Interests			108
	Amendments of the Partnership Agreement			108
	Distributions to Unitholders			109
	Redemption/Exchange Rights			109
	Issuance of Additional Units, Common Stock or Convertible Securities			110
	Tax Matters			110
	Allocations of Net Income and Net Losses to Partners			110
	Operations			110
	Termination Transactions			110
	Term			111
	Indemnification and Limitation of Liability			111
PRINCIPAL STOCKHOLDERS				112
DESCRIPTION OF SECURITIES				114
	General			114
	Common Stock			114
	Preferred Stock			115
	Restrictions on Transfer			115
	Transfer Agent and Registrar			118
CERTAIN PROVISIONS OF MARYLAND LAW AND OF OUR CHARTER AND BYLAWS				118
	Our Board of Directors, Vacancies on Our Board of Directors and Removal of Directors			118
	Amendment of Our Charter and Bylaws			118
	Transactions Outside the Ordinary Course of Business			118
	Dissolution			119
	Advance Notice of Director Nominations and New Business			119
	Ownership Limit			120
	Business Combinations			120
	Control Share Acquisitions			120
	Anti-Takeover Effect of Certain Provisions of Maryland Law and of Our Charter and Bylaws			121
	Board Consideration of Relevant Factors and Constituencies			121
	Duties of Our Directors			121
	Indemnification and Limitation of Directors’ and Officers’ Liability			122
	Indemnification Agreements			123
SHARES ELIGIBLE FOR FUTURE SALE				124
	General			124
	Rule 144			124
	Stock Options and 2004 Incentive Award Plan			124
	Registration Rights			124
	Lock-up Agreements and Other Contractual Restrictions on Resale			125
FEDERAL INCOME TAX CONSIDERATIONS				126
	Taxation of Our Company			126
	Requirements for Qualification			128
	Organizational Requirements			128
	Taxation of Taxable U.S. Stockholders			136
	Income Taxation of the Partnerships and Their Partners			142
ERISA CONSIDERATIONS				144
	General			144
	Employee Benefit Plans, Tax-Qualified Retirement Plans and IRAs			144
	Our Status Under ERISA			145
UNDERWRITING				147
LEGAL MATTERS				149
EXPERTS				150
WHERE YOU CAN FIND MORE INFORMATION				150
INDEX TO FINANCIAL STATEMENTS				F-1

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	Our results of operations are subject to an annual leasing cycle, short lease-up period, seasonal cash flows, changing university admission and housing policies and other risks inherent in the student housing industry.

	We face significant competition from university-owned on-campus student housing, from other off-campus student housing properties and from traditional multifamily housing located within close proximity to universities.

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	We may be unable to successfully complete and operate our properties or our third party developed properties.

	•	We may be unable to obtain construction financing on favorable terms or at all.
	•	We may be unable to obtain permanent financing on favorable terms or at all if we finance development projects through construction loans.
	•	We may not complete development projects on schedule, within budgeted amounts or in conformity with building plans and specifications, including our four current properties under development.
	•	We may encounter delays or refusals in obtaining all necessary zoning, land use, building, occupancy and other required governmental permits and authorizations.
	•	Occupancy and rental rates at newly developed or renovated properties may fluctuate depending on a number of factors, including market and economic conditions, and may reduce or eliminate our return on investment.
	•	We may become liable for injuries and accidents occurring during the construction process and for environmental liabilities, including off-site disposal of construction materials.
	•	We may decide to abandon our development efforts if we determine that continuing the project would not be in our best interests.
	•	We may encounter strikes, weather, government regulations and other conditions beyond our control.

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	We may be unable to successfully acquire properties on favorable terms.

	•	Potential inability to acquire a desired property may be caused by competition from other real estate investors.
	•	Competition from other potential acquirers may significantly increase the purchase price.
	•	We may be unable to finance an acquisition on favorable terms or at all.
	•	We may have to incur significant capital expenditures to improve or renovate acquired properties.
	•	We may be unable to quickly and efficiently integrate new acquisitions, particularly acquisitions of portfolios of properties, into our existing operations.
	•	Market conditions may result in higher than expected costs and vacancy rates and lower than expected rental rates.
	•	We may acquire properties subject to liabilities but without any recourse, or with only limited recourse, to the sellers, or with liabilities that are unknown to us, such as liabilities for clean-up of undisclosed environmental contamination, claims by tenants, vendors or other persons dealing with the former owners of our properties and claims for indemnification by members, directors, officers and others indemnified by the former owners of our properties.

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	Our debt level reduces cash available for distribution and may expose us to the risk of default under our debt obligations.

	•	We may be unable to borrow additional funds as needed or on favorable terms.
	•	We may be unable to refinance our indebtedness at maturity or the refinancing terms may be less favorable than the terms of our original indebtedness.
	•	We may be forced to dispose of one or more of our properties, possibly on disadvantageous terms.
	•	We may default on our payment or other obligations as a result of insufficient cash flow or otherwise, which may result in a cross-default on our other obligations, and the lenders or mortgagees may foreclose on our properties that secure their loans and receive an assignment of rents and leases.
	•	Foreclosures could create taxable income without accompanying cash proceeds, a circumstance that could hinder our ability to meet the REIT distribution requirements imposed by the Code.

	We may not be able to recover pre-development costs for university developments.

	Our awarded projects may not be successfully structured or financed and may delay our recognition of revenues.

	Two of our properties are under construction, and we may encounter delays in completion or experience cost overruns.

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	Our guarantees could result in liabilities in excess of our development fees.

	Universities have the right to terminate our participating ground leases.

	We have a significant presence on a single university campus.

	Our performance and value are subject to risks associated with real estate assets and with the real estate industry.

	•	general economic conditions;
	•	rising level of interest rates;
	•	local oversupply, increased competition or reduction in demand for student housing;
	•	inability to collect rent from tenants;
	•	vacancies or our inability to rent space on favorable terms;
	•	inability to finance property development and acquisitions on favorable terms;
	•	increased operating costs, including insurance premiums, utilities, and real estate taxes;

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	•	costs of complying with changes in governmental regulations;
	•	the relative illiquidity of real estate investments;
	•	decreases in student enrollment at particular colleges and universities;
	•	changes in university policies related to admissions; and
	•	changing student demographics.

	Potential losses may not be covered by insurance.

	Unionization or work stoppages could have an adverse effect on us.

	We could incur significant costs related to government regulation and private litigation over environmental matters.

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	Existing conditions at some of our properties may expose us to liability related to environmental matters.

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	We may incur environmental liabilities.

	We may incur significant costs complying with the Americans with Disabilities Act and similar laws.

	We may incur significant costs complying with other regulations.

	Joint venture investments could be adversely affected by our lack of sole decision-making authority, our reliance on co-venturers’ financial condition and disputes between our co-venturers and us.

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	We are recently organized and have a limited operating history.

	To qualify as a REIT, we may be forced to limit the activities of our TRS.

	Failure to qualify as a REIT would have significant adverse consequences to us and the value of our stock.

	•	we would not be allowed a deduction for dividends to stockholders in computing our taxable income and such amounts would be subject to federal income tax at regular corporate rates;
	•	we also could be subject to the federal alternative minimum tax and possibly increased state and local taxes; and

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	•	unless we are entitled to relief under applicable statutory provisions, we could not elect to be taxed as a REIT for four taxable years following the year during which we were disqualified.

	To qualify as a REIT, we may be forced to borrow funds on a short-term basis during unfavorable market conditions.

	•	general market conditions;
	•	our current debt levels and the number of properties subject to encumbrances;
	•	our current performance and the market’s perception of our growth potential;
	•	our cash flow and cash dividends; and
	•	the market price per share of our common stock.

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	Our charter contains restrictions on the ownership and transfer of our stock.

	Certain tax and anti-takeover provisions of our charter and bylaws may inhibit a change of our control.

	•	the REIT ownership limit described above;
	•	authorization of the issuance of our preferred shares with powers, preferences or rights to be determined by our board of directors;
	•	the right of our board of directors, without a stockholder vote, to increase our authorized shares and classify or reclassify unissued shares;
	•	advance-notice requirements for stockholder nomination of directors and for other proposals to be presented to stockholder meetings; and
	•	the requirement that a majority vote of the holders of common stock is needed to remove a member of our board of directors for “cause.”

	The Maryland business statutes also impose potential restrictions on a change of control of our company.

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	We have the right to change some of our policies that may be important to our stockholders without stockholder consent.

	Our rights and the rights of our stockholders to take action against our directors and officers are limited.

	Our success depends on key personnel whose continued service is not guaranteed.

	The majority of our management have limited experience operating a REIT or a public company.

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	In addition to the underwriting discounts to be received by Citigroup Global Markets Inc., Deutsche Bank Securities Inc., J.P. Morgan Securities Inc. and KeyBanc Capital Markets, a division of McDonald Investments Inc., their affiliates will receive benefits from this Offering.

	We may not be able to make distributions to our stockholders in the future.

	Our distributions will not be eligible for the recent lower tax rate on dividends except in limited situations.

	The public offering price of our common stock in this Offering may not be indicative of the market price of our common stock after this Offering and our stock price may be volatile.

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	Certain members of our senior management will receive an economic benefit from this Offering.

	Market interest rates may have an effect on the value of our common stock.

	The number of shares available for future sale could adversely affect the market price of our common stock.

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	•	changing university admission and housing policies;
	•	adverse economic or real estate developments;
	•	general economic conditions;
	•	future terrorist attacks in the U.S. or hostilities involving the U.S.;
	•	defaults on or non-renewal of leases by student-tenants;
	•	increased interest rates and operating costs;
	•	debt levels and property encumbrances;
	•	our failure to obtain necessary third party financing;
	•	decreased rental rates or increased vacancy rates resulting from competition or otherwise;
	•	difficulties in identifying properties to acquire and completing acquisitions;
	•	our failure to successfully operate acquired properties and operations;
	•	our failure to successfully develop properties in a timely manner;
	•	our failure to maintain our status as a REIT;
	•	environmental costs, uncertainties and risks, especially those related to natural disasters;
	•	financial market fluctuations; and
	•	changes in real estate and zoning laws and increases in real property tax rates.

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		High				Low
2004
Third quarter (August 17 through September 30)		$	19.05			$	17.00
Fourth quarter			23.06				18.50
2005
First quarter		$	22.75			$	19.09
Second quarter (through June 28)			23.36				19.04

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				(in thousands)
				As of March 31, 2005
				Actual				Pro Forma
				(Unaudited)
Cash and cash equivalents				$	6,425			$	56,575
Debt:
	Revolving credit facility			$	33,600			$	—
	Mortgage, loans and bonds payable				275,829				275,829
	Unamortized debt premiums				4,956				4,956
		Total debt			314,385				280,785
Minority interests					2,649				2,649
Stockholders’ Equity:
	Common stock, $.01 par value, 800,000,000 shares authorized, 12,615,000 shares issued and outstanding actual, 16,615,000 shares issued and outstanding pro forma				126				166
	Additional paid-in capital				135,150				218,860
	Accumulated earnings and distributions				5,717				5,717
	Accumulated other comprehensive income				387				387
		Total stockholders’ equity			141,380				225,130
	Total capitalization			$	458,414			$	508,564

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	•	the development and management service operations and real estate operations of American Campus Communities, L.L.C., one of the Predecessor Entities;
	•	the real estate operations of RAP SHP and its subsidiaries, including The Village at Riverside, which we ceased owning after the completion of the IPO, and Coyote Village, which was transferred to Weatherford College in April 2004; and
	•	the joint venture properties and operations of American Campus– Titan, LLC and American Campus– Titan II, LLC.

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			(in thousands, except share and per share data)
			Three Months Ended
			March 31,												Years Ended December 31,
			Historical												Historical
											Pro Forma																								Pro Forma
			2005				2004				2005				2004				2003				2002				2001				2000				2004
			(Unaudited)								(Unaudited)
Revenues			$	19,541			$	15,352			$	22,325			$	60,823			$	57,136			$	52,131			$	40,752			$	25,126			$	76,623
Income (loss) from continuing operations				2,311				1,585				2,646				(1,572	)			(967	)			(2,753	)			(3,300	)			(1,869	)			(1,785	)
Discontinued operations:
	(Loss) income attributable to discontinued operations			(2	)			(55	)							272				7				319				361				(3	)
	Gain (loss) from disposition of real estate			5,883				—								(39	)			16				295				—				—
Net income (loss)				8,192				1,530								(1,339	)			(944	)			(2,139	)			(2,939	)			(1,872	)
Per Share and Distribution Data:(1)
Income per diluted share:
	Income from continuing operations		$	0.19							$	0.21			$	0.10																			$	(.14	)
	Discontinued operations			0.46												0.05
	Net income		$	0.65											$	0.15
Cash distributions declared per share/unit				0.3375												0.1651
Cash distributions declared				4,277												2,104

			(in thousands)
			As of				As of December 31,
			March 31,
			2005				2004				2003				2002				2001				2000
			(Unaudited)
Total assets			$	486,487			$	367,628			$	330,566			$	307,658			$	295,637			$	217,151
Debt				314,385				201,014				267,518				249,706				234,449				178,442
Stockholders’ and Predecessor entities owners’ equity(2)				141,380				138,229				27,658				35,526				40,572				25,609
Selected Owned Property Information:
	Owned properties			24				18				14				14				13				10
	Units			5,163				4,317				3,567				3,459				3,377				2,781
	Beds			15,593				12,955				10,546				10,336				10,027				8,232
	Occupancy			96.0	%			97.1	%			91.5	%			91.0	%			93.5	%			93.3	%

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			(in thousands)
			Three Months
			Ended
			March 31,								Years Ended December 31,
			2005				2004				2004				2003				2002				2001				2000
			(Unaudited)
Cash Flow Information:
	Net cash provided by operating activities		$	5,713			$	5,237			$	17,293			$	6,862			$	7,647			$	5,338			$	3,577
	Net cash used in investing activities			(58,853	)			(19,213	)			(63,621	)			(33,738	)			(21,678	)			(68,540	)			(87,652	)
	Net cash provided by financing activities			55,515				13,004				45,151				21,537				11,646				72,832				84,215
Funds From Operations (“FFO”):
	Net income (loss)		$	8,192			$	1,530			$	(1,339	)		$	(944	)		$	(2,139	)		$	(2,939	)		$	(1,872	)
	Minority interests			87				(21	)			(100	)			(16	)			(30	)			(110	)			(20	)
	(Gain) loss from disposition of real estate			(5,883	)			—				39				(16	)			(295	)			—				—
	Real estate related depreciation and amortization			3,326				2,277				10,009				8,937				8,233				6,807				4,188
	Funds from operations(3)(4)		$	5,722			$	3,786			$	8,609			$	7,961			$	5,769			$	3,758			$	2,296

(1)	Represents per share information and cash distributions declared during the period from August 17, 2004 through March 31, 2005.
(2)	Information as of March 31, 2005 and December 31, 2004 reflects our stockholders’ equity as a result of the IPO while previous years reflect the equity of the owners of our Predecessor Entities.
(3)	As defined by the National Association of Real Estate Investment Trusts or NAREIT, funds from operations or FFO represents income (loss) before allocation to minority interest (computed in accordance with GAAP), excluding gains (or losses) from sales of property, plus real estate related depreciation and amortization (excluding amortization of loan origination costs) and after adjustments for unconsolidated partnerships and joint ventures. We present FFO because we consider it an important supplemental measure of our operating performance and believe it is frequently used by securities analysts, investors and other interested parties in the evaluation of REITs, many of which present FFO when reporting their results. FFO is intended to exclude GAAP historical cost depreciation and amortization of real estate and related assets, which assumes that the value of real estate diminishes ratably over time. Historically, however, real estate values have risen or fallen with market conditions. Because FFO excludes depreciation and amortization unique to real estate, gains and losses from property dispositions and extraordinary items, it provides a performance measure that, when compared year over year, reflects the impact to operations from trends in occupancy rates, rental rates, operating costs, development activities and interest costs, providing perspective not immediately apparent from net income.

We compute FFO in accordance with standards established by the Board of Governors of NAREIT in its March 1995 White Paper (as amended in November 1999 and April 2002), which may differ from the methodology for calculating FFO utilized by other equity REITs and, accordingly, may not be comparable to such other REITs. Further, FFO does not represent amounts available for management’s discretionary use because of needed capital replacement or expansion, debt service obligations or other commitments and uncertainties. FFO should not be considered as an alternative to net income (loss) (computed in accordance with GAAP) as an indicator of our financial performance or to cash flow from operating activities (computed in accordance with GAAP) as an indicator of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to pay dividends or make distributions.

(4)	When considering our FFO, we believe it is also a meaningful measure of our performance to exclude certain revenues and expenses from our on-campus participating properties. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Funds from Operations.”

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	Our Company and Our Business

			(in thousands)
			Total								Balance to be
			Contractual				Fees Previously				Earned and
			Fee				Earned and				Recognized in				Scheduled
Property			Amount				Recognized				2005 and 2006				Completion
Saint Leo University Phase II			$	375			$	199			$	176				Aug 2005
Vista del Campo Phase II				3,501				168				3,333				Aug 2006
West Virginia University— pre development services				400	(1)			370				30				Jun 2005
Fenn Tower Renovation				1,509				10				1,499				Aug 2006
Lamar University Dining Hall				110				22				88				Nov 2005
	Total		$	5,895			$	769			$	5,126

(1)	Contractual fee amount is shown net of approximately $0.6 million of costs anticipated to be incurred to complete the project.

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	Acquisitions

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	Disposition

	Owned Development Activities

	Structure of On-Campus Participating Properties

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			(in thousands)
			Three Months Ended
			March 31,								Year Ended December 31,
			2005				2004				2004				2003				2002
Revenues			$	5,491			$	5,608			$	17,730			$	17,002			$	16,670
Direct operating expenses(1)				1,722				1,785				7,621				7,517				7,273
Amortization				879				854				3,532				3,271				3,152
Amortization of deferred financing costs				46				66				240				180				160
Ground/facility lease expense				212				175				846				584				664
	Net operating income			2,632				2,728				5,491				5,450				5,421
Interest income				25				6				53				30				67
Interest expense				(1,347	)			(1,449	)			(5,547	)			(5,293	)			(5,291	)
Other nonoperating income				—				—				234				—				—
	Net income(2)		$	1,310			$	1,285			$	231			$	187			$	197

(1)	Excludes the property management fees described below. This expense and the corresponding fee revenue recognized by us have been eliminated in consolidation/combination. Also excludes allocation of expenses related to corporate management and oversight.
(2)	Includes the results of Coyote Village, which was transferred to Weatherford College in April 2004. Operations at this property are classified as discontinued operations for all relevant periods in the consolidated and combined financial statements included elsewhere in this prospectus. Excludes income taxes associated with these properties, which are owned by our TRS subsequent to the IPO.

	Our Recent Formation as a REIT

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	•	Redeemed 100% of the ownership interests of the Predecessor Entities in RAP Student Housing Properties L.L.C. (“RAP SHP”) for approximately $80.1 million.
	•	Acquired the minority ownership interest of Titan Investments II (“Titan”) in certain owned off-campus properties in exchange for approximately $5.7 million.
	•	Repaid certain construction and permanent indebtedness totaling approximately $105.5 million.
	•	Distributed The Village at Riverside and certain other non-core assets to the Predecessor Entities.
	•	Entered into a $75 million senior secured revolving credit facility under which our ability to borrow is subject to certain conditions and the satisfaction of specified financial covenants, which credit facility was subsequently amended.

	Allocation of Fair Value to Acquired Properties

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	Revenue and Cost Recognition of Third Party Development and Management Services

	Student Housing Rental Revenue Recognition and Accounts Receivable

	Long-Lived Assets-Impairment

45

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	Long-Lived Assets-Held For Sale

	•	Management, having the authority to approve the action, commits to a plan to sell the asset;
	•	The asset is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets;
	•	An active program to locate a buyer and other actions required to complete the plan to sell the asset have been initiated;
	•	The sale of the asset is probable, and transfer of the asset is expected to qualify for recognition as a completed sale, within one year;
	•	The asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and
	•	Actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.

	Discontinued Operations

	Construction Property Savings and Fire Proceeds

46

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			Three Months Ended
			March 31,
			2005				2004				Change ($)				Change (%)
Revenues:
	Owned off-campus properties		$	12,489			$	7,989			$	4,500				56.3	%
	On-campus participating properties			5,493				5,293				200				3.8	%
	Third party development and management services			1,355				2,070				(715	)			(34.5	)%
	Resident services			204				—				204				100.0	%
Total revenues				19,541				15,352				4,189				27.3	%
Operating Expenses:
	Owned off-campus properties			5,136				3,459				1,677				48.5	%
	On-campus participating properties			1,875				1,800				75				4.2	%
	Third party development and management services			1,464				1,264				200				15.8	%
	General and administrative			1,364				453				911				201.1	%
	Depreciation and amortization			3,424				2,259				1,165				51.6	%
	Ground/facility leases			212				141				71				50.4	%
Total operating expenses				13,475				9,376				4,099				43.7	%
Operating income				6,066				5,976				90				1.5	%
Nonoperating income and (expenses):
	Interest income			58				13				45				346.2	%
	Interest expense			(3,808	)			(4,281	)			473				(11.0	)%
	Amortization of deferred financing costs			(246	)			(144	)			(102	)			70.8	%
	Other nonoperating income			430				—				430				100.0	%
Total nonoperating expenses				(3,566	)			(4,412	)			846				(19.2	)%
Income before income tax provision, minority interests, and discontinued operations				2,500				1,564				936				59.8	%
Income tax provision				(102	)			—				(102	)			(100.0	)%
Minority interests				(87	)			21				(108	)			(514.3	)%
Income from continuing operations				2,311				1,585				726				45.8	%
Discontinued operations:
	Loss attributable to discontinued operations			(2	)			(55	)			53				(96.4	)%
	Gain from disposition of real estate			5,883				—				5,883				100.0	%
Total discontinued operations				5,881				(55	)			5,936				10,792.7	%
Net income			$	8,192			$	1,530			$	6,662				435.4	%

	Owned Off-Campus Properties Operations

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	On-Campus Participating Properties (“OCPP”) Operations

	Third Party Development and Management Services

48

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	Resident Services

	General and Administrative

49

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	Depreciation and Amortization

	Interest Expense

	Other Income

	Income Tax

	Minority Interests

50

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	Discontinued Operations

51

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				Year Ended December 31,
				2004				2003				Change ($)				Change (%)
Revenues:
	Owned off-campus properties			$	35,115			$	31,514			$	3,601				11.4	%
	On-campus participating properties				17,418				16,482				936				5.7	%
	Third party development and management services				7,908				9,128				(1,220	)			(13.4	)%
	Resident services				382				12				370				3,083.3	%
Total revenues					60,823				57,136				3,687				6.5	%
Operating Expenses:
	Owned off-campus properties				16,861				15,272				1,589				10.4	%
	On-campus participating properties				7,900				7,925				(25	)			(0.3	)%
	Third party development and management services				5,543				5,389				154				2.9	%
	General and administrative				5,234				2,749				2,485				90.4	%
	Depreciation and amortization				9,973				8,868				1,105				12.5	%
	Ground/facility leases				812				489				323				66.1	%
Total operating expenses					46,323				40,692				5,631				13.8	%
Operating income					14,500				16,444				(1,944	)			(11.8	)%
Nonoperating income and (expenses):
	Interest income				82				71				11				15.5	%
	Interest expense				(16,698	)			(16,940	)			242				(1.4	)%
	Amortization of deferred financing costs				(1,211	)			(558	)			(653	)			117.0	%
	Other nonoperating income				927				—				927				100.0	%
Total nonoperating expenses					(16,900	)			(17,427	)			527				(3.0	)%
Loss before income tax benefit, minority interests, and discontinued operations					(2,400	)			(983	)			(1,417	)			144.2	%
Income tax benefit					728				—				728				100.0	%
Minority interests					100				16				84				525.0	%
Loss from continuing operations					(1,572	)			(967	)			(605	)			62.6	%
Discontinued operations:
	Income attributable to discontinued operations				272				7				265				3,785.7	%
	(Loss) gain from disposition of real estate				(39	)			16				(55	)			(343.8	)%
Total discontinued operations					233				23				210				913.0	%
		Net loss		$	(1,339	)		$	(944	)		$	(395	)			41.8	%

	Owned Off-Campus Properties Operations

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	OCPP Operations

	Third Party Development and Management Services

53

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	Resident Services

	General and Administrative

54

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	Depreciation and Amortization

	Interest Expense

	Other Income

	Discontinued Operations

55

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				Year Ended December 31,
				2003				2002				Change ($)				Change (%)
Revenues:
	Owned off-campus properties			$	31,514			$	29,997			$	1,517				5.1	%
	On-campus participating properties				16,482				16,055				427				2.7	%
	Third party development and management services				9,128				6,019				3,109				51.7	%
	Resident services				12				60				(48	)			(80.0	)%
Total revenues					57,136				52,131				5,005				9.6	%
Operating Expenses:
	Owned off-campus properties				15,272				14,856				416				2.8	%
	On-campus participating properties				7,925				8,101				(176	)			(2.2	)%
	Third party development and management services				5,389				4,441				948				21.3	%
	General and administrative				2,749				1,995				754				37.8	%
	Depreciation and amortization				8,868				8,077				791				9.8	%
	Ground/facility leases				489				643				(154	)			(24.0	)%
Total operating expenses					40,692				38,113				2,579				6.8	%
Operating income					16,444				14,018				2,426				17.3	%
Nonoperating income and (expenses):
	Interest income				71				166				(95	)			(57.2	)%
	Interest expense				(16,940	)			(16,421	)			(519	)			3.2	%
	Amortization of deferred financing costs				(558	)			(546	)			(12	)			2.2	%
Total nonoperating expenses					(17,427	)			(16,801	)			(626	)			3.7	%
Loss before minority interests and discontinued operations					(983	)			(2,783	)			1,800				(64.7	)%
Minority interests					16				30				(14	)			(46.7	)%
Loss from continuing operations					(967	)			(2,753	)			1,786				(64.9	)%
Discontinued operations:
	Income attributable to discontinued operations				7				319				(312	)			(97.8	)%
	Gain from disposition of real estate				16				295				(279	)			(94.6	)%
Total discontinued operations					23				614				(591	)			(96.3	)%
		Net loss		$	(944	)		$	(2,139	)		$	1,195				(55.9	)%

	Owned Off-Campus Properties Operations

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	OCPP Operations

	Third Party Development and Management Services

57

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	General and Administrative

	Depreciation and Amortization

	Interest Expense

	Discontinued Operations

	Operating Activities

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	Investing Activities

			Three Months Ended
			March 31,
			2005				2004
Property acquisitions			$	(72,763	)		$	—
Property dispositions				28,023				—
Capital expenditures for on-campus participating properties				(28	)			(124	)
Capital expenditures for owned off-campus properties				(852	)			(168	)
Investments in on-campus participating properties under development				(3,027	)			—
Investment in owned off-campus properties under development				(10,120	)			(18,866	)
Purchase of corporate furniture, fixtures and equipment				(86	)			(55	)
	Total		$	(58,853	)		$	(19,213	)

	Financing Activities

	Operating Activities

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	Investing Activities

			Year Ended December 31,
			2004				2003
Property dispositions/ transfers to University			$	—			$	(7,976	)
Capital expenditures for on-campus participating properties				(1,045	)			(406	)
Capital expenditures for owned off-campus properties				(7,674	)			(3,775	)
Investments in on-campus participating properties under development				(836	)			(3,382	)
Investments in owned off-campus properties under development				(53,446	)			(18,002	)
Purchase of corporate furniture, fixtures, and equipment				(620	)			(197	)
	Total		$	(63,621	)		$	(33,738	)

	Financing Activities

	Operating Activities

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	Investing Activities

			Year Ended December 31,
			2003				2002
Property dispositions/ transfers to University			$	(7,976	)		$	—
Capital expenditures for on-campus participating properties				(406	)			(396	)
Capital expenditures for owned off-campus properties				(3,775	)			(2,024	)
Investments in on-campus participating properties under development				(3,382	)			—
Investments in owned off-campus properties under development				(18,002	)			(18,877	)
Purchase of corporate furniture, fixtures, and equipment				(197	)			(381	)
	Total		$	(33,738	)		$	(21,678	)

	Financing Activities

	Cash Balances and Liquidity

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	Revolving Credit Facility

	Distributions

	Distributions to Owners of the Predecessor Entities

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	Recurring Capital Expenditures

	Pre-Development Expenditures

	Indebtedness

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Per Annum

(in thousands)

Interest

Balance as of

Properties

Original Date

Rate

Maturity Date

March 31, 2005

University Village at Boulder Creek

12/01/2002

5.71%

Nov 2012

$

16,479

River Club Apartments

07/28/2000

8.18%

Aug 2010

18,482

River Walk Townhomes

08/31/1999

8.00%

Sep 2009

7,660

Village at Alafaya Club

07/11/2000

8.16%

Aug 2010(1)

20,418

Village at Blacksburg

12/15/2000

7.50%

Jan 2011

21,287

Commons on Apache

05/14/1999

7.66%

Jun 2009

7,635

Callaway House

03/30/2001

7.10%

Apr 2011

19,661

University Club Tallahassee

11/01/2002

7.99%

Oct 2010

13,537

The Grove at University Club

04/01/2003

5.75%

Mar 2013

4,389

College Club Tallahassee

01/01/2003

6.74%

Dec 2011

8,885

University Club Gainesville

11/01/1999

7.88%

Nov 2009

8,518

City Parc at Fry Street

10/05/2004

5.96%

Sep 2014

11,776

Exchange at Gainesville (to be renamed)

03/29/2005

5.13%

Sep 2005(2)

37,400

Total

$

196,127

(1)	Represents the Anticipated Repayment Date, as defined in the loan agreement. If the loan is not repaid on the Anticipated Repayment Date, then certain monthly payments, including excess cash flow, as defined, become due during the remaining term of the loan until the maturity date of August 2030.
(2)	This bridge loan was refinanced in May 2005 by entering into a permanent mortgage loan in the amount of $38.8 million at a fixed rate of 5.2% per annum.

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									(in thousands)
			Original		Original		Maturity		Balance as of
Properties			Date		Term		Date		March 31, 2005
University Village-PVAMU(1)			Sep 1999		24 years		Sep 2023		$	30,851
University Village-TAMIU(1)			Sep 1999		24 years		Sep 2023			4,719
University College-PVAMU (Phase I)(2)			May 2001		22 years		Aug 2025			19,855
University College-PVAMU (Phase II)(2)			Jul 2003		25 years		Aug 2028			4,230
	Total								$	59,655

(1)	Part of combined bond issuance. Separate loan agreements are not cross-collateralized or cross-defaulted.
(2)	Two financings of the University College-PVAMU facility. The two phases of this property were placed in service in 2000 and 2003.

		Total				2005				2006				2007				2008				2009				Thereafter
Long-term debt(1)		$	345,771			$	30,368			$	17,795			$	28,867			$	32,626			$	29,362			$	206,753
Operating leases(2)			9,810				527				509				482				478				480				7,334
Capital leases			715				275				182				135				95				28				—
Owned off-campus development project(3)			24,977				24,977				—				—				—				—				—
Severance agreement			625				455				170				—				—				—				—
		$	381,898			$	56,602			$	18,656			$	29,484			$	33,199			$	29,870			$	214,087

(1)	Long-term debt obligations reflect the payment of both principal and interest. For long-term obligations with a variable interest rate, the rate in effect at December 31, 2004 was assumed to remain constant over all periods presented.
(2)	Includes minimum annual lease payments of $0.1 million required through 2079 under the ground lease for University Village at TU.
(3)	Consists of the completion costs related to University Village at Sweet Home, which is scheduled to be completed in August 2005. We have entered into a contract with a general contractor for certain phases of the construction of this project. However, this contract does not generally cover all of the costs that are necessary to place the property into service, including the cost of furniture and marketing and leasing costs. The unfunded commitments presented include all such costs, not only those costs that we are obligated to fund under the construction contract. This amount does not include completion costs related to Cullen Oaks Phase II, which is funded through the construction loan described above.

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			Three Months Ended																Year Ended
			March 31,																December 31,
											Period from				Period from
			2005				2004				8/17/04 to 12/31/04				1/1/04 to 8/16/04				2003				2002
Net income (loss)			$	8,192			$	1,530			$	1,802			$	(3,141	)		$	(944	)		$	(2,139	)
Minority interests				87				(21	)			29				(129	)			(16	)			(30	)
(Gain) loss from dispositions of real estate				(5,883	)			—				—				39				(16	)			(295	)
Real estate related depreciation and amortization:
	Total depreciation and amortization			3,424				2,259				4,158				5,815				8,868				8,077
	Discontinued operations depreciation and amortization			—				87				152				219				346				334
	Furniture, fixtures and equipment depreciation			(98	)			(69	)			(154	)			(181	)			(277	)			(178	)
Funds from operations (“FFO”)			$	5,722			$	3,786			$	5,987			$	2,622			$	7,961			$	5,769
FFO per share— basic			$	0.45							$	0.48
FFO per share— diluted			$	0.45							$	0.47
Weighted average common shares outstanding:
	Basic			12,622,145								12,513,130
	Diluted			12,769,939								12,634,130

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			Three Months Ended																Year Ended
			March 31,																December 31,
											Period from				Period from
			2005				2004				8/17/04 to 12/31/04				1/1/04 to 8/16/04				2003				2002
Funds from operations			$	5,722			$	3,786			$	5,987			$	2,622			$	7,961			$	5,769
Elimination of operations of on-campus participating properties:
	Net (income) loss from on-campus participating properties			(1,310	)			(1,285	)			(1,023	)			753				(187	)			(197	)
	Amortization of investment in on-campus participating properties			(879	)			(854	)			(1,309	)			(2,222	)			(3,270	)			(3,158	)
				3,533				1,647				3,655				1,153				4,504				2,414
Modifications to reflect operational performance of on-campus participating properties:
	Our share of net cash flow(1)			212				175				214				583				471				651
	Management fees			263				273				371				489				809				796
	On-campus participating properties development fees(2)			230				—				15				—				—				—
Impact of on-campus participating properties				705				448				600				1,072				1,280				1,447
Funds from operations-modified for operational performance of on-campus participating properties (“FFOM”)			$	4,238			$	2,095			$	4,255			$	2,225			$	5,784			$	3,861
FFOM per share— basic			$	0.34							$	0.34
FFOM per share— diluted			$	0.33							$	0.34
Weighted average common shares outstanding:
	Basic			12,622,145								12,513,130
	Diluted			12,769,939								12,634,130

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(1)	50% of the properties’ net cash available for distribution after payment of operating expenses, debt service (including repayment of principal) and capital expenditures. Amounts represent actual cash received for the year-to-date periods and amounts accrued for the interim periods. As a result of using accrual-based results in interim periods and cash-based results for year-to-date periods, the sum of reported interim results may not agree to annual cash received.
(2)	Development and construction management fees related to the Cullen Oaks Phase II on-campus participating property.

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	Acquisitions

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	Owned Development Activities

	Senior Management Restructuring

	•	James C. Hopke, Jr. rejoined our Company and was appointed as Executive Vice President and Chief Investment Officer;
	•	Brian B. Nickel, our former Executive Vice President, Chief Investment Officer and Secretary, was appointed as Executive Vice President, Chief Financial Officer and Secretary;
	•	Jonathan Graf, our former Vice President and Controller, was promoted to Senior Vice President, Chief Accounting Officer and Treasurer;

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	•	Greg A. Dowell, our former Senior Vice President and Chief of Operations, was promoted to Executive Vice President and Chief of Operations; and
	•	Kim K. Voss, our former Assistant Controller, was promoted to Vice President and Controller.

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						Change				% Change
Rank				State		(2000-2010)				(2000-2010)
	1			California			1,196,012				38.2	%
	2			Texas			395,320				18.6	%
	3			New York			302,794				18.6	%
	4			Florida			274,826				21.9	%
	5			Massachusetts			142,520				26.0	%
	6			Georgia			134,177				16.9	%
	7			North Carolina			131,863				18.2	%
	8			Virginia			122,361				18.5	%
	9			New Jersey			105,659				15.1	%
	10			Illinois			97,118				8.3	%
	11			Arizona			96,911				20.8	%
	12			Maryland			94,938				20.3	%
	13			Pennsylvania			85,846				8.1	%
	14			Washington			73,766				13.2	%
	15			Tennessee			55,653				10.2	%
	16			Connecticut			53,506				19.4	%
	17			South Carolina			49,999				13.6	%
	18			Colorado			49,826				12.0	%
	19			Michigan			38,027				4.1	%
	20			Alabama			35,155				8.1	%
				National Average			70,067				14.8	%

	•	Student housing is our core business. We have expertise in the unique and specialized aspects of the student housing industry and focus on student housing as our core business. We are a fully integrated organization, which is capable of conducting market analysis, administering the entitlement and municipal approval process, coordinating product design, securing financing, administering the development process and providing construction management, leasing and property management services. Since our inception in 1993, we have been one of the most active

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		companies in the sector as we have been involved in the development, acquisition, ownership and/or management of more than 62 student housing properties containing more than 38,200 beds.
	•	One of the industry’s most experienced teams. Collectively throughout their individual careers, the seven members of our senior management team have been involved in the development, acquisition or management of more than 114 student housing properties containing more than 73,500 beds at 78 colleges and universities. Our corporate team of student housing professionals have participated in every functional aspect of the ownership, acquisition, development and management of student housing. Six corporate employees at the level of Vice President or above, including our CEO, began their careers in student housing as resident assistants while in college, providing us with a comprehensive understanding of the operational aspects of the student housing business. We believe that this history of experience provides a base of knowledge that has facilitated building a company with substantial operating and development expertise in the student housing industry.
	•	High quality student housing properties. As of March 31, 2005, our properties had an average age of only 4.7 years. Our properties are located in close proximity to, and in the case of our on-campus participating properties on the grounds of, major colleges and universities. Our typical units include private bedrooms, private or semi-private bathrooms, living rooms and full kitchens with modern appliances. Our properties typically offer extensive amenities and services, including swimming pools, basketball, sand volleyball and/or tennis courts and clubhouses with fitness centers, recreational rooms and computer labs, in an academically oriented environment that parents appreciate. Each of our properties is managed and cared for by our trained on-site staff— managers, maintenance, business personnel and resident assistants.
	•	Extensive network of university and college relationships. This network provides us with acquisition, development and management opportunities. Our clients have included some the nation’s most prominent systems of higher education, including the State University of New York System, the University of California System, the Texas A&M University System, the Texas State University System, the University of Georgia System, the University of North Carolina System, the Purdue University System, the University of Colorado System and the Arizona State University System.
	•	Industry innovators. With nearly $1 billion of development completed or in progress and in excess of $300 million of properties acquired over the last decade, we have led the industry in evolving student housing in the areas of product design concepts, site planning, unit plans and amenity offerings. We have also developed and implemented specialized student housing investment and operating systems and have created a proprietary lease administration and marketing software customized for student housing that enables us to quickly identify and respond to market changes and trends.

	•	developing and acquiring owned off-campus student housing communities that meet our focused investment criteria;
	•	maximizing the profitability of our owned and third-party managed properties through proactive marketing, management and asset preservation strategies; and
	•	continuing to grow our third-party development and management services businesses to generate cash flow and build our national reputation among colleges and universities.

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	Follow a Disciplined Off-Campus Acquisition and Development Strategy

	Property Factors

	•	Proximity to campus
	•	Unit mix compared to competition
	•	Marketability of floor plans compared to competition
	•	Quality and marketability of amenity offering compared to competition
	•	Total housing cost to residents compared to each direct competitor
	•	Age of the structure
	•	Quality of construction and impact related to ongoing capital expenditures
	•	Quality of furniture, fixtures and equipment and impact on ongoing capital expenditures
	•	Condition and extraordinary cost impacts related to mechanical and physical plant systems
	•	Operational and marketing inefficiencies and identification of areas for improvement
	•	Internet, communications and entertainment features incorporated into the structure
	•	Reputation of the property and competitor properties among students and key university offices

	University Factors

	•	Size of college or university
	•	Enrollment characteristics and growth projections
	•	Percent of students housed on-campus
	•	On-campus housing requirements and policies
	•	On-campus housing products and pricing
	•	Development plans for future housing
	•	University’s admission policy and expected changes to such policies
	•	Presence of university services/programs that enable establishing formal relationships

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	Market Factors

	•	Fundamentals of the overall local housing market
	•	Fundamentals of student housing submarkets
	•	Nature of direct competitors and their product offering
	•	Impact of greater housing market on each student housing submarket
	•	Barriers to entry in each student housing submarket
	•	Student preferences related to each student housing submarket
	•	Planned or potential future student housing development

	Maximize Property-Level Profitability

	•	establishing internal controls and procedures for cost control consistently throughout our communities;
	•	appropriately staffing our properties at the site-level, minimizing multiple layers of management and increasing effectiveness;
	•	negotiating utility and service-level pricing arrangements with national and regional vendors and requiring corporate-level approval of service agreements for each community; and
	•	conducting analysis of the costs and effectiveness of each of our marketing programs via our proprietary LAMS system.

	Utilize our Proprietary Marketing Systems

	•	a fully integrated prospect tracking and follow-up system. Prospect information from all types of inquiries— walk-in, telephone, web site/email, or fax— is recorded and entered into the LAMS database, and an aggressive, fully-automated follow-up and tracking program is then implemented,

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		with LAMS generating follow-up labels and electronic communications and disseminating marketing messages.
	•	a built-in marketing effectiveness program to measure the success of our marketing efforts on a real time basis. LAMS generates a weekly traffic analysis that shows the quantity of each type of inquiry received for that period as well as the marketing medium that generated each piece of traffic. In addition, LAMS generates a period-to-period comparative traffic and leasing analysis that allows us to compare the pace of the current year’s traffic and leasing activity to that of previous years. This enables us to track the effectiveness of each marketing program being utilized and to respond accordingly.
	•	a real-time monitor of lease closings and leasing terms. LAMS automatically generates closing reports allowing us to measure the staff’s closing ratios. The closing ratios are calculated by LAMS on an individual basis so that we may better evaluate performance and optimize our staffing. LAMS generates application and leasing status reports that detail the current period and year-to-date status of applications and leasing broken down by type of accommodation. This enables us to quickly identify potential problems related to pricing and/or desirability of our various types of accommodations and to respond accordingly.
	•	an automated lease generation system. Each property’s lease term and rental rate information is set up in LAMS by authorized corporate staff. This enables the corporate office to maintain tight controls on pricing changes and special promotions. LAMS generates each resident lease, eliminating the potential for manual errors of our on-site staff.

	Capitalize on our Unique Understanding of Student Housing

	Build Products that Meet Students’ Expectations

	Build a Sense of Community Through Design

	Proactively Manage Leasing Cycles and Annual Turnover

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	Manage Individual Lease Liability and Accounts Receivables

	Dispel the “Animal House” Myth

	Maintain Communities Conducive to Academic Achievement

	Develop and Retain Personnel

	Maintain and Develop Strategic Relationships

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	Efficiently Manage the Unique Structure of our Leases

	Owned Off-Campus Properties

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	On-Campus Participating Properties

	•	a term of 30-40 years, subject to early termination upon repayment of the mortgage financing, which generally has a 25-year amortization;
	•	ground/facility lease rent of a nominal amount (e.g., $100 per annum over the lease term) plus 50% of net cash available for distribution;
	•	the right of first refusal by the educational institution to purchase our leasehold interest in the event we propose to sell it to any third party;
	•	an obligation by the educational institution to promote the project, include information relative to the project in brochures and mailings and to permit us to advertise the project;
	•	the requirement to receive the educational institution’s consent to increase rental rates by a percentage greater than the percentage increase in our property operating expenses plus the amount of any increases in debt service; and
	•	the option of the educational institution to purchase our interest in and assume management of the facility, with the purchase price calculated at the discounted present cash value of our leasehold interest.

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	Third Party Services

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											Balance to be
							Fees Previously				Earned and
			Total Contractual				Earned and				Recognized in				Scheduled
Property			Fee Amount				Recognized				2005 and 2006				Completion
Saint Leo University Phase II			$	375			$	199			$	176				Aug 2005
Vista del Campo Phase II				3,501				168				3,333				Aug 2006
West Virginia University— pre-development services				400	(1)			370				30				Jun 2005
Fenn Tower Renovation				1,509				10				1,499				Aug 2006
Lamar University Dining Hall				110				22				88				Nov 2005
	Total		$	5,895			$	769			$	5,126

(1)	Net of approximately $0.6 million of costs anticipated to be incurred to complete the project.

	Competition from Universities and Colleges

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	Competition from Public and Private Owners

	•	The Callaway House, in which we own an 80% partnership interest and are entitled to significant preferred distributions;
	•	University Village at TU, which is subject to a 75-year ground lease from Temple University (with four additional six-year extensions); and
	•	Five on-campus participating properties held under ground/facility leases with two university systems.

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		Year
		Acquired/								Occupancy
Property		Developed		Location				Primary University Served		Rates (1)				Units				Beds
Off-Campus Properties:
1. Commons On Apache		1999			Tempe, AZ			Arizona State University Main Campus			100.0	%			111				444
2. The Village at Blacksburg		2000			Blacksburg, VA			Virginia Polytechnic Institute and State University			98.6	%			288				1,056
3. The Village on University		1999			Tempe, AZ			Arizona State University Main Campus			99.1	%			288				918
4. River Club Apartments		1999			Athens, GA			The University of Georgia– Athens			95.5	%			266				794
5. River Walk Townhomes		1999			Athens, GA			The University of Georgia– Athens			97.1	%			100				340
6. The Callaway House(2)		2001			College Station, TX			Texas A&M University			101.3	%			173				538
7. The Village at Alafaya Club		2000			Orlando, FL			The University of Central Florida			97.4	%			228				840
8. The Village at Science Drive		2001			Orlando, FL			The University of Central Florida			99.3	%			192				732
9. University Village at Boulder Creek		2002			Boulder, CO			The University of Colorado at Boulder			87.7	%			82				309
10. University Village at Fresno		2004			Fresno, CA			California State University, Fresno			98.8	%			105				406
11. University Village at TU		2004			Philadelphia, PA			Temple University			98.8	%			220				749
12. University Village at Sweet Home(3)		2005			Amherst, NY			State University of New York– Buffalo			—				269				828
13. University Club Tallahassee		2005			Tallahassee, FL			Florida State University			93.4	%			152				608
14. The Grove at University Club		2005			Tallahassee, FL			Florida State University			98.4	%			64				128
15. College Club Tallahassee		2005			Tallahassee, FL			Florida A&M University			92.4	%			96				384
16. The Greens at College Club		2005			Tallahassee, FL			Florida A&M University			96.9	%			40				160
17. University Club Gainesville		2005			Gainesville, FL			University of Florida			98.9	%			94				376
18. City Parc at Fry Street		2005			Denton, TX			University of North Texas			94.7	%			136				418
19. Exchange at Gainesville (to be renamed)		2005			Gainesville, FL			University of Florida			95.6	%			396				1,044
Total off-campus properties											97.2	%			3,300				11,072
On-Campus Participating Properties:
20. University Village– PVAMU		1996/97/98			Prairie View, TX			Prairie View A&M University			93.0	%			612				1,920
21. University College– PVAMU		2000/2003			Prairie View, TX			Prairie View A&M University			95.0	%			756				1,470
22. University Village– TAMIU		1997			Laredo, TX			Texas A&M International University			70.2	%			84				252
23. Cullen Oaks Phase I		2001			Houston, TX			The University of Houston			99.6	%			231				525
24. Cullen Oaks Phase II(3)		2005			Houston, TX			The University of Houston			—				180				354
Total on-campus participating properties											93.1	%			1,863				4,521
Total– all properties											96.0	%			5,163				15,593

(1)	Occupancy rates are calculated as of March 31, 2005. Occupancy is based on the number of total occupied beds (including beds occupied by staff) divided by total beds.
(2)	Also has a food service facility.
(3)	Currently under development with a scheduled completion date of August 2005.

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			Applications				% of				Applications
			and Leases				Rentable				and Leases				Variance to
			as of				Beds as of				as of				Prior Year												Total
			May 27,				May 27,				May 28,												Rentable				Design
Applications and Leases			2005				2005				2004				Beds				%				Beds(1)				Beds
Commons of Apache				444				100.0	%			444				0				0.0	%			444				444
The Village at Blacksburg				1,034				98.7	%			1,030				4				0.4	%			1,048				1,056
The Village on University				515				56.7	%			656				(141	)			(21.5	)%			909				918
River Club Apartments				719				92.8	%			543				176				32.4	%			775				794
River Walk Townhomes				296				88.9	%			316				(20	)			(6.3	)%			333				340
The Callaway House				642				121.8	%			569				73				12.8	%			527				538
The Village at Alafaya Club				581				70.1	%			586				(5	)			(0.9	)%			829				840
The Village at Science Drive				717				99.3	%			718				(1	)			(0.1	)%			722				732
University Village at Boulder Creek				168				56.2	%			218				(50	)			(22.9	)%			299				309
University Village Fresno				336				84.8	%			218				118				54.1	%			396				406
University Village at TU				728				99.3	%			734				(6	)			(0.8	)%			733				749
University Village at Sweet Home				835				102.2	%			n/a				n/a				n/a				817				828
University Club Tallahassee(2)				744				102.5	%			n/a				n/a				n/a				726				736
College Club Tallahassee(3)				392				73.1	%			n/a				n/a				n/a				536				544
University Club Gainesville				267				71.8	%			n/a				n/a				n/a				372				376
City Parc at Fry Street				196				47.6	%			n/a				n/a				n/a				412				418
Exchange at Gainesville (to be renamed)				949				92.0	%			n/a				n/a				n/a				1,032				1,044
	Total																							10,910				11,072

(1)	Rentable Beds exclude beds needed for on-site staff and/or model units.
(2)	For lease administration purposes, University Club Tallahassee and the Grove at University Club are reported combined.
(3)	For lease administration purposes, College Club Tallahassee and the Greens at College Club are reported combined.

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						Beds/																Monthly Asking
Unit Type		No. Units				Unit				Beds				Unit SF				Total RSF				Rent/Bed*
Four Bedroom/ Four Bath			105				4				420				1,125				118,125			$	645-675
Two Bedroom/ Two Bath (Double Occ.)			49				4				196				682				33,418			$	500
Three Bedroom/ Three Bath			1				3				3				905				905			$	660-690
Two Bedroom/ One Bath			65				2				130				448				29,120			$	625
Total			220								749								181,568

*	Asking prices for 2005/2006 academic year.

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						Beds/																Monthly Asking
Unit Type		No. Units				Unit				Beds				Unit SF				Total RSF				Rent/Bed*
Four Bedroom/ Four Bath			36				4				144				1,355				48,780			$	501
Four Bedroom/ Four Bath			48				4				192				1,313				63,024			$	486
Three Bedroom/ Three Bath			24				3				72				1,083				25,992			$	516
Three Bedroom/ Three Bath			108				3				324				1,040				112,320			$	499
Two Bedroom/ Two Bath			132				2				264				807				106,524			$	532
One Bedroom/ One Bath			48				1				48				554				26,592			$	801
Total			396								1,044								383,232

*	Asking prices for 2005/2006 academic year.

	General

	Americans With Disabilities Act and Federal Fair Housing Act

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	Environmental Matters

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	•	approximately 226 on-site employees in our owned off-campus properties segment, including 78 resident assistants;
	•	approximately 87 on-site employees in our on-campus participating properties segment, including 41 resident assistants;
	•	approximately 394 employees in our third party property management services segment, comprised of 372 on-site employees and resident assistants, and 22 corporate office employees;
	•	approximately 19 corporate office employees in our third party development services segment; and
	•	approximately 37 executive, corporate administration and financial personnel.

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Name		Age				Position
William C. Bayless, Jr.			41			President, Chief Executive Officer and Director
R.D. Burck			72			Chairman of the Board and Independent Director
G. Steven Dawson			47			Independent Director
Cydney Donnell			45			Independent Director
Edward Lowenthal			60			Independent Director
Brian B. Nickel			32			Executive Vice President, Chief Financial Officer, Secretary and Director
Scott H. Rechler			37			Director
Winston W. Walker			61			Independent Director
Greg A. Dowell			41			Executive Vice President and Chief of Operations
James C. Hopke, Jr.			43			Executive Vice President and Chief Investment Officer
Brian N. Winger			37			Senior Vice President–Development
Jason R. Wills			33			Senior Vice President–Marketing and Business Development
Jonathan Graf			40			Senior Vice President, Chief Accounting Officer and Treasurer

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	Audit Committee

	Executive Committee

	Compensation Committee

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	Nominating and Corporate Governance Committee

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															Long-Term
															Compensation
							Annual Compensation
															Restricted Stock
Name and Principal Position			Year				Salary				Bonus				Awards (1)
William C. Bayless, Jr.				2004			$	253,333			$	130,000			$	300,000
	Chief Executive Officer and President			2003				210,000				80,000				—
				2002				200,000				80,000				—
Brian B. Nickel				2004				210,333				115,000				200,000
	Executive Vice President, Chief Financial Officer			2003				175,000				100,000				—
	and Secretary			2002				153,500				155,440				—
Mark J. Hager(2)				2004				162,944				100,000				150,000
	Former Executive Vice President, Chief			2003				132,500				50,000				—
	Financial and Accounting Officer and Treasurer			2002				128,116				40,000				—
Greg A. Dowell				2004				130,000				40,000				50,000
	Executive Vice President and Chief of Operations			2003				124,000				25,000				—
				2002				120,000				20,000				—
Ronnie L. Macejewski(2)				2004				126,690				25,000				24,000
	Former Senior Vice President— Development			2003				123,000				90,000				—
	and Construction			2002				118,976				48,810				—

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(1)	Represents the value, as of February 16, 2005, the date of grant, of restricted stock awards to the Named Executive Officers. Awards to Messrs. Bayless, Nickel and Hager vest in five equal annual installments beginning on February 28, 2006. Awards to Messrs. Dowell and Macejewski vest in three equal annual installments beginning on February 28, 2006, and were forfeited on the date of termination of employment. Dividends on restricted stock awards are paid at the same rate and time as paid to holders of our common stock. No stock appreciation rights were granted and no long-term incentive plan payouts were made in 2004, 2003 or 2002.
(2)	Mr. Macejewski resigned in April 2005 and Mr. Hager resigned as Executive Vice President, Chief Financial and Accounting Officer and Treasurer in May 2005 and will resign as an employee on June 30, 2005.

							Performances				Estimated Future Payouts
			Number of				or Other				Under Non-Stock Price-Based Plans
			Shares,				Period Until
			Units or				Maturation				Threshold				Target				Maximum
Name			Other Rights				or Payout				(# of Shares)				(# of Shares)				(# of Shares)
William C. Bayless, Jr.				48,400				(1)				—				48,400				48,400
	PIU Award			110,305				8/17/07				—				110,305				110,305
	Outperformance Award(2)
Brian B. Nickel				29,040				(1)				—				29,040				29,040
	PIU Award			66,183				8/17/07				—				66,183				66,183
	Outperformance Award(2)
Mark J. Hager				12,100				(1)				—				12,100				12,100
	PIU Award			29,415				8/17/07				—				29,415				29,415
	Outperformance Award(2)
Greg A. Dowell				10,890				(1)				—				10,890				10,890
	PIU Award			29,415				8/17/07				—				29,415				29,415
	Outperformance Award(2)
Ronnie L. Macejewski				9,074				(1)				—				9,074				9,074
	PIU Award			18,384				8/17/07				—				18,384				18,384
	Outperformance Award(2)

(1)	See discussion of “Profits Interest Units” below.
(2)	See discussion of “Outperformance Award” below.

	Restricted Stock and Restricted Stock Units

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	Profits Interest Units

	Outperformance Awards

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	Employment Contracts

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	Non-Competition Agreements

	Indemnification Agreements

	•	the act or omission of the director or executive officer was material to the matter giving rise to the proceeding and was committed in bad faith or was the result of active and deliberate dishonesty;
	•	the director or executive officer actually received an improper personal benefit in money, property or other services; or
	•	with respect to any criminal action or proceeding, the director or executive officer had reasonable cause to believe that his or her conduct was unlawful.

	•	the act or omission of the director or executive officer was material to the matter giving rise to the proceeding and was committed in bad faith or was the result of active and deliberate dishonesty; or
	•	the director or executive officer actually received an improper personal benefit in money, property or other services;

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	•	the court determines that such director or executive officer is entitled to indemnification under the applicable section of the laws of the state of Maryland or Maryland law (which includes without limitation, Maryland General Corporation Law, as amended), in which case the director or executive officer shall be entitled to recover from us the expenses of securing such indemnification; or
	•	the court determines that such director or executive officer is fairly and reasonably entitled to indemnification in view of all of the relevant circumstances, whether or not the director or executive officer has met the standards of conduct set forth in the applicable section of Maryland law or has been adjudged liable for receipt of an improper personal benefit under the applicable section of Maryland law; provided, however, that our indemnification obligations to such director or executive officer will be limited to the expenses actually and reasonably incurred by him or her, or on his or her behalf, in connection with any proceeding by or in the right of our Company or in which the officer or director shall have been adjudged liable for receipt of an improper personal benefit under the applicable section of Maryland law.

	Equity Compensation Plan Information

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Number of

Weighted-

Securities to be

Average Exercise

Number of

Issued Upon

Price of

Securities

Exercise of

Outstanding

Remaining Available

Outstanding

Options,

for Future Issuance

Options, Warrants

Warrants and

Under Equity

Plan Category

and Rights

Rights

Compensation Plans

Equity Compensation Plans Approved by Security Holders(2)

7,145

(1)

$

0

1,202,855

Equity Compensation Plans Not Approved by Security Holders

n/a

n/a

n/a

(1)	Consists of restricted stock units granted to non-employee directors other than Mr. Rechler in connection with our IPO.
(2)	Does not include 121,000 PIUs and 367,682 common stock awards in the form of an outperformance bonus plan. Upon the occurrence of certain events or the achievement of certain performance measures, these awards will be paid to the recipients in either stock or cash, at the discretion of the compensation committee of the board of directors. If these awards were included in the above table, as of December 31, 2004 we would have 714,173 shares available for future issuance under the 2004 incentive award plan.

	•	RAP received a cash payment of approximately $78.5 million for the redemption of its interests in RAP SHP. Additionally, RAP received a final working capital distribution from cash on hand of $1.5 million and $0.2 million in budgeted development fees relating to the construction properties to be paid from the remaining construction budgets.
	•	RAP SHP and an affiliate of RSVP distributed their interests in the entities owning The Village at Riverside to an affiliate of RAP and RSVP, and RAP SHP maintained its guaranty of certain contingent obligations of RAP and RSVP under the non-recourse indebtedness encumbering this property. Subsequent to the IPO, the property was foreclosed upon by the lender.
	•	RAP SHP distributed to entities affiliated with RSVP, RAP and other persons certain assets that we considered to be unrelated to its core business, including a fee title to a parcel of commercially-zoned land that is adjacent to the University Village at San Bernardino and interests

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		in entities that previously developed a residential condominium project adjacent to University Village at Boulder Creek and that currently own one remaining condominium unit in that project.
	•	RAP and RSVP were entitled to $0.4 million, which was paid in February 2005, of savings in the budgeted completion cost of our three owned off-campus construction properties that were completed in Fall 2004, as well as $0.9 million, which was paid in November 2004, of insurance proceeds that we received with respect to the fire at University Village at Fresno. Additionally, upon completion of the construction at University Village at TU, RAP was entitled to receive $0.5 million relating to a construction guarantee fee, which was paid from the remaining construction budget in September 2004.
	•	RSVP granted us an option to acquire its indirect 23% ownership interest in Dobie Center at a price based on a $52.0 million valuation of the property less the then outstanding debt. The option expires in August 2008 but may expire earlier if title to Dobie Center is transferred to a third party.
	•	Reckson and RSVP, through their respective ownership interests in RAP, were entitled to participate in the benefits realized by RAP described above.
	•	We agreed to nominate Mr. Rechler to be a director of our board of directors at our next two annual meetings, subject to his consent and eligibility to serve. Mr. Rechler agreed to waive receipt of any director compensation until such time as he was reelected by our stockholders, which occurred in May 2005.

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	Investment in Real Estate or Interests in Real Estate

	Investments in Real Estate Mortgages

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	Securities of or Interests in Persons Primarily Engaged in Real Estate Activities and Other Issuers

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	•	the material facts relating to the common directorship or interest and as to the transaction are disclosed to our board of directors or a committee of our board, and our board or committee authorizes, approves or ratifies the transaction or contract by the affirmative vote of a majority of disinterested directors, even if the disinterested directors constitute less than a quorum;
	•	the material facts relating to the common directorship or interest and as to the transaction are disclosed to our stockholders entitled to vote thereon, and the transaction is authorized, approved or ratified by a majority of the votes cast by the stockholders entitled to vote; or
	•	the transaction or contract is fair and reasonable to us at the time it is authorized, ratified or approved.

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	•	Redeemed 100% of the ownership interests of the Predecessor Entities in RAP SHP for approximately $80.1 million.
	•	Acquired the minority ownership interest of Titan in certain owned off-campus properties in exchange for approximately $5.7 million.
	•	Repaid certain construction and permanent indebtedness totaling approximately $105.5 million.
	•	Distributed The Village at Riverside and certain other non-core assets to the Predecessor Entities.
	•	Entered into a $75 million senior secured revolving credit facility with affiliates of Citigroup Global Markets Inc. and Deutsche Bank Securities Inc., two of our underwriters, as joint lead arrangers, which credit facility was subsequently amended.

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	•	add to our obligations as general partner or surrender any right or power granted to us as general partner for the benefit of the limited partners;
	•	reflect the issuance of additional units or the admission, substitution, termination or withdrawal of partners in accordance with the terms of the partnership agreement;
	•	reflect a change of an inconsequential nature that does not adversely affect the limited partners in any material respect, or cure any ambiguity, correct or supplement any provisions of the partnership agreement not inconsistent with law or with other provisions of the partnership agreement, or make other changes concerning matters under the partnership agreement that will not otherwise be inconsistent with the partnership agreement or law;
	•	satisfy any requirements, conditions or guidelines contained in any order, directive, opinion, ruling or regulation of a federal or state agency or contained in federal or state law;
	•	reflect changes that are reasonably necessary for us to maintain our status as a REIT; or
	•	modify the manner in which capital accounts are computed.

	•	take any action in contravention of an express prohibition or limitation contained in the partnership agreement;
	•	enter into or conduct any business other than in connection with our role as general partner of the Operating Partnership and our operation as a REIT;
	•	withdraw from the Operating Partnership or transfer any portion of our general partnership interest; or
	•	be relieved of our obligations under the partnership agreement following any permitted transfer of our general partnership interest.

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	(a)	all limited partners will receive, or have the right to elect to receive, for each unit an amount of cash, securities, or other property equal to the product of:

	(i)	the number of shares of our common stock into which each unit is then exchangeable; and
	(ii)	The greatest amount of cash, securities or other property paid to the holder of one share of our common stock in consideration of one share of our common stock pursuant to the termination transaction; or

	(b)	the following conditions are met:

	(i)	substantially all of the assets of the surviving entity are held directly or indirectly by our Operating Partnership or another limited partnership or limited liability company

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		which is the survivor of a merger, consolidation or combination of assets with our Operating Partnership;
	(ii)	the holders of units own a percentage interest of the surviving entity based on the relative fair market value of the net assets of our Operating Partnership and the other net assets of the surviving entity immediately prior to the consummation of this transaction;
	(iii)	the rights, preferences and privileges of such unit holders in the surviving entity are at least as favorable to those in effect immediately prior to the consummation of the transaction and as those applicable to any other limited partners or non-managing members of the surviving entity; and
	(iv)	the limited partners may exchange their interests in the surviving entity for either the consideration available to the common limited partners pursuant to the first paragraph in this section or, if the ultimate controlling person of the surviving entity has publicly traded common equity securities, shares of those common equity securities, at an exchange ratio based on the relative fair market value of those securities and our common stock.

	•	the act or omission of the indemnitee was material to the matter giving rise to the proceeding and either was committed in bad faith or fraud or was the result of active and deliberate dishonesty;
	•	the indemnitee actually received an improper personal benefit in money, property or services; or
	•	in the case of any criminal proceeding, the indemnitee had reasonable cause to believe that the act or omission was unlawful.

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										Shares Beneficially Owned After this Offering
		Shares Beneficially Owned												Percent Before				Percent After
		Prior to this Offering												Exercise of				Exercise of
														Over-allotment				Over-allotment
		Number				Percent				Number(14)				Option				Option
William C. Bayless, Jr.			14,027	(1)			*				62,427	(1)(14)			*				*
R.D. Burck			2,000	(2)			*				2,000	(2)			*				*
G. Steven Dawson			2,000	(2)			*				2,000	(2)			*				*
Cydney Donnell			1,000	(2)			*				1,000	(2)			*				*
Edward Lowenthal			14,000	(2)			*				14,000	(2)			*				*
Brian B. Nickel			9,385	(3)			*				38,425	(3)(14)			*				*
Scott H. Rechler			28,500	(2)			*				28,500	(2)			*				*
Winston W. Walker			—				—				—				—				—
Greg A. Dowell			2,321	(4)			*				13,211	(4)(14)			*				*
FMR Corp.			1,553,990	(5)			12.3	%			1,553,990	(5)			9.7	%			9.4	%
Deutsche Bank AG			1,500,000	(6)			11.9	%			1,500,000	(6)			9.4	%			9.1	%
Clarion CRA Securities, LP			1,283,300	(7)			10.1	%			1,283,300	(7)			8.0	%			7.8	%
LaSalle Investment Management Securities Ltd.			1,022,603	(8)			8.1	%			1,022,603	(8)			6.4	%			6.2	%
Cohen & Steers Capital Management, Inc.			1,007,600	(9)			8.0	%			1,007,600	(9)			6.3	%			6.1	%
K.G. Redding & Associates, LLC			934,500	(10)			7.4	%			934,500	(10)			5.8	%			5.7	%
Morgan Stanley			804,500	(11)			6.4	%			804,500	(11)			5.0	%			4.9	%
AMVESCAP PLC			696,800	(12)			5.5	%			696,800	(12)			4.4	%			4.2	%
All directors and executive officers as a group (13 persons)			77,357	(13)			*				177,183	(13)(14)			1.1	%			1.1	%

	*	Less than one percent.

	(1)	Represents 100 shares of common stock owned directly and 13,927 shares of restricted stock.
	(2)	Represents shares of common stock owned directly.
	(3)	Represents 100 shares of common stock owned directly and 9,285 shares of restricted stock.
	(4)	Represents 2,321 shares of restricted stock.
	(5)	This information is based upon information contained in filings made by the stockholder with the SEC reporting beneficial ownership as of December 31, 2004. The address of FMR Corp. is 82 Devonshire Street, Boston, MA 02109. FMR Corp. possessed sole voting power over 149,900 shares and sole dispositive power over 1,553,990 shares and each of Edward C. Johnson and Abigail P. Johnson possessed sole dispositive power over 1,553,990 shares.
	(6)	This information is based upon information contained in filings made by the stockholder with the SEC reporting beneficial ownership as of December 31, 2004. The address of Deutsche Bank AG is Taunusanlage 12, D-60325, Frankfurt am Main, Federal Republic of Germany. Deutsche Bank AG and RREEF America, L.L.C. each possessed sole voting and sole dispositive power over these

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		shares. Approximately 98% of such shares are owned by registered investment funds managed by RREEF America, L.L.C., which is a registered investment adviser subsidiary of Deutsche Bank AG.

	(7)	This information is based upon information contained in filings made by the stockholder with the SEC reporting beneficial ownership as of December 31, 2004. The address of Clarion CRA Securities, L.P. is 259 North Radnor Chester Road, Suite 205, Radnor, PA 19087.
	(8)	This information is based upon information contained in filings made by the stockholder with the SEC reporting beneficial ownership as of December 31, 2004. The address LaSalle Investment Management Securities, Ltd. is 100 E. Pratt Street, 20th Floor, Baltimore, MD 21202.
	(9)	This information is based upon information contained in filings made by the stockholder with the SEC reporting beneficial ownership as of December 31, 2004. The address of Cohen & Steers Capital Management Inc. is 757 Third Avenue, New York, NY 10017.

(10)	This information is based upon information contained in filings made by the stockholder with the SEC reporting beneficial ownership as of December 31, 2004. The address of K.G. Redding & Associates, LLC is One North Wacker Drive, Suite 4343, Chicago, IL 60606. K.G. Redding & Associates, LLC possessed sole voting power over 157,400 shares and sole dispositive power over 934,500 shares.
(11)	This information is based upon information contained in filings made by the stockholder with the SEC reporting beneficial ownership as of December 31, 2004. The address of Morgan Stanley is 1585 Broadway, New York, NY 10036. Morgan Stanley beneficially owned an aggregate of 804,500 shares and possessed sole voting and sole dispositive power over 585,000 shares, and Morgan Stanley Investment Management Inc. beneficially owned an aggregate of 760,800 shares and possessed sole voting and sole dispositive power over 558,400 shares.
(12)	This information is based upon information contained in filings made by the stockholder with the SEC reporting beneficial ownership as of December 31, 2004. The address of AMVESCAP PLC is 11 Devonshire Square, London EC2M 4YR, England.
(13)	Represents 48,900 shares of common stock owned directly and 28,457 shares of restricted stock.
(14)	Includes the following units owned as a result of this Offering constituting a book-up event for purposes of the PIUs and the PIUs achieving full parity with common units. Each common unit is redeemable for cash based on the fair market value of a share of our common stock, or, at our election, one share of our common stock.

Name		Number of PIUs
William C. Bayless, Jr.			48,400
Brian B. Nickel			29,040
Greg A. Dowell			10,890
All directors and executive officers as a group (13 persons)			99,826

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	•	determines that such ownership will not cause any individual’s beneficial ownership of shares of our stock to violate the ownership limit and that any exemption from the ownership limit will not jeopardize our status as a REIT; and
	•	determines that such stockholder does not and will not own, actually or constructively, an interest in a tenant of ours (or a tenant of any entity whose operations are attributed in whole or in part to us) that would cause us to own, actually or constructively, more than a 9.8% interest (as set forth in Section 856(d)(2)(B) of the Code) in such tenant or that any such ownership would not cause us to fail to qualify as a REIT under the Code.

	•	any person from beneficially or constructively owning shares of our stock that would result in our being “closely held” under Section 856(h) of the Code or otherwise cause us to fail to qualify as a REIT; and
	•	any person from transferring shares of our stock if such transfer would result in shares of our stock being beneficially owned by fewer than 100 persons (determined without reference to any rules of attribution).

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	•	to rescind as void any vote cast by a purported record transferee prior to our discovery that the shares have been transferred to the trust; and
	•	to recast the vote in accordance with the desires of the trustee acting for the benefit of the beneficiary of the trust.

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	•	the merger will merge one of our 90% or more owned subsidiaries into us without amending our charter other than in limited respects and without altering the contract rights of the stock of the subsidiary (in which case only the approval of our board of directors and the board of directors of the subsidiary is necessary);
	•	we are the successor corporation in a share exchange (in which case only the approval of our board of directors is necessary); or
	•	we are the survivor in the merger and the merger does not change the terms of any class or series of our outstanding stock, or otherwise amend our charter, and the number of shares of stock of each class or series outstanding immediately before the merger does not increase by more than 20% of the number of shares of each such class or series of stock that was outstanding immediately prior to effectiveness of the merger (in which case only the approval of our board of directors is necessary).

	•	pursuant to our notice of the meeting;
	•	by or at the direction of our board of directors; or
	•	by a stockholder who is entitled to vote at the meeting and has complied with the advance notice procedures set forth in our bylaws.

	•	pursuant to our notice of the meeting;
	•	by or at the direction of our board of directors; or
	•	provided that our board of directors has determined that directors will be elected at such meeting, by a stockholder who is entitled to vote at the meeting and has complied with the advance notice provisions set forth in our bylaws.

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	•	any present or former director or officer who is made a party to the proceeding by reason of his or her service in that capacity; or
	•	any individual who, while a member of our board and at our request, serves or has served another corporation, real estate investment trust, partnership, joint venture, trust, employee benefit plan or any other enterprise as a director, officer, partner or trustee of such corporation, real estate investment trust, partnership, joint venture, trust, employee benefit plan or other enterprise and who is made a party to the proceeding by reason of his or her service in that capacity.

	•	the act or omission of the director or officer was material to the matter giving rise to the proceeding and:

	•	was committed in bad faith; or
	•	was the result of active and deliberate dishonesty;

	•	the director or officer actually received an improper personal benefit in money, property or services; or
	•	in the case of any criminal proceeding, the director or officer had reasonable cause to believe that the act or omission was unlawful.

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	•	a written affirmation by the director or officer of his good faith belief that he has met the standard of conduct necessary for indemnification by the corporation; and
	•	a written undertaking by the director or by another on the director’s behalf to repay the amount paid or reimbursed by the corporation if it is ultimately determined that the director did not meet the standard of conduct.

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	•	1% of the shares of our common stock then outstanding, which will equal approximately 166,150 shares immediately after this Offering (171,900 shares if the underwriters exercise their overallotment option in full); or
	•	the average weekly trading volume of our common stock on the NYSE during the four calendar weeks preceding the date on which notice of the sale is filed with the SEC.

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	•	dealers in securities or currencies;
	•	traders in securities that elect to use a mark-to-market method of accounting for their securities holdings;
	•	banks and other financial institutions;
	•	tax-exempt organizations (except to the limited extent discussed in “—Taxation of Tax-Exempt Stockholders”);
	•	certain insurance companies;
	•	persons liable for the alternative minimum tax;
	•	persons that hold common stock as a hedge against interest rate or currency risks or as part of a straddle or conversion transaction;
	•	non-U.S. individuals and foreign corporations (except to the limited extent discussed in “—Taxation of Non-U.S. Stockholders”); and
	•	stockholders whose functional currency is not the U.S. dollar.

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	•	First, we will have to pay tax at regular corporate rates on any undistributed real estate investment trust taxable income, including undistributed net capital gains.
	•	Second, under certain circumstances, we may have to pay the alternative minimum tax on items of tax preference.
	•	Third, if we have (a) net income from the sale or other disposition of “foreclosure property,” as defined in the Code, which is held primarily for sale to customers in the ordinary course of business or (b) other non- qualifying income from foreclosure property, we will have to pay tax at the highest corporate rate on that income.
	•	Fourth, if we have net income from “prohibited transactions,” as defined in the Code, we will have to pay a 100% tax on that income. Prohibited transactions are, in general, certain sales or other dispositions of property, other than foreclosure property, held primarily for sale to customers in the ordinary course of business. We do not intend to engage in prohibited transactions. We cannot assure you, however, that we will only make sales that satisfy the requirements of the safe harbors or that the IRS will not successfully assert that one or more of such sales are prohibited transactions.
	•	Fifth, if we should fail to satisfy the 75% gross income test or the 95% gross income test, as discussed below under “—Requirements for Qualification,” but we have nonetheless maintained our qualification as a REIT because we have satisfied other requirements necessary to maintain REIT qualification, we will have to pay a 100% tax on an amount equal to (a) the gross income attributable to the greater of (i) 75% of our gross income over the amount of gross income that is qualifying income for purposes of the 75% test, and (ii) 95% of our gross income over the amount of gross income that is qualifying income for purposes of the 95% test, multiplied by (b) a fraction intended to reflect our profitability.
	•	Sixth, beginning in the 2005 taxable year, if we fail, in more than a de minimis fashion, to satisfy one or more of the asset tests under the REIT provisions of the Code for any quarter of a taxable year, but nonetheless continue to qualify as a REIT because we qualify under certain relief provisions, we will likely be required to pay a tax of the greater of $50,000 or a tax computed at the highest corporate rate on the amount of net income generated by the assets causing the failure from the date of failure until the assets are disposed of or we otherwise return to compliance with the asset test.

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	•	Seventh, beginning in the 2005 taxable year, if we fail to satisfy one or more of the requirements for REIT qualification under the REIT provisions of the Code (other than the income tests or the asset tests), we nevertheless may avoid termination of our REIT election in such year if the failure is due to reasonable cause and not due to willful neglect and we pay a penalty of $50,000 for each failure to satisfy the REIT qualification requirements.
	•	Eighth, if we should fail to distribute during each calendar year at least the sum of (1) 85% of our real estate investment trust ordinary income for that year, (2) 95% of our real estate investment trust capital gain net income for that year and (3) any undistributed taxable income from prior periods, we would have to pay a 4% excise tax on the excess of that required dividend over the amounts actually distributed.
	•	Ninth, if we acquire any appreciated asset from a C corporation in certain transactions in which we must adopt the basis of the asset or any other property in the hands of the C corporation as our basis of the asset in our hands, and we recognize gain on the disposition of that asset during the 10-year period beginning on the date on which we acquired that asset, then we will have to pay tax on the built-in gain at the highest regular corporate rate. In general, a “C corporation” means a corporation that has to pay full corporate-level tax.
	•	Tenth, if we receive non-arm’s length income from one of our taxable REIT subsidiaries (as defined under “—Requirements for Qualification”), we will be subject to a 100% tax on the amount of our non-arm’s-length income.

	•	that is managed by one or more trustees or directors;
	•	the beneficial ownership of which is evidenced by transferable shares, or by transferable certificates of beneficial interest;
	•	that would otherwise be taxable as a domestic corporation, but for Sections 856 through 859 of the Code;
	•	that is neither a financial institution nor an insurance company to which certain provisions of the Code apply;
	•	the beneficial ownership of which is held by 100 or more persons;
	•	during the last half of each taxable year, not more than 50% in value of the outstanding stock of which is owned, directly or constructively, by five or fewer individuals, as defined in the Code to also include certain entities; and
	•	which meets certain other tests, described below, regarding the nature of its income and assets.

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	Gross Income Tests

	•	rents from real property;
	•	interest on debt secured by mortgages on real property, or on interests in real property;
	•	dividends or other distributions on, and gain from the sale of, shares in other REITs;

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	•	gain from the sale of real estate assets; and
	•	income derived from the temporary investment of new capital that is attributable to the issuance of our shares of beneficial interest or a public offering of our debt with a maturity date of at least five years and that we receive during the one year period beginning on the date on which we received such new capital.

	•	First, the rent must not be based in whole or in part on the income or profits of any person. Participating rent, however, will qualify as “rents from real property” if it is based on percentages of receipts or sales and the percentages: (a) are fixed at the time the leases are entered into, (b) are not renegotiated during the term of the leases in a manner that has the effect of basing rent on income or profits, and (c) conform with normal business practice.

More generally, the rent will not qualify as “rents from real property” if, considering the relevant lease and all of the surrounding circumstances, the arrangement does not conform with normal business practice, but is in reality used as a means of basing the rent on income or profits. We intend to set and accept rents which are fixed dollar amounts, and not to any extent by reference to any person’s income or profits, in compliance with the rules above.

	•	Second, we must not own, actually or constructively, 10% or more of the stock or the assets or net profits of any lessee, referred to as a related party tenant, other than a TRS. The constructive ownership rules generally provide that, if 10% or more in value of our shares is owned, directly or indirectly, by or for any person, we are considered as owning the stock owned, directly or indirectly, by or for such person.

We do not own any stock or any assets or net profits of any lessee directly, except that we may lease office or other space to our TRS or another taxable REIT subsidiary. We believe that each of the leases will conform with normal business practice, contain arm’s-length terms and that the rent payable under those leases will be treated as rents from real property for purposes of the 75% and 95% gross income tests. However, there can be no assurance that the IRS will not successfully assert a contrary position or that a change in circumstances will not cause a portion of the rent payable under the leases to fail to qualify as “rents from real property.” If such failures were in sufficient amounts, we might not be able to satisfy either of the 75% or 95% gross income tests and could lose our REIT status. In addition, if the IRS successfully reapportions or reallocates items of income, deduction, and credit among and between us and our TRS under the leases or any intercompany transaction because it determines that doing so is necessary to prevent the evasion of taxes or to clearly reflect income, we could be subject to a 100% excise tax on those amounts. As described above, we may own one or more taxable REIT subsidiaries. Under an exception to the related-party tenant rule described in the preceding paragraph, rent that we receive from a taxable REIT subsidiary will qualify as “rents from real property” as long as (1) at least 90% of the leased space in the property is leased to persons other than taxable REIT subsidiaries and related party tenants, and (2) the amount paid by the TRS to rent space at the property is substantially comparable to rents paid by other tenants of the property for comparable space. If we receive rent from a TRS, we will seek to comply with this exception. Whether rents paid by our TRS are substantially comparable to rents paid by our other tenants is determined at

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the time the lease with the TRS is entered into, extended, and modified, if such modification increases the rents due under such lease. Notwithstanding the foregoing, however, if a lease with a controlled TRS is modified and such modification results in an increase in the rents payable by such TRS, any such increase will not qualify as “rents from real property.” For purposes of this rule, a “controlled TRS” is a TRS in which we own stock possessing more than 50% of the voting power or more than 50% of the total value of the outstanding stock of such TRS.

	•	Third, the rent attributable to the personal property leased in connection with a lease of real property must not be greater than 15% of the total rent received under the lease.

The rent attributable to personal property under a lease is the amount that bears the same ratio to total rent under the lease for the taxable year as the average of the fair market values of the leased personal property at the beginning and at the end of the taxable year bears to the average of the aggregate fair market values of both the real and personal property covered by the lease at the beginning and at the end of such taxable year (the “personal property ratio”). With respect to each of our leases, we believe that the personal property ratio generally is less than 15%. Where that is not, or may in the future not be, the case, we believe that any income attributable to personal property will not jeopardize our ability to qualify as a REIT.

	•	Fourth, we cannot furnish or render noncustomary services to the tenants of our properties, or manage or operate our properties, other than through an independent contractor who is adequately compensated and from whom we do not derive or receive any income. However, we need not provide services through an “independent contractor,” but instead may provide services directly to our tenants, if the services are “usually or customarily rendered” in connection with the rental of space for occupancy only and are not considered to be provided for the tenants’ convenience. In addition, we may provide a minimal amount of “noncustomary” services to the tenants of a property, other than through an independent contractor, as long as our income from the services does not exceed 1% of our income from the related property. Finally, we may own up to 100% of the stock of one or more taxable REIT subsidiaries, which may provide noncustomary services to our tenants without tainting our rents from the related properties.

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	•	our failure to meet the income tests was due to reasonable cause and not due to willful neglect; and
	•	we file a description of each item of our gross income in accordance with applicable Treasury Regulations.

	•	First, at least 75% of the value of our total assets must consist of: (a) cash or cash items, including certain receivables, (b) government securities, (c) interests in real property, including leaseholds and options to acquire real property and leaseholds, (d) interests in mortgages on real property, (e) stock in other REITs, and (f) investments in stock or debt instruments during the

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		one year period following our receipt of new capital that we raise through equity offerings or offerings of debt with at least a five year term;
	•	Second, of our investments not included in the 75% asset class, the value of our interest in any one issuer’s securities may not exceed 5% of the value of our total assets;
	•	Third, we may not own more than 10% of the voting power or value of any one issuer’s outstanding securities;
	•	Fourth, no more than 20% of the value of our total assets may consist of the securities of one or more taxable REIT subsidiaries; and
	•	Fifth, no more than 25% of the value of our total assets may consist of the securities of taxable REIT subsidiaries and other non-TRS taxable subsidiaries and other assets that are not qualifying assets for purposes of the 75% asset test.

	•	we satisfied the asset tests at the end of the preceding calendar quarter; and
	•	the discrepancy between the value of our assets and the asset test requirements arose from changes in the market values of our assets and was not wholly or partly caused by the acquisition of one or more non-qualifying assets.

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	•	a citizen or resident of the United States;
	•	a domestic corporation;
	•	an estate whose income is subject to United States Federal income taxation regardless of its source; or
	•	a trust if a United States court can exercise primary supervision over the trust’s administration and one or more United States persons have authority to control all substantial decisions of the trust.

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	•	is a corporation or comes within certain other exempt categories and, when required, demonstrates this fact; or
	•	provides a taxpayer identification number, certifies as to no loss of exemption from backup withholding, and otherwise complies with the applicable requirements of the backup withholding rules.

	•	is described in Section 401(a) of the Code;
	•	is tax-exempt under Section 501(a) of the Code; and
	•	holds more than 10% (by value) of the equity interests in the REIT.

	•	it would not have qualified as a REIT but for the fact that Section 856(h)(3) of the Code provides that stock owned by qualified trusts will be treated, for purposes of the “not closely held” requirement, as owned by the beneficiaries of the trust (rather than by the trust itself); and

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	•	either (a) at least one qualified trust holds more than 25% by value of the interests in the REIT or (b) one or more qualified trusts, each of which owns more than 10% by value of the interests in the REIT, hold in the aggregate more than 50% by value of the interests in the REIT.

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	Backup Withholding and Information Reporting

	•	dividend payments;
	•	the payment of the proceeds from the sale of common stock effected at a United States office of a broker, as long as the income associated with these payments is otherwise exempt from United States Federal income tax; and
	•	the payor or broker does not have actual knowledge or reason to know that you are a United States person and you have furnished to the payor or broker: (a) a valid Internal Revenue Service Form W-8BEN or an acceptable substitute form upon which you certify, under penalties of perjury, that you are a non-United States person, or (b) other documentation upon which it may rely to treat the payments as made to a non-United States person in accordance with U.S. Treasury Regulations, or (c) you otherwise establish an exemption.

	•	the proceeds are transferred to an account maintained by you in the United States;
	•	the payment of proceeds or the confirmation of the sale is mailed to you at a United States address; or
	•	the sale has some other specified connection with the United States as provided in U.S. Treasury Regulations,

	•	a United States person;
	•	a controlled foreign corporation for United States tax purposes;
	•	a foreign person 50% or more of whose gross income is effectively connected with the conduct of a United States trade or business for a specified three-year period; or
	•	a foreign partnership, if at any time during its tax year: (a) one or more of its partners are “U.S. persons,” as defined in U.S. Treasury Regulations, who in the aggregate hold more than 50% of the income or capital interest in the partnership, or (b) such foreign partnership is engaged in the conduct of a United States trade or business,

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	•	is treated as a partnership under the Treasury Regulations relating to entity classification (the “check-the-box regulations”); and
	•	is not a “publicly traded” partnership.

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	•	an ERISA plan make investments that are prudent and in the best interests of the ERISA plan, its participants and beneficiaries;
	•	an ERISA plan make investments that are diversified in order to reduce the risk of large losses, unless it is clearly prudent for the ERISA plan not to do so;
	•	an ERISA plan’s investments are authorized under ERISA and the terms of the governing documents of the ERISA plan; and
	•	the fiduciary not cause the ERISA plan to enter into transactions prohibited under Section 406 of ERISA (and certain corresponding provisions of the Code).

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	•	freely transferable;
	•	part of a class of securities that is widely held; and
	•	either part of a class of securities that is registered under section 12(b) or 12(g) of the Exchange Act or sold to an ERISA plan as part of an offering of securities to the public pursuant to an effective registration statement under the Securities Act, and the class of securities of which this security is a part is registered under the Exchange Act within 120 days, or longer if allowed by the SEC, after the end of the fiscal year of the issuer during which this Offering of these securities to the public occurred.

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	•	invested in real estate which is managed or developed and with respect to which the entity has the right to substantially participate directly in the management or development activities; and
	•	which, in the ordinary course of its business, is engaged directly in real estate management or development activities.

	•	invested in one or more operating companies with respect to which the entity has management rights; and
	•	which, in the ordinary course of its business, actually exercises its management rights with respect to one or more of the operating companies in which it invests.

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			Number of
Underwriter			Shares
Citigroup Global Markets Inc.				1,400,000
Deutsche Bank Securities Inc.				1,400,000
J.P. Morgan Securities Inc.				360,000
KeyBanc Capital Markets, a division of McDonald Investments Inc.				360,000
Wachovia Capital Markets, LLC				360,000
RBC Capital Markets Corporation				120,000
	Total			4,000,000

		Per Share								Total
		No				Full								Full
		Exercise				Exercise				No Exercise				Exercise
Underwriting discounts and commissions paid by us		$	1.125			$	1.125			$	4,500,000			$	5,146,875

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	•	grants of stock options, PIUs, restricted stock units or restricted stock to employees, consultants or directors pursuant to the terms of the 2004 incentive award plan in effect as of the date of this prospectus;
	•	issuances of our common stock pursuant to a dividend reinvestment plan (if any); or
	•	issuances of our common stock, units or securities convertible into or exchangeable or exercisable for shares of our common stock in connection with other acquisitions of interests in real property or real property companies or entities owning interests in real property.

	•	Stabilizing transactions permit bids to purchase or the purchase of the underlying security while this distribution of the common stock offered pursuant to this prospectus is in progress so long as the stabilizing bids do not exceed a specified maximum.
	•	Overallotment involves sales by the underwriters of shares in excess of the number of shares the underwriters are obligated to purchase, which creates a syndicate short position. The short position may be either a covered short position or a naked short position. In a covered short position, the number of shares over-allotted by the underwriters is not greater than the number of shares that they may purchase in the over-allotment option. In a naked short position, the number of shares involved is greater than the number of shares in the overallotment option. The underwriters may close out any covered short position by either exercising their overallotment option and/or purchasing shares in the open market.

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	•	Syndicate covering transactions involve purchases of our common stock in the open market after the distribution of such stock has been completed in order to cover syndicate short positions. In determining the source of shares to close out the short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase shares through the overallotment option. If the underwriters sell more shares than could be covered by the overallotment option, a naked short position, the position can only be closed out by buying shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that there could be downward pressure on the price of the shares in the open market after pricing that could adversely affect investors who purchase in this Offering.

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150

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			Page
American Campus Communities, Inc. and Subsidiaries
Unaudited Pro Forma Condensed Consolidated and Combined Financial Statements
	Summary			F-2
	Pro Forma Condensed Consolidated Statement of Operations for the three months ended March 31, 2005 (unaudited)			F-3
	Pro Forma Condensed Consolidated and Combined Statement of Operations for the year ended December 31, 2004 (unaudited)			F-4
	Notes to Pro Forma Condensed Consolidated and Combined Statements of Operations (unaudited)			F-5
American Campus Communities, Inc. and Subsidiaries and American Campus Predecessor
Consolidated and Combined Financial Statements
	Consolidated Balance Sheets as of March 31, 2005 (unaudited) and December 31, 2004			F-6
	Consolidated and Combined Statements of Operations for the Company for the three months ended March 31, 2005 and for the Predecessor for the three months ended March 31, 2004 (all unaudited)			F-7
	Consolidated and Combined Statements of Comprehensive Income for the Company for the three months ended March 31, 2005 and for the Predecessor for the three months ended March 31, 2004 (all unaudited)			F-8
	Consolidated and Combined Statements of Cash Flows for the Company for the three months ended March 31, 2005 and for the Predecessor for the three months ended March 31, 2004 (all unaudited)			F-9
	Notes to Consolidated and Combined Financial Statements			F-10
	Report of Independent Registered Public Accounting Firm			F-24
	Consolidated Balance Sheets for the Company as of December 31, 2004 and for the Predecessor as of December 31, 2003			F-25
	Consolidated and Combined Statements of Operations for the Company for the period from August 17, 2004 to December 31, 2004 and for the Predecessor for the period from January 1, 2004 to August 16, 2004 and for the years ended December 31, 2003 and 2002			F-26
	Consolidated and Combined Statements of Changes in Stockholders’ and Predecessor Owners’ Equity for the Company for the period from August 17, 2004 to December 31, 2004 and for the Predecessor for the period from January 1, 2004 to August 16, 2004 and for the years ended December 31, 2003 and 2002			F-27
	Consolidated and Combined Statements of Cash Flows for the Company for the period from August 17, 2004 to December 31, 2004 and for the Predecessor for the period from January 1, 2004 to August 16, 2004 and for the years ended December 31, 2003 and 2002			F-28
	Notes to Consolidated and Combined Financial Statements			F-29
Proctor Portfolio Properties
	Report of Independent Registered Public Accounting Firm			F-54
	Combined Statement of Revenues and Certain Expenses for the year ended December 31, 2004			F-55
	Notes to Combined Statement of Revenues and Certain Expenses			F-56
Exchange at Gainesville
	Report of Independent Registered Public Accounting Firm			F-57
	Statements of Revenues and Certain Expenses for the three months ended March 31, 2005 and for the year ended December 31, 2004			F-58
	Notes to Statements of Revenues and Certain Expenses			F-59

F-1

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F-2

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			Company				Acquired				Pro Forma				Company
			Historical				Properties				Adjustments				Pro Forma
			(A)				(B)
Revenues			$	19,541			$	2,784			$	—			$	22,325
Operating expenses:
	Property operating expenses			7,011				1,128				—				8,139
	Third party development and management services			1,464				—				—				1,464
	General and administrative			1,364				—				—				1,364
	Depreciation and amortization			3,424				340				—				3,764
	Ground/facility leases			212				—				—				212
Total operating expenses				13,475				1,468				—				14,943
Operating income				6,066				1,316				—				7,382
Nonoperating income and (expenses):
	Interest income			58				—				—				58
	Interest expense			(3,808	)			(962	)			—				(4,770	)
	Amortization of deferred financing costs			(246	)			(16	)			—				(262	)
	Other nonoperating income			430				—				—				430
Total nonoperating expenses				(3,566	)			(978	)			—				(4,544	)
Income before income tax provision and minority interests				2,500				338				—				2,838
Income tax provision				(102	)			—				—				(102	)
Minority interests				(87	)			—				(3	)(C)			(90	)
Income from continuing operations			$	2,311			$	338			$	(3	)		$	2,646
Income from continuing operations per share:
	Basic		$	0.18											$	0.21
	Diluted		$	0.19											$	0.21
Weighted average common shares outstanding:
	Basic			12,622,145												12,622,145
	Diluted			12,769,939												12,769,939

F-3

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			Company				Predecessor
			Period from				Period from												Company
			August 17, 2004				January 1, 2004												and Predecessor
			to December 31,				to August 16,				Acquired				Pro Forma				Pro Forma
			2004				2004				Properties				Adjustments				Combined
			(A)				(A)				(B)
Revenues			$	26,262			$	34,561			$	15,800			$	—			$	76,623
Operating expenses:
	Property operating expenses			9,345				15,416				7,169				—				31,930
	Third party development and management services			2,140				3,403				—				—				5,543
	General and administrative			4,202				1,032				—				938	(D)			6,172
	Depreciation and amortization			4,158				5,815				4,619				—				14,592
	Ground/facility leases			214				598				—				—				812
Total operating expenses				20,059				26,264				11,788				938				59,049
Operating income				6,203				8,297				4,012				(938	)			17,574
Nonoperating income and (expenses):
	Interest income			39				43				—				—				82
	Interest expense			(5,556	)			(11,142	)			(5,827	)			2,523	(E)			(20,002	)
	Amortization of deferred financing costs			(842	)			(369	)			(135	)			251	(F)			(1,095	)
	Other nonoperating income			653				274				—				—				927
Total nonoperating expenses				(5,706	)			(11,194	)			(5,962	)			2,774				(20,088	)
Income (loss) before income tax benefit and minority interests				497				(2,897	)			(1,950	)			1,836				(2,514	)
Income tax benefit				728				—				—				—				728
Minority interests				(29	)			129				—				(99	)(C)			1
Income (loss) from continuing operations			$	1,196			$	(2,768	)		$	(1,950	)		$	1,737			$	(1,785	)
Income (loss) from continuing operations per share:
	Basic		$	0.10															$	(0.14	)
	Diluted		$	0.10															$	(0.14	)
Weighted average common shares outstanding:
	Basic			12,513,130												109,015	(G)			12,622,145
	Diluted			12,634,130												(11,985	)(G)			12,622,145

F-4

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(A)		Reflects the Company’s historical condensed consolidated statements of operations for the three months ended March 31, 2005 and for the period from August 17, 2004 to December 31, 2004, and the Predecessor’s historical condensed combined statement of operations for the period from January 1, 2004 to August 16, 2004.
(B)		Reflects the results of operations for the Exchange at Gainesville, City Parc at Fry Street and the five-property Proctor Portfolio for the period indicated. Revenues and property operating expenses reflect the historical amounts incurred by the respective properties prior to their respective acquisition dates. Depreciation and amortization reflects depreciation expense on the respective properties’ fixed assets purchased and recorded at fair value and the amortization of in-place leases recognized upon acquisition of the respective property, which is amortized over the remaining initial term of the respective leases, generally less than one year.
		Interest expense reflects the debt assumed or incurred by the Company for the respective property acquisition, and interest expense incurred under the Company’s revolving credit facility for borrowings made to complete the respective acquisition. Debt assumed by the Company was valued at fair market value. Amortization of deferred financing costs reflects amortization of costs incurred in connection with the debt assumed or incurred by the Company for the respective property acquisition.
(C)		For the three months ended March 31, 2005 and for the period from January 1, 2004 to August 16, 2004, an adjustment was made to reflect the 1.0% minority interest in pro forma earnings for the recognition of a 1.0% special class of partnership interests in the Operating Partnership granted to certain members of executive and senior management in conjunction with the IPO. This was offset for the year ended December 31, 2004 unaudited pro forma condensed consolidated and combined statement of operations by the elimination of a minority interest in earnings resulting from the acquisition (with proceeds from the IPO) of a minority ownership interest in a joint venture.
(D)		Reflects the pro forma increased costs associated with operating as a public company for the period from January 1, 2004 until the consummation of the Company’s IPO on August 17, 2004. Such costs include compensation and staffing, directors and officers liability insurance premiums, Board of Directors costs and increased legal expenses.
(E)		Reflects the repayment of certain debt with proceeds from the IPO, assuming that the loans were repaid on January 1, 2004.
(F)		Represents a decrease in amortization of deferred financing costs as a result of the repayment of debt in connection with the IPO mentioned in Note (E).
(G)		Assumes that the IPO and related common share issuance occurred effective January 1, 2004.

F-5

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			March 31, 2005				December 31, 2004
			(Unaudited)
Assets
Investments in real estate:
	Owned off-campus properties, net		$	385,359			$	250,100
	Owned off-campus property — held for sale			—				22,350
	On-campus participating properties, net			70,271				68,064
Investments in real estate, net				455,630				340,514
Cash and cash equivalents				6,425				4,050
Restricted cash and short-term investments				7,382				9,816
Student contracts receivable, net				3,013				2,164
Other assets				14,037				11,084
Total assets			$	486,487			$	367,628
Liabilities and stockholders’ equity
Liabilities:
	Debt		$	314,385			$	201,014
	Accounts payable and accrued expenses			5,280				5,443
	Other liabilities			22,793				20,294
Total liabilities				342,458				226,751
Minority interests				2,649				2,648
Commitments and contingencies (Note 11)
Stockholders’ equity:
	Common stock, $.01 par value, 800,000,000 shares authorized, 12,615,000 shares issued and outstanding			126				126
	Additional paid in capital			135,150				136,259
	Accumulated earnings and distributions			5,717				1,802
	Accumulated other comprehensive income			387				42
Total stockholders’ equity				141,380				138,229
Total liabilities and stockholders’ equity			$	486,487			$	367,628

F-6

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			Company				Predecessor
			Three Months				Three Months
			Ended				Ended
			March 31, 2005				March 31, 2004
Revenues:
	Owned off-campus properties		$	12,489			$	7,989
	On-campus participating properties			5,493				5,293
	Third party development services			609				1,671
	Third party development services — on-campus participating properties			36				27
	Third party management services — affiliates			—				74
	Third party management services			710				298
	Resident services			204				—
Total revenues				19,541				15,352
Operating expenses:
	Owned off-campus properties			5,136				3,459
	On-campus participating properties			1,875				1,800
	Third party development and management services			1,464				1,264
	General and administrative			1,364				453
	Depreciation and amortization			3,424				2,259
	Ground/facility leases			212				141
Total operating expenses				13,475				9,376
Operating income				6,066				5,976
Nonoperating income and (expenses):
	Interest income			58				13
	Interest expense			(3,808	)			(4,281	)
	Amortization of deferred financing costs			(246	)			(144	)
	Other nonoperating income			430				—
Total nonoperating expenses				(3,566	)			(4,412	)
Income before income tax provision, minority interests, and discontinued operations				2,500				1,564
Income tax provision				(102	)			—
Minority interests				(87	)			21
Income from continuing operations				2,311				1,585
Discontinued operations:
	Loss attributable to discontinued operations			(2	)			(55	)
	Gain from disposition of real estate			5,883				—
Total discontinued operations				5,881				(55	)
Net income			$	8,192			$	1,530
Income per share — basic:
	Income from continuing operations per share		$	0.18
	Net income per share		$	0.65
Income per share — diluted:
	Income from continuing operations per share		$	0.19
	Net income per share		$	0.65
Weighted average common shares outstanding:
	Basic			12,622,145
	Diluted			12,769,939
Distributions declared per common share			$	0.3375

F-7

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			Company				Predecessor
			Three Months Ended				Three Months Ended
			March 31, 2005				March 31, 2004
Net income			$	8,192			$	1,530
Other comprehensive income (loss):
	Change in fair value of interest rate swap			345				(371	)
	Change in fair value of interest rate cap			—				6
Net comprehensive income			$	8,537			$	1,165

F-8

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				Company				Predecessor
				Three Months				Three Months
				Ended				Ended
				March 31, 2005				March 31, 2004
Operating activities
Net income				$	8,192			$	1,530
Adjustments to reconcile net income to net cash provided by operating activities:
	Gain from disposition of real estate				(5,883	)			—
	Minority interests				87				(21	)
	Depreciation and amortization				3,424				2,346
	Amortization of deferred financing costs and debt premiums				127				162
	Compensation expense recognized for restricted stock awards				24				—
	Income tax provision				102				—
	Changes in operating assets and liabilities:
		Restricted cash and short-term investments			3,013				1,120
		Student contracts receivable, net			(849	)			(2,402	)
		Other assets			(1,474	)			2,293
		Accounts payable and accrued expenses			(414	)			2,387
		Other liabilities			(636	)			(2,178	)
Net cash provided by operating activities					5,713				5,237
Investing activities
	Net proceeds from disposition of real estate				28,023				—
	Cash paid for property acquisitions				(72,763	)			—
	Investments in owned off-campus properties				(10,972	)			(19,034	)
	Investments in on-campus participating properties				(3,055	)			(124	)
	Purchase of furniture, fixtures and equipment				(86	)			(55	)
	Net cash used in investing activities				(58,853	)			(19,213	)
Financing activities
	Proceeds from revolving credit facility, net of paydowns				21,800				—
	Proceeds from bridge loan				37,400				—
	Proceeds from construction loans				2,528				12,190
	Principal payments on debt				(484	)			(428	)
	Change in construction accounts payable				681				3,459
	Debt issuance and offering costs				(913	)			(1,697	)
	Distributions to common and restricted stockholders and partnership unit holders				(4,277	)			—
	Contributions from Predecessor owners				—				370
	Distributions to Predecessor owners				(1,179	)			(882	)
	Distributions to minority partners				(41	)			(8	)
	Net cash provided by financing activities				55,515				13,004
Net change in cash and cash equivalents					2,375				(972	)
Cash and cash equivalents at beginning of period					4,050				5,227
Cash and cash equivalents at end of period				$	6,425			$	4,255
Supplemental disclosure of non-cash investing and financing activities
	Change in fair value of derivative instruments, net			$	345			$	(365	)
	Loans assumed in connection with property acquisitions			$	(47,169	)		$	—
Supplemental disclosure of cash flow information
	Interest paid			$	4,496			$	5,736

F-9

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1.	Organization and Description of Business

F-10

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1.	Organization and Description of Business — (Continued)

2.	Summary of Significant Accounting Policies

F-11

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2.	Summary of Significant Accounting Policies — (Continued)

Buildings and improvements		7-40 years
On-campus participating properties		25-34 years (shorter of useful life or respective lease term)
Furniture, fixtures and equipment		3-7 years

F-12

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2.	Summary of Significant Accounting Policies — (Continued)

F-13

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Table of Contents

2.	Summary of Significant Accounting Policies — (Continued)

			Three Months
			Ended
			March 31, 2005
Basic net income per share calculation:
	Income from continuing operations		$	2,311
	Discontinued operations1			5,881
	Net income		$	8,192
	Income from continuing operations — per share		$	0.18
	Income from discontinued operations — per share1		$	0.47
	Net income — per share		$	0.65
	Basic weighted average common shares outstanding			12,622,145
Diluted net income per share calculation:
	Income from continuing operations		$	2,311
	Add back income allocated to PIU holders			87
	Income from continuing operations, as adjusted			2,398
	Discontinued operations1			5,881
	Net income, as adjusted		$	8,279
	Income from continuing operations — per share		$	0.19
	Income from discontinued operations — per share1		$	0.46
	Net income — per share		$	0.65
	Basic weighted average common shares outstanding			12,622,145
	PIUs			121,000
	Restricted stock awards			26,794
	Diluted weighted average common shares outstanding			12,769,939

1.	Includes $5.9 million gain on disposition of University Village at San Bernardino.

3.	Property Acquisitions

F-14

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3.	Property Acquisitions — (Continued)

		Three Months Ended
		March 31,
		2005				2004
Total revenues		$	22,325			$	19,039
Net income		$	8,413			$	1,477
Net income per share — basic and diluted		$	0.67			$	0.12

4.	Property Disposition and Discontinued Operations

F-15

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4.	Property Disposition and Discontinued Operations — (Continued)

			Three Months
			Ended March 31,
			2005				2004
Total revenues			$	29			$	820
Total operating expenses				(31	)			(563	)
	Operating (loss) income			(2	)			257
Total nonoperating expenses				—				(312	)
	Net loss		$	(2	)		$	(55	)

		March 31, 2005				December 31, 2004
Cash and cash equivalents		$	—			$	176
Other assets		$	—			$	119
Land, buildings and improvements, and furniture, fixtures, and equipment, net of accumulated depreciation		$	—			$	22,350
Accounts payable and accrued expenses		$	—			$	126
Other liabilities		$	—			$	311

5.	Investments in Owned Off-Campus Properties

			March 31, 2005				December 31, 2004
Owned off-campus properties:
	Land		$	48,115			$	33,778
	Buildings and improvements			328,228				219,841
	Furniture, fixtures and equipment			14,099				10,104
	Construction in progress			19,848				9,087
				410,290				272,810
	Less accumulated depreciation			(24,931	)			(22,710	)
Owned off-campus properties, net			$	385,359			$	250,100

6.	On-Campus Participating Properties

F-16

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Table of Contents

6.	On-Campus Participating Properties — (Continued)

											Historical Cost
			Lease Commencement/				Required Debt				March 31,				December 31,
Lessor/University			Expiration				Repayment				2005				2004
Texas A&M University System/ Prairie View A&M University(1)				2/1/96 / 8/31/38				9/1/23			$	37,844			$	37,840
Texas A&M University System/ Texas A&M International				2/1/96 / 8/31/38				9/1/23				5,908				5,909
Texas A&M University System/ Prairie View A&M University(2)				10/1/99 / 8/31/39				8/31/25 / 8/31/28				23,680				23,663
University of Houston System/ University of Houston — Phase I				9/27/00 / 8/31/41				8/31/35				18,127				18,123
University of Houston System/ University of Houston — Phase II(3)				9/27/00 / 8/31/41				8/31/35				3,896				835
												89,455				86,370
	Less accumulated amortization											(19,184	)			(18,306	)
On-campus participating properties, net											$	70,271			$	68,064

(1)	Consists of three phases placed in service between 1996 and 1998
(2)	Consists of two phases placed in service between 2000 and 2003.
(3)	Phase II is covered under the original Cullen Oaks ground lease. This facility is under development and is scheduled to be placed in service in August 2005.

7.	Joint Venture and Minority Interests

F-17

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7.	Joint Venture and Minority Interests — (Continued)

8.	Debt

			March 31,				December 31,
			2005				2004
Debt secured by owned off-campus properties:
	Revolving credit facility		$	33,600			$	11,800
	Mortgage and bridge loans payable			196,127				111,974
Debt secured by on-campus participating properties:
	Mortgage loan payable			16,978				17,045
	Construction loan payable			3,069				540
	Bonds payable			59,655				59,655
				309,429				201,014
Unamortized debt premiums				4,956				—
Total debt			$	314,385			$	201,014

F-18

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8.	Debt — (Continued)

9.	Incentive Award Plan

F-19

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9.	Incentive Award Plan — (Continued)

10.	Interest Rate Hedges

11.	Commitments and Contingencies

F-20

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11.	Commitments and Contingencies — (Continued)

12.	Segments

F-21

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12.	Segments — (Continued)

		Three Months Ended
		March 31,
		2005				2004
Owned Off-Campus Properties
Rental revenues		$	12,692			$	7,989
Interest income			34				1
Total revenues from external customers			12,726				7,990
Operating expenses before depreciation and amortization			5,065				3,539
Interest expense			2,456				2,910
Insurance gain			430				—
Operating income before depreciation and amortization, minority interests and allocation of corporate overhead		$	5,635			$	1,541
Depreciation and amortization		$	2,455			$	1,424
Capital expenditures		$	10,972			$	19,034
Total segment assets at March 31,		$	396,663			$	251,215
On-Campus Participating Properties
Rental revenues		$	5,493			$	5,293
Interest income			25				12
Total revenues from external customers			5,518				5,305
Operating expenses before depreciation, amortization, and ground/facility leases			1,669				1,631
Ground/facility leases			212				141
Interest expense			1,347				1,371
Operating income before depreciation and amortization, minority interests and allocation of corporate overhead		$	2,290			$	2,162
Depreciation and amortization		$	880			$	854
Capital expenditures		$	3,055			$	124
Total segment assets at March 31,		$	83,423			$	90,654
Development Services
Development and construction management fees from external customers		$	645			$	1,698
Intersegment revenues			92				—
Total revenues			737				1,698
Operating expenses		$	912			$	764
Operating (loss) income before depreciation and amortization, minority interests and allocation of corporate overhead		$	(175	)		$	934
Total segment assets at March 31,		$	1,406			$	2,258

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Table of Contents

12.	Segments — (Continued)

		Three Months Ended
		March 31,
		2005				2004
Property Management Services
Property management fees from external customers		$	710			$	372
Intersegment revenues			657				497
Total revenues			1,367				869
Operating expenses			418				373
Operating income before depreciation and amortization, minority interests and allocation of corporate overhead		$	949			$	496
Total segment assets at March 31,		$	2,051			$	475
Reconciliations
Total segment revenues		$	20,348			$	15,862
Elimination of intersegment revenues			(749	)			(497	)
Total consolidated revenues		$	19,599			$	15,365
Segment operating income before depreciation, amortization, minority interests and allocation of corporate overhead		$	8,699			$	5,133
Depreciation and amortization, including amortization of deferred financing costs			3,670				2,403
Net unallocated expenses relating to corporate overhead			2,529				1,166
Income tax provision			102				—
Minority interests			(87	)			21
Income from continuing operations		$	2,311			$	1,585
Total segment assets		$	483,543			$	344,602
Unallocated corporate assets			2,944				2,381
Total assets		$	486,487			$	346,983

13.	Subsequent Events

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	/s/ Ernst & Young LLP

F-24

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Table of Contents

			Company				Predecessor
			December 31, 2004				December 31, 2003
Assets
Investments in real estate:
	On-campus participating properties, net		$	68,064			$	69,713
	On-campus participating property — held for sale			—				7,976
	Owned off-campus properties, net			250,100				222,907
	Owned off-campus property — held for sale			22,350				—
Investments in real estate, net				340,514				300,596
Cash and cash equivalents				4,050				5,227
Restricted cash and short-term investments				9,816				9,503
Student contracts receivable, net				2,164				2,355
Other assets				11,084				12,885
Total assets			$	367,628			$	330,566
Liabilities and stockholders’ and Predecessor owners’ equity
Liabilities:
	Debt		$	201,014			$	267,518
	Note payable secured by leasehold held for sale			—				8,080
	Accounts payable and accrued expenses			5,443				3,966
	Other liabilities			20,294				23,092
Total liabilities				226,751				302,656
Minority interests				2,648				252
Commitments and contingencies (Note 14)
Stockholders’ and Predecessor owners’ equity:
	Common stock, $.01 par value, 800,000,000 shares authorized, 12,615,000 shares issued and outstanding			126				—
	Additional paid in capital			136,259				—
	Accumulated earnings and distributions			1,802				—
	Accumulated other comprehensive income (loss)			42				(197	)
	Predecessor owners’ equity			—				27,855
Total stockholders’ and Predecessor owners’ equity				138,229				27,658
Total liabilities and stockholders’ and Predecessor owners’ equity			$	367,628			$	330,566

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Table of Contents

			Company				Predecessor
			Period from				Period from
			August 17, 2004 to				January 1, 2004 to				Year Ended				Year Ended
			December 31, 2004				August 16, 2004				December 31, 2003				December 31, 2002
Revenues:
	Owned off-campus properties		$	15,254			$	19,861			$	31,514			$	29,997
	On-campus participating properties			8,078				9,340				16,482				16,055
	Third party development services			1,367				3,896				7,830				3,998
	Third party development services – on-campus participating properties			43				497				109				1,076
	Third party management services – affiliates			—				178				335				507
	Third party management services			1,138				789				854				438
	Resident services			382				—				—				—
	Other income			—				—				12				60
Total revenues				26,262				34,561				57,136				52,131
Operating expenses:
	Owned off-campus properties			6,741				10,120				15,272				14,856
	On-campus participating properties			2,604				5,296				7,925				8,101
	Third party development and management services			2,140				3,403				5,389				4,441
	General and administrative			4,202				1,032				2,749				1,995
	Depreciation and amortization			4,158				5,815				8,868				8,077
	Ground/facility lease			214				598				489				643
Total operating expenses				20,059				26,264				40,692				38,113
Operating income				6,203				8,297				16,444				14,018
Nonoperating income and (expenses):
	Interest income			39				43				71				166
	Interest expense			(5,556	)			(11,142	)			(16,940	)			(16,421	)
	Amortization of deferred financing costs			(842	)			(369	)			(558	)			(546	)
	Other nonoperating income			653				274				—				—
Total nonoperating expenses				(5,706	)			(11,194	)			(17,427	)			(16,801	)
Income (loss) before income tax benefit, minority interests, and discontinued operations				497				(2,897	)			(983	)			(2,783	)
Income tax benefit				728				—				—				—
Minority interests				(29	)			129				16				30
Income (loss) from continuing operations				1,196				(2,768	)			(967	)			(2,753	)
Discontinued operations:
	Income (loss) attributable to discontinued operations			606				(334	)			7				319
	(Loss) gain from disposition of real estate			—				(39	)			16				295
Total discontinued operations				606				(373	)			23				614
Net income (loss)			$	1,802			$	(3,141	)		$	(944	)		$	(2,139	)
Income per share – basic:
	Income from continuing operations per share		$	0.10
	Net income per share		$	0.14
Income per share – diluted:
	Income from continuing operations per share		$	0.10
	Net income per share		$	0.15
Weighted average common shares outstanding:
	Basic			12,513,130
	Diluted			12,634,130
Distributions declared per common share			$	0.1651

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Table of Contents

																Accumulated				Accumulated
				Number								Additional				Earnings				Other				Predecessor
				of				Common				Paid in				and				Comprehensive				Owners’
				Shares				Stock				Capital				Distributions				Income (Loss)				Equity				Total
Predecessor
Predecessor owners’ equity, December 31, 2001					—			$	—			$	—			$	—			$	29			$	40,542			$	40,571
	Contributions				—				—				—				—				—				5,363				5,363
	Distributions				—				—				—				—				—				(8,194	)			(8,194	)
	Comprehensive loss:
		Expiration of interest rate swap			—				—				—				—				29				—				29
		Change in fair value of interest rate cap			—				—				—				—				(104	)			—				(104	)
		Net loss			—				—				—				—				—				(2,139	)			(2,139	)
		Total comprehensive loss			—				—				—				—				—				—				(2,214	)
Predecessor owners’ equity, December 31, 2002					—				—				—				—				(46	)			35,572				35,526
	Contributions				—				—				—				—				—				3,538				3,538
	Distributions				—				—				—				—				—				(10,311	)			(10,311	)
	Comprehensive loss:
		Change in fair value of interest rate swap			—				—				—				—				(153	)			—				(153	)
		Change in fair value of interest rate cap			—				—				—				—				2				—				2
		Net loss			—				—				—				—				—				(944	)			(944	)
		Total comprehensive loss			—				—				—				—				—				—				(1,095	)
Predecessor owners’ equity December 31, 2003					—				—				—				—				(197	)			27,855				27,658
	Contributions				—				—				—				—				—				860				860
	Distributions				—				—				—				—				—				(2,212	)			(2,212	)
	Distribution of the Village at Riverside and other non-core assets to Predecessor owners				—				—				—				—				—				(2,005	)			(2,005	)
	Comprehensive loss:
		Change in fair value of interest rate swap			—				—				—				—				3				—				3
		Net loss			—				—				—				—				—				(3,141	)			(3,141	)
		Total comprehensive loss			—				—				—				—				—				—				(3,138	)
Predecessor owners’ equity, August 16, 2004					—			$	—			$	—			$	—			$	(194	)		$	21,357			$	21,163
Company
	Reclassify Predecessor owners’ equity				—			$	—			$	21,357			$	—			$	—			$	(21,357	)		$	—
	Net proceeds from sale of common stock				12,615,000				126				197,694				—				—				—				197,820
	Issuance of fully vested restricted stock units				—				—				125				—				—				—				125
	Fair value of profits interest units granted				—				—				2,117				—				—				—				2,117
	Record minority interests for profits interest units				—				—				(1,424	)			—				—				—				(1,424	)
	Redemption of ownership interest of Predecessor owners				—				—				(80,127	)			—				—				—				(80,127	)
	Distributions to Predecessor owners				—				—				(1,399	)			—				—				—				(1,399	)
	Distributions to common stockholders				—				—				(2,084	)			—				—				—				(2,084	)
	Comprehensive income:
		Change in fair value of interest rate swap			—				—				—				—				191				—				191
		Expiration of interest rate cap			—				—				—				—				45				—				45
		Net income			—				—				—				1,802				—				—				1,802
		Total comprehensive income			—				—				—				—				—				—				2,038
Stockholders’ equity, December 31, 2004					12,615,000			$	126			$	136,259			$	1,802			$	42			$	—			$	138,229

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				Period from				Period from
				August 17, 2004				January 1, 2004				Year Ended				Year Ended
				to December 31,				to August 16,				December 31,				December 31,
				2004				2004				2003				2002
Operating activities
Net income (loss)				$	1,802			$	(3,141	)		$	(944	)		$	(2,139	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
	Depreciation and amortization				4,395				5,949				9,214				8,411
	Amortization of deferred financing costs				933				421				587				564
	Compensation expense recognized for award of profits interest units and restricted stock units				2,242				—				—				—
	Income tax benefit				(728	)			—				—				—
	Changes in operating assets and liabilities:
		Restricted cash and short-term investments			4,385				(5,016	)			(2,036	)			(140	)
		Student contracts receivable, net			(727	)			860				(378	)			355
		Other assets			786				2,320				(265	)			(1,269	)
		Accounts payable and accrued expenses			(910	)			2,591				(421	)			1,335
		Other liabilities			199				932				1,105				530
Net cash provided by operating activities					12,377				4,916				6,862				7,647
Investing activities
	Investments in on-campus participating properties				(1,316	)			(565	)			(3,788	)			(396	)
	Student housing facility subject to lease-held for sale				—				—				(7,976	)			—
	Investments in owned off-campus properties				(13,220	)			(47,900	)			(21,777	)			(20,901	)
	Purchase of furniture, fixtures and equipment				(401	)			(219	)			(197	)			(381	)
	Net cash used in investing activities				(14,937	)			(48,684	)			(33,738	)			(21,678	)
Financing activities
	Proceeds from short-term loans, net of paydowns				(1,870	)			1,796				(716	)			790
	Proceeds from revolving credit facility, net of paydowns				11,800				—				—				—
	Repayment of long-term debt				(107,149	)			(1,403	)			(2,997	)			(33,502	)
	Repayment of notes payable – related parties				—				—				(1,000	)			(1,096	)
	Proceeds from long-term debt				540				41,170				29,605				47,969
	Proceeds from notes payable – related parties				—				—				1,020				607
	Change in construction accounts payable				(6,860	)			2,044				3,943				3
	Issuance of common stock				220,763				—				—				—
	Debt issuance and offering costs				(21,855	)			(3,001	)			(1,513	)			(447	)
	Distributions to common stockholders and holders of profits interest units				(2,104	)			—				—				—
	Contributions from Predecessor owners				—				860				3,538				5,363
	Distributions to Predecessor owners				(1,399	)			(2,212	)			(10,311	)			(8,194	)
	Redemption of ownership interests of Predecessor owners				(85,853	)			—				—				—
	Minority interests				(11	)			(105	)			(32	)			153
	Net cash provided by financing activities				6,002				39,149				21,537				11,646
Net change in cash and cash equivalents					3,442				(4,619	)			(5,339	)			(2,385	)
Cash and cash equivalents at beginning of period					608				5,227				10,566				12,951
Cash and cash equivalents at end of period				$	4,050			$	608			$	5,227			$	10,566
Supplemental disclosure of non-cash investing and financing activities
	Reduction of investment in student housing due to fire			$	—			$	—			$	(3,750	)		$	—
	Financing of equipment through capital lease obligations			$	69			$	302			$	117			$	278
	Change in fair value of derivative instruments, net			$	(134	)		$	373			$	(151	)		$	(76	)
	Transfer of leasehold asset			$	—			$	7,976			$	—			$	—
	Repayment by transferee of note payable on leasehold asset held for sale			$	—			$	(8,080	)		$	—			$	—
	Contribution of land from minority partner in development joint venture			$	1,220			$	—			$	—			$	—
	Distribution of assets of The Village at Riverside and other non-core assets to Predecessor owners			$	(13,845	)		$	—			$	—			$	—
	Distribution of liabilities of The Village at Riverside and other non-core assets to Predecessor owners			$	11,840			$	—			$	—			$	—
Supplemental disclosure of cash flow information
	Interest paid			$	7,657			$	9,960			$	17,665			$	17,237
	Income taxes paid			$	67			$	—			$	—			$	—

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1.	Organization and Description of Business

F-29

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2.	Summary of Significant Accounting Policies

F-30

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2.	Summary of Significant Accounting Policies — (Continued)

F-31

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2.	Summary of Significant Accounting Policies — (Continued)

	a.	Management, having the authority to approve the action, commits to a plan to sell the asset

	b.	The asset is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets

	c.	An active program to locate a buyer and other actions required to complete the plan to sell the asset have been initiated

	d.	The sale of the asset is probable, and transfer of the asset is expected to qualify for recognition as a completed sale, within one year

	e.	The asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value

	f.	Actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.

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2.	Summary of Significant Accounting Policies — (Continued)

		Balance, Beginning				Charged to								Balance, End
		of Period				Expense				Write-Offs				of Period
Year ended December 31, 2002		$	894			$	738			$	(56	)		$	1,576
Year ended December 31, 2003		$	1,576			$	584			$	(103	)		$	2,057
Year ended December 31, 2004		$	2,057			$	646			$	(1,851	)(1)		$	852

(1)	In 2004, the Company wrote off essentially all receivables that were 100% reserved.

F-33

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2.	Summary of Significant Accounting Policies — (Continued)

F-34

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2.	Summary of Significant Accounting Policies — (Continued)

F-35

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2.	Summary of Significant Accounting Policies — (Continued)

3.	Earnings per Share

			Period from
			August 17, 2004
			through
			December 31, 2004
Basic net income per share calculation:
	Income from continuing operations		$	1,196
	Discontinued operations			606
	Net income		$	1,802
	Income from continuing operations – per share		$	0.10
	Income from discontinued operations – per share		$	0.04
	Net income – per share		$	0.14
	Basic weighted average common shares outstanding			12,513,130
Diluted net income per share calculation:
	Income from continuing operations		$	1,196
	Add back income allocated to PIU holders			30
	Income from continuing operations, as adjusted			1,226
	Discontinued operations			606
	Net income, as adjusted		$	1,832
	Income from continuing operations – per share		$	0.10
	Income from discontinued operations – per share		$	0.05
	Net income – per share		$	0.15
	Basic weighted average common shares outstanding			12,513,130
	PIUs			121,000
	Diluted weighted average common shares outstanding			12,634,130

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			December 31, 2004
Deferred tax assets:
	Fixed and intangible assets		$	11,742
	Net operating loss carryforward			343
	Prepaid and deferred rent			175
	Bad debt reserves			46
	Accrued expenses			21
Total deferred tax assets				12,327
Valuation allowance for deferred tax assets				(10,696	)
Deferred tax assets, net of valuation allowance				1,631
Deferred tax liability:
	Deferred financing costs			903
Net deferred tax assets			$	728

			Period from
			August 17, 2004
			through
			December 31, 2004
Deferred:
	Federal		$	660
	State			68
Total (total income tax benefit from continuing operations)			$	728

		Period from
		August 17, 2004 to
		December 31, 2004
Tax at U.S. statutory rates on TRS income subject to tax		$	(132	)
State income tax, net of federal income tax benefit			(14	)
Effect of permanent differences			(8	)
Decrease in valuation allowance			217
Initial adoption of SFAS No. 109			665
Income tax benefit		$	728

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4.	Income Taxes — (Continued)

5.	Investments in Owned Off-Campus Properties

			December 31,
			2004				2003
Owned off-campus properties:
	Land		$	33,778			$	35,434
	Buildings and improvements			219,841				175,436
	Furniture, fixtures and equipment			10,104				6,673
	Construction in progress			9,087				22,961
				272,810				240,504
	Less accumulated depreciation			(22,710	)			(17,597	)
Owned off-campus properties, net			$	250,100			$	222,907

6.	On-Campus Participating Properties

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6.	On-Campus Participating Properties — (Continued)

																		Historical Cost
																		December 31,
		Lease Commencement/												Required Debt
Lessor/University		Expiration												Repayment				2004				2003
Texas A&M University System/ Prairie View A&M University(1)			2/1/96				/				8/31/38				9/1/23			$	37,840			$	37,368
Texas A&M University System/ Texas A&M International			2/1/96				/				8/31/38				9/1/23				5,909				5,889
Texas A&M University System/ Prairie View A&M University(2)			10/1/99				/				8/31/39				8/31/25 / 8/31/28				23,663				23,366
University of Houston System/ University of Houston – Phase I			9/27/00				/				8/31/41				8/31/35				18,123				17,864
University of Houston System/ University of Houston – Phase II(3)			9/27/00				/				8/31/41				8/31/35				835				—
																			86,370				84,487
Less accumulated amortization																			(18,306	)			(14,774	)
On-campus participating properties, net																		$	68,064			$	69,713

(1)	Consists of three phases placed in service between 1996 and 1998
(2)	Consists of two phases placed in service between 2000 and 2003.
(3)	Phase II is covered under the original Cullen Oaks ground lease. This facility is under development and is scheduled to be placed in service in August 2005.

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6.	On-Campus Participating Properties — (Continued)

7.	Joint Venture and Minority Interests

8.	Debt

			December 31,
			2004				2003
Debt secured by owned off-campus properties:
	Revolving credit facility and short-term notes payable		$	11,800			$	74
	Mortgage loans payable			111,974				170,780
	Construction loans payable			—				26,447
Debt secured by on-campus participating properties:
	Mortgage loan payable			17,045				17,287
	Construction loan payable			540				—
	Bonds payable			59,655				61,010
Total debt			$	201,014			$	275,598

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8.	Debt — (Continued)

			Year Ended
			December 31, 2004
Balance, beginning of period			$	275,598
Additions
	Draws on lines of credit, net of payoffs			11,726
	Draws under advancing construction loans			41,170
	Closing of new construction loan for leasehold property(1)			540
Deductions:
	Scheduled repayments of principal			(3,053	)
	Repayment of note payable secured by leasehold held for sale			(8,080	)
	Reduction in debt due to distribution of assets in connection with IPO			(11,388	)
	Repayment of construction loans in connection with IPO			(59,537	)
	Repayment of mortgage loans in connection with IPO			(45,962	)
			$	201,014

(1)	In December 2004, the Company obtained a new construction loan to fund the development and construction of Cullen Oaks — Phase II, a leasehold facility scheduled to open in August 2005. The loan has a term of 18 months and bears interest, at the Company’s option, at either Prime (5.25% at December 31, 2004) or LIBOR plus 2.0% (4.4% at December 31, 2004).

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8.	Debt — (Continued)

								Interest Rate at
		Principal				Stated		December 31,
Property		Outstanding(3)				Interest Rate		2004				Maturity Date				Amortization
Cullen Oaks(1)		$	17,045			LIBOR +1.90%			5.54	%			November 2008				30 years
Cullen Oaks — Phase II(2)			540			(2)			4.41	%			June 2006				n/a
University Village at Boulder Creek			16,540			5.71%			5.71	%			November 2012				30 years
River Club Apartments			18,533			8.18%			8.18	%			August 2010				30 years
River Walk Townhomes			7,683			8.00%			8.00	%			September  2009				30 years
Village at Alafaya Club			20,474			8.16%			8.16	%			August 2010	(4)			30 years
Village at Blacksburg			21,352			7.50%			7.50	%			January 2011				30 years
Commons on Apache			7,668			7.66%			7.66	%			June 2009				30 years
Callaway House			19,724			7.10%			7.10	%			April 2011				30 years
Total		$	129,559			Wtd Avg Rate			7.18	%

(1)	Floating rate on this mortgage loan was swapped to a fixed rate of 5.54%. This swap terminates in November 2008, at which time the interest rate will revert back to a variable rate. The TRS has guaranteed payment of this indebtedness.
(2)	Construction loan was obtained in December 2004. For each borrowing, the Company has the option of choosing either a Prime rate or LIBOR plus 2.0%. The Company has an option to extend the maturity of this loan through November 2008. The TRS has guaranteed this indebtedness, up to a limit of $4.0 million of construction loan principal plus interest and litigation fees potentially incurred by the lender. This guaranty will remain in effect until the balance on the related construction loan is paid in full.
(3)	For federal income tax purposes, the aggregate cost of the loans is equal to the carrying amount.
(4)	Represents the Anticipated Repayment Date, as defined in the loan agreement. If the loan is not repaid on the Anticipated Repayment Date, then certain monthly payments including excess cash flow, as defined, become due through the maturity date of August 2030.

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8.	Debt — (Continued)

								Principal				Weighted						Required
								December 31,				Average						Monthly
Series		Mortgaged Facilities Subject to Leases		Original				2004				Rate				Maturity Through		Debt Service
1999		University Village-PVAMU/ TAMIU		$	39,270			$	35,570				7.50%			September 2023		$	302
2001		University College–PVAMU			20,995				19,855				7.40%			August 2025			158
2003		University College–PVAMU			4,325				4,230				5.90%			August 2028			28
		Total/weighted average rate		$	64,590			$	59,655				7.35%					$	488

		Scheduled				Due at
		Principal				Maturity				Total
2005		$	3,001			$	—			$	3,001
2006			3,216				540				3,756
2007			15,241				—				15,241
2008			3,617				15,972				19,589
2009			3,511				14,389				17,900
Thereafter			69,580				71,947				141,527
		$	98,166			$	102,848			$	201,014

9.	Incentive Award Plan

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9.	Incentive Award Plan — (Continued)

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10.	Interest Rate Hedges

11.	Related Party Transactions

12.	Lease Commitments

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12.	Lease Commitments — (Continued)

		Operating				Capital
2005		$	527			$	275
2006			509				182
2007			482				135
2008			478				95
2009			480				28
Thereafter			7,334				—
Total minimum lease payments			9,810				715
Amount representing interest			—				117
Balance of minimum lease payments		$	9,810			$	598

13.	Concentration of Risks

14.	Commitments and Contingencies

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14.	Commitments and Contingencies — (Continued)

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14.	Commitments and Contingencies — (Continued)

15.	Discontinued Operations

			Year Ended December 31,
			2004				2003				2002
Total revenues			$	2,767			$	2,769			$	2,932
Total operating expenses				1,738				1,776				1,625
	Operating income			1,029				993				1,307
Total nonoperating expenses				757				986				988
	Net income		$	272			$	7			$	319

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15.	Discontinued Operations — (Continued)

		December 31,
		2004				2003
Cash and cash equivalents		$	176			$	403
Other assets		$	119			$	1,112
Land, buildings and improvements, and furniture, fixtures, and equipment, net of accumulated depreciation		$	22,350			$	31,013
Accounts payable and accrued expenses		$	126			$	490
Notes payable		$	—			$	25,811
Other liabilities		$	311			$	513

16.	Segments

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16.	Segments — (Continued)

		Year Ended December 31,
		2004				2003				2002
Owned Off-Campus Properties
Rental revenues		$	35,497			$	31,499			$	29,702
Interest and other income			21				—				47
Total revenues from external customers			35,518				31,499				29,749
Operating expenses before depreciation and amortization			15,597				14,583				13,893
Interest expense			11,049				11,700				11,070
Insurance gain			654				—				—
Operating income before depreciation, amortization, minority interests and allocation of corporate overhead		$	9,526			$	5,216			$	4,786
Depreciation and amortization		$	6,520			$	5,667			$	5,081
Capital expenditures		$	61,120			$	21,777			$	20,901
Total segment assets at December 31,		$	269,643			$	201,676			$	206,659
On-Campus Participating Properties
Rental revenues		$	17,418			$	16,482			$	16,055
Interest and other income			61				27				67
Total revenues from external customers			17,479				16,509				16,122
Operating expenses before depreciation, amortization, and ground/facility lease			7,381				7,411				7,124
Ground/facility lease			812				489				643
Interest expense			5,469				5,181				5,191
Insurance gain			273				—				—
Operating income before depreciation, amortization, minority interests and allocation of corporate overhead		$	4,090			$	3,428			$	3,164
Depreciation and amortization		$	3,532			$	3,271			$	3,152
Capital expenditures		$	1,881			$	3,788			$	396
Total segment assets at December 31,		$	79,686			$	89,502			$	79,501
Development Services
Development and construction management fees from external customers		$	5,803			$	8,010			$	5,481
Intersegment revenues			234				456				222
Total revenues			6,037				8,466				5,703
Operating expenses			3,796				3,854				3,934
Operating income before depreciation, amortization, minority interests and allocation of corporate overhead		$	2,241			$	4,612			$	1,769
Total segment assets at December 31,		$	12,879			$	34,639			$	13,807
Property Management Services
Property management fees from external customers		$	2,105			$	1,189			$	945
Intersegment revenues			1,152				983				930
Total revenues			3,257				2,172				1,875
Operating expenses			1,480				1,523				1,675
Operating income before depreciation, amortization, minority interests and allocation of corporate overhead		$	1,777			$	649			$	200
Total segment assets at December 31,		$	1,141			$	615			$	261
Reconciliations
Total segment revenues		$	62,291			$	58,646			$	53,449
Elimination of intersegment revenues			(1,386	)			(1,439	)			(1,152	)
Total consolidated revenues		$	60,905			$	57,207			$	52,297
Segment operating income before depreciation, amortization, minority interests and allocation of corporate overhead		$	17,634			$	13,905			$	9,919
Depreciation and amortization			11,184				9,426				8,623
Net unallocated expenses relating to corporate overhead			8,850				5,462				4,079
Income tax benefit			728				—				—
Minority interests			100				16				30
Loss from continuing operations		$	(1,572	)		$	(967	)		$	(2,753	)
Total segment assets		$	363,349			$	326,432			$	300,228
Unallocated corporate assets			4,279				4,134				7,430
Total assets		$	367,628			$	330,566			$	307,658

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17.	Quarterly Financial Information (Unaudited)

		2004
		1st Quarter				2nd Quarter				3rd Quarter				4th Quarter				Total
Total revenues		$	16,172			$	14,331			$	13,971			$	19,116			$	63,590	(1)
Net income (loss)		$	1,529			$	(1,001	)		$	(5,208	)		$	3,341			$	(1,339	)
Net income per share-basic		$	—			$	—			$	—			$	0.26			$	0.14	(2)
Net income per share-diluted		$	—			$	—			$	—			$	0.26			$	0.15	(2)

		2003
		1st Quarter				2nd Quarter				3rd Quarter				4th Quarter				Total
Total revenues		$	15,647			$	14,083			$	14,026			$	16,167			$	59,923	(1)
Net income (loss)		$	1,347			$	(370	)		$	(1,544	)		$	(377	)		$	(944	)

(1)	Includes revenues from discontinued operations of $2.8 million for each of the years ended December 31, 2004 and 2003.
(2)	Represents the period from August 17, 2004 (IPO date) through December 31, 2004.

18.	Subsequent Events

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19.	Schedule of Real Estate and Accumulated Depreciation

										Initial Costs								Basis Step-Up												Total Costs
														Buildings and								Buildings and												Buildings and
														Improvements								Improvements				Costs								Improvements
														and								and				Capitalized								and
														Furniture,								Furniture,				Subsequent								Furniture,								Depreciation
														Fixtures and								Fixtures and				to								Fixtures and								Accumulated
		Units				Beds				Land				Equipment				Land				Equipment				Acquisition				Land				Equipment				Total(4)				(1)				Encumbrances				Year Built
Owned Off-campus Properties
Commons on Apache			111				444			$	1,464			$	8,072			$	—			$	—			$	1,163			$	1,464			$	9,235			$	10,699			$	1,826			$	7,668				1987
The Village at Blacksburg			288				1,056				3,826				22,155				—				—				1,353				3,826				23,508				27,334				2,797				21,352				1990/1998
The Village on University			288				918				5,508				31,264				—				—				1,104				5,508				32,368				37,876				4,698				—				1998
River Club Apartments			266				794				3,478				19,655				—				—				660				3,478				20,315				23,793				3,151				18,533				1996
River Walk Townhomes			100				340				1,442				8,194				—				—				292				1,442				8,486				9,928				1,312				7,683				1998
The Callaway House			173				538				5,081				20,499				—				—				498				5,081				20,997				26,078				2,615				19,724				1999
The Village at Alafaya Club			228				840				3,788				21,851				—				—				531				3,788				22,382				26,170				2,793				20,474				1999
The Village at Science Drive			192				732				4,673				19,021				—				—				125				4,673				19,146				23,819				1,636				—				2000
University Village at Boulder Creek			82				309				939				14,887				96				1,506				443				1,035				16,836				17,871				1,211				16,540				2002
University Village at Fresno			105				406				900				6,838				29				483				8,232				929				15,553				16,482				197				—				2004
Univ. Village at San Bernardino(5)			132				480				1,836				7,701				95				1,000				11,871				1,931				20,572				22,503				153				—				2004
University Village at TU			220				749				—				8,876				—				2,380				29,863				—				41,119				41,119				474				—				2004
University Village at Sweet Home(2)			269				828				2,554				—				—				—				9,087				2,554				9,087				11,641				—				—				2005
Subtotal			2,454				8,434			$	35,489			$	189,013			$	220			$	5,369			$	65,222			$	35,709			$	259,604			$	295,313			$	22,863			$	111,974
On-Campus Participating Properties
University Village — PVAMU			612				1,920			$	—			$	36,506			$	—			$	—			$	1,334			$	—			$	37,840			$	37,840			$	10,639			$	30,851				1996/97/98
University Village — TAMIU			84				252				—				5,844				—				—				65				—				5,909				5,909				1,682				4,719				1997
University College — PVAMU			756				1,470				—				22,650				—				—				1,013				—				23,663				23,663				3,749				24,085				2000/2003
Cullen Oaks Phase I			231				525				—				17,642				—				—				481				—				18,123				18,123				2,236				17,045				2001
Cullen Oaks Phase II(3)			180				354				—				—				—				—				835				—				835				835				—				540				2005
Subtotal			1,863				4,521				—				82,642				—				—				3,728				—				86,370				86,370				18,306				77,240
Total-all properties			4,317				12,955			$	35,489			$	271,655			$	220			$	5,369			$	68,950			$	35,709			$	345,974			$	381,683			$	41,169			$	189,214

(1)	The depreciable lives for buildings and improvements and furniture, fixtures and equipment range from three to forty years.
(2)	University Village at Sweet Home is owned through a joint venture and commenced construction in August 2004. Costs capitalized subsequent to acquisition represent construction costs associated with the development of this property. Year built represents the scheduled completion date.
(3)	Cullen Oaks Phase II is a leasehold property that commenced construction in December 2004. Costs capitalized subsequent to acquisition represent construction costs associated with the development of this property. Year built represents the scheduled completion date.
(4)	Total aggregate costs for Federal income tax purposes is $458.4 million.
(5)	University Village at San Bernardino was sold in January 2005. See note 18.

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	The changes in the Company’s and the Predecessor’s investments in real estate and related accumulated depreciation for each of the years ended December 31, 2004, 2003, and 2002 are as follows:

			For the Year Ended December 31,
			2004								2003								2002
			Off-campus(1)				On-campus(2)				Off-campus(1)				On-campus(2)				Off-campus(1)				On-campus(2)
Investments in Real Estate:
	Balance, beginning of year		$	240,504			$	92,463			$	222,162			$	80,699			$	200,886			$	80,304
	Basis step-up			5,589				—				—				—				—				—
	Acquisition of land for development			2,532				—				—				—				—				—
	Improvements and development expenditures			61,286				1,883				19,267				11,764				21,276				437
	Disposition of properties			—				(7,976	)			(925	)			—				—				(42	)
	Distribution of non-core assets to Predecessor owners			(14,598	)			—				—				—				—				—
	Balance, end of year		$	295,313			$	86,370			$	240,504			$	92,463			$	222,162			$	80,699
Accumulated Depreciation:
	Balance, beginning of year		$	(17,597	)		$	(14,774	)		$	(11,930	)		$	(11,503	)		$	(6,849	)		$	(8,351	)
	Depreciation for the year			(6,520	)			(3,532	)			(5,667	)			(3,271	)			(5,081	)			(3,152	)
	Distribution of non-core assets to Predecessor owners			1,254				—				—				—				—				—
	Balance, end of year		$	(22,863	)		$	(18,306	)		$	(17,597	)		$	(14,774	)		$	(11,930	)		$	(11,503	)

(1)	Owned off-campus properties
(2)	On-campus participating properties

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	/s/ Ernst & Young, LLP

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Revenues:
	Rents		$	6,725,502
	Other income			1,768,308
Total revenues				8,493,810
Certain expenses:
	Real estate taxes			586,472
	Property operating expenses			2,991,602
	Management fees			281,227
Total certain expenses				3,859,301
Revenues in excess of certain expenses			$	4,634,509

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	/s/ Ernst & Young, LLP

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						For the
		For the				Year Ended
		Three Months Ended				December 31,
		March 31, 2005				2004
		(Unaudited)
Revenues:
Rents		$	1,510,634			$	6,008,089
Other income			59,266				164,148
Total revenues			1,569,900				6,172,237
Certain expenses:
Real estate taxes			115,069				483,378
Property operating expenses			538,404				2,253,152
Management fees			47,187				185,249
Total certain expenses			700,660				2,921,779
Revenues in excess of certain expenses		$	869,240			$	3,250,458

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1.	Basis of Presentation

2.	Use of Estimates

3.	Rental Revenue Recognition

4.	Management Fees

5.	Interim Unaudited Financial Information

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