Edgar Filing: Education Realty Trust, Inc.

EDR-2013.12.31-10K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K



(Mark One)
x		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2013



o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-32417

Education Realty Trust, Inc.

(Exact Name of Registrant as Specified in Its Charter)



Maryland		20-1352180
(State or Other Jurisdiction of Incorporation or Organization)		(IRS Employer Identification No.)



999 South Shady Grove Road, Suite 600 Memphis, Tennessee		38120
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s Telephone Number, Including Area Code (901) 259-2500

Securities registered pursuant to Section 12(b) of the Act:



Title of Each Class		Name Of Each Exchange On Which Registered
Common Stock, $0.01 par value per share		New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes x No o

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes o No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):



Large accelerated filer x		Accelerated filer o
Non-accelerated filer o (Do not check if a smaller reporting company)		Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x

As of June 28, 2013, the last business day of the registrant’s most recently completed second quarter, the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was approximately $1.1 billion, based on the closing sales price of $10.23 per share as reported on the New York Stock Exchange. (For purposes of this calculation all of the registrant’s directors and executive officers are deemed affiliates of the registrant.)

As of February 24, 2014, the registrant had 115,013,964 shares of common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

To the extent stated herein, the Registrant incorporates by reference into Part III of this Annual Report on Form 10-K, or Annual Report, portions of its Definitive Proxy Statement on Schedule 14A for the 2014 Annual Meeting of Stockholders to be filed subsequently with the Securities and Exchange Commission.

FORWARD-LOOKING STATEMENTS

Our disclosure and analysis in this Annual Report on Form 10-K and the documents that are or will be incorporated by reference herein contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Forward-looking statements provide our current expectations or forecasts of future events and are not statements of historical fact. These forward-looking statements include information about possible or assumed future events, including, among other things, discussion and analysis of our future financial condition, results of operations and funds from operations, our strategic plans and objectives, cost management, occupancy and leasing rates and trends, liquidity and ability to refinance our indebtedness as it matures, anticipated capital expenditures (and access to capital) required to complete projects, amounts of anticipated cash distributions to our stockholders in the future and other matters. Words such as “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates” and variations of these words and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond our control, are difficult to predict and/or could cause actual results to differ materially from those expressed or forecast in the forward-looking statements.

Forward-looking statements involve inherent uncertainty and may ultimately prove to be incorrect or false. You are cautioned not to place undue reliance on forward-looking statements. Except as otherwise may be required by law, we undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or actual operating results. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including, but not limited to:


•	risks and uncertainties related to the national and local economies and the real estate industry in general and in our specific markets (including university enrollment conditions and admission policies, and our relationship with these universities);


•	volatility in the capital markets;


•	rising interest and insurance rates;


•	competition from university-owned or other private collegiate housing and our inability to obtain new tenants on favorable terms, or at all, upon the expiration of existing leases;


•	availability and terms of capital and financing, both to fund our operations and to refinance our indebtedness as it matures;


•	legislative or regulatory changes, including changes to laws governing collegiate housing, construction and real estate investment trusts;


•	our possible failure to qualify as a real estate investment trust and the risk of changes in laws affecting real estate investment trusts;


•	our dependence upon key personnel whose continued service is not guaranteed;


•	our ability to identify, hire and retain highly qualified executives in the future;


•	availability of appropriate acquisition and development targets;


•	failure to integrate acquisitions successfully;


•	the financial condition and liquidity of, or disputes with, our joint venture and development partners;


•	impact of ad valorem, property and income taxes;


•	changes in generally accepted accounting principles;


•	construction delays, increasing construction costs or construction costs that exceed estimates;


•	potential liability for uninsured losses and environmental liabilities;


•	lease-up risks; and


•	the potential need to fund improvements or other capital expenditures out of operating cash flow.

This list of risks and uncertainties, however, is only a summary of some of the most important factors and is not intended to be exhaustive. You should carefully review the risks described under “Item 1A. — Risk Factors” below. New factors may also emerge from time to time that could materially and adversely affect us.

EDUCATION REALTY TRUST, INC. FISCAL 2013 FORM 10-K



PART I		1
Item 1.	Business.	1
Item 1A.	Risk Factors.	9
Item 1B.	Unresolved Staff Comments.	22
Item 2.	Properties.	22
Item 3.	Legal Proceedings.	27
Item 4.	Mine Safety Disclosures.	27
PART II		27
Item 5.	Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.	27
Item 6.	Selected Financial Data.	31
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations.	35
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk.	60
Item 8.	Financial Statements and Supplementary Data.	61
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.	101
Item 9A.	Controls and Procedures.	101
Item 9B.	Other Information.	101
PART III		101
Item 10.	Directors, Executive Officers and Corporate Governance.	101
Item 11.	Executive Compensation.	101
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.	102
Item 13.	Certain Relationships and Related Transactions, and Director Independence.	102
Item 14.	Principal Accountant Fees and Services.	102
PART IV		103
Item 15.	Exhibits and Financial Statement Schedules.	103
	Signatures.	104
	Index to Signatures.	105

PART I

Item 1. Business.

Our Company

Education Realty Trust, Inc., or we, us, our, EdR or the Trust, is a self-managed and self-advised real estate investment trust, or REIT, incorporated in the state of Maryland in July 2004 to develop, acquire, own and manage collegiate housing communities located near university campuses. We were formed to continue and expand upon the collegiate housing business of Allen & O’Hara, Inc., a company with over 40 years of experience as an owner, manager and developer of collegiate housing. We selectively develop collegiate housing communities for our own account and also provide third-party development consulting services on collegiate housing development projects for universities and other third parties. As of December 31, 2013, we owned 49 collegiate housing communities located in 23 states containing 27,982 beds in 9,933 apartment units on or near 41 university campuses. As of December 31, 2013, we provided third-party management services for 22 collegiate housing communities located in 10 states containing 11,722 beds in 3,777 apartment units on or near 18 university campuses.

All of our assets are held by, and we conduct substantially all of our activities through, Education Realty Operating Partnership, LP, our Operating Partnership, and its wholly-owned subsidiaries, EDR Management Inc., or our Management Company, and EDR Development LLC, or our Development Company. The majority of our operating expenses are borne by our Operating Partnership, our Management Company, our Development Company or our communities, as the case may be.

We are the sole general partner of our Operating Partnership. As a result, our Board of Directors, or the Board, effectively directs all of our Operating Partnership’s affairs. We own 99.3% of the outstanding partnership units of our Operating Partnership, and 0.7% of the partnership units are held by the former owners of our initial properties and assets, including members of our management team and Board.

University Towers Operating Partnership, LP, or the University Towers Partnership, which is our affiliate, holds, owns and operates our University Towers property located in Raleigh, North Carolina. We own 72.7% of the partnership units in the University Towers Partnership, and the remaining 27.3% of the partnership units in the University Towers Partnership are held by the former owners of our initial properties and assets, including a member of our Board.

REIT Status and Taxable REIT Subsidiaries

We have elected to be taxed as a real estate investment trust, or REIT, for federal income tax purposes. With the exception of income from our taxable REIT subsidiaries, or our TRSs, income earned by the REIT is generally not subject to income taxes. In order to qualify as a REIT, a specified percentage of our gross income generally must be derived from real property sources, which would exclude our income from providing development and management services to third parties as well as our income from certain services afforded to our tenants. In order to avoid realizing such income in a manner that would adversely affect our ability to qualify as a REIT, we provide some services through our Management Company and our Development Company, with our Management Company being treated as a TRS. Our Management Company is wholly owned and controlled by our Operating Partnership, and our Management Company wholly owns our Development Company. Our Development Company is a disregarded entity for federal income tax purposes and all assets owned and income earned by our Development Company are deemed to be owned and earned by our Management Company.

Business and Growth Strategy

Our primary business objective is to achieve sustainable long-term growth in cash flow per share in order to maximize long-term stockholder value. We intend to achieve this objective by (i) acquiring collegiate housing communities nationwide that meet our focused investment criteria, (ii) selectively developing properties for our own account, (iii) building our third-party business of management services and development consulting services and (iv) maximizing net operating income from the operation of our owned properties through proactive and goal-oriented property management strategies.

Our business has three reportable segments that are identified by their distinct customer base and services provided: collegiate housing leasing, development consulting services and management services. For a discussion of revenues, profit and loss and total assets by segment see “Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 11, “Segments” to our accompanying consolidated financial statements.

Acquisition and Development Strategy

Acquisitions

We seek to acquire high-quality, well-located communities with modern floor plans and amenities. Our ideal acquisition targets generally are located in markets that have stable or increasing collegiate populations and high barriers to entry. We also seek to acquire investments in collegiate housing communities that possess sound market fundamentals but are under-performing and would benefit from re-positioning, renovation and/or improved property management. We consider the following property and market factors to identify potential property acquisitions:


•	university and campus reputation;


•	competitive admissions criteria;


•	limited number of on-campus beds and limited plans for expansion;


•	distance of property from campus;


•	property unit mix;


•	competition;


•	significant out-of-state enrollment;


•	past operating performance;


•	potential for improved management;


•	ownership and capital structure;


•	presence of desired amenities;


•	maintenance and condition of the property;


•	access to a university-sponsored or public transportation line depending on location; and


•	parking availability.

Conversely, subject to appropriate market conditions, we may dispose of certain non-strategic collegiate housing communities. We continually assess all of our communities, the markets in which they are located and the colleges and universities they serve, to determine if any dispositions are necessary or appropriate.

Developments

We develop collegiate housing communities for our ownership, and we plan to increase self-development activity going forward. The On-Campus Equity Plan, or The ONE Plan^SM, is our private equity program for universities, which allows universities to use EdR's equity and financial stability to develop and revitalize campus housing while preserving their credit capacity for other campus projects. The ONE Plan^SM offers one service provider and one equity source to universities seeking to modernize on-campus housing to meet the needs of today’s students. EdR has completed the development of two wholly-owned collegiate housing communities located on the campus of Syracuse University in Syracuse, New York. EdR owns and manages the communities under a long-term ground lease from Syracuse University. EdR has developed a high-rise apartment community on university land at the University of Texas at Austin campus under The ONE Plan^SM. EdR owns and manages the community under a long-term ground lease from the University of Texas. In December 2011, we were selected by the University of Kentucky, or UK, to develop, own and manage a multi-phase project aimed at revitalizing UK’s on-campus housing, which could potentially include the revitalization and replacement of UK's campus housing properties to over 9,000 beds within five to seven years utilizing the ONE Plan^SM. Central Hall I & II, the first community in the multi-phase project, opened in August 2013. In the fourth quarter of 2012, EdR received approval from the UK board of trustees and began construction on Phase II of the project, which will include four communities with 2,381 beds. Phase II is on schedule to be completed in the summer of 2014. Phase II-B was approved in May 2013. Construction on Woodland Glen III, IV and V, the 1,610-bed freshman live-learn community, is progressing as planned. Phase II-C, which includes the construction of 1,141 beds to be known as Limestone Park I & II was approved in early 2014 and is scheduled to be completed in the fall of 2016. We believe the Trust will continue to enter into more partnerships under The ONE Plan^SM due to our years of success in the collegiate housing business. We believe the ONE Plan^SM allows us to provide the perfect opportunity to universities to develop new housing and boost enrollment with a plan tailored to specific needs while simultaneously preserving the university’s credit capacity.

In total, we currently have eleven active owned developments that we expect to deliver in 2014, 2015 and 2016, including wholly-owned developments at the University of Connecticut and University of Colorado.

Joint Ventures

Starting in 2011, we began entering into joint venture agreements to develop, own and manage properties near the University of Alabama, which opened in August 2012; Arizona State University-Downtown Phoenix and University of Mississippi, both of which opened in August 2013; and Duke University, which is expected to open in the summer of 2014. We have the majority ownership interest in each property.

In some cases, we hold a non-majority ownership interest in properties and earn a fee for the management of the properties. In December 2012, the Trust invested in a joint venture with GEM Realty Capital to jointly develop and own new off-campus collegiate housing near the University of Minnesota. The Trust is a 50% owner and will manage the community once the development is completed. The Trust entered into a second joint venture with GEM Realty Capital to jointly develop and own new off-campus collegiate housing near the University of Georgia. The Trust is a 50% owner and will manage the community once the development is completed. Our joint venture strategy enables us to source and take advantage of opportunities not otherwise available to us and to accretively diversify our portfolio by expanding into geographic markets where we are not currently present with lower capital requirements than if we acquired the properties on our own. We expect to continue pursuing joint venture arrangements in the future.

Operating Strategy

We seek to maximize net operating income of the collegiate housing communities that we own and manage through the following operational strategies.

Controlling costs. We seek to maximize property-level profitability through the use of cost control systems and our focused on-site management personnel. Some of our specific cost control initiatives include:


•	establishing internal controls and procedures for consistent cost control throughout our communities;


•	operating with flat property-level management structures, minimizing multiple layers of management; and


•	negotiating service-level pricing arrangements with national and regional vendors and requiring corporate-level approval of service agreements for each community.

Maintain and develop strategic relationships. We believe that establishing and maintaining relationships with universities and developers, owners and brokers of collegiate housing properties is important to the ongoing success of our business. We believe that these relationships will continue to provide us with referrals that enhance our leasing efforts, opportunities for additional acquisitions of collegiate housing communities and contracts for third-party services.

Proactive marketing practices. We have developed and implemented proactive marketing practices to enhance the visibility of our collegiate housing communities and to optimize our revenue. We study our competitors, our residents and university policies affecting enrollment and housing. Based on our findings at each property, we formulate a marketing and sales plan for each academic leasing period. This plan is closely monitored and adjusted, if necessary, throughout the leasing period using our PILOT leasing management system. We intend to continue to market our properties to students, parents and universities by emphasizing collegiate-oriented living areas, state-of-the-art technology and infrastructure, a wide variety of amenities and services and close proximity to university campuses.

Develop and retain personnel. We staff each collegiate housing community that we own or manage with a full-service on-site property management team. Each of our property management teams includes community assistants who plan activities and interact with residents, enhancing their college experiences. We have developed programs and procedures to train each team of on-site employees and to provide them with corporate-based support for each essential operating function. To retain employees, we have developed an incentive-based compensation structure that is available to all of our on-site personnel.

Third-Party Services Strategy

In addition to developing communities for our ownership and managing our owned collegiate housing communities, we seek to provide development and management consulting services for universities and other third-party owners who rely upon the private sector for assistance in developing and managing their collegiate housing properties. We perform third-party services in order to enhance our reputation with universities and to benefit our primary goal of owning high-quality collegiate housing communities. We perform third-party services for collegiate housing communities serving some of the nation’s most prominent systems of higher education, including the University of North Carolina, the California State University System and the Pennsylvania State System of Higher Education. In order to comply with the rules applicable to our status as a REIT, we

provide our third-party services through our Development Company and our Management Company. Unlike the income earned from our properties owned by the Trust, the income earned by our Development Company and our Management Company is subject to regular federal income tax and state and local income taxes where applicable.

Third-party development consulting services

We provide third-party development consulting services primarily to universities seeking to modernize their on-campus collegiate housing communities but also to other third-party investors. We typically are notified that we have been awarded development consulting services projects on the basis of a competitive award process and thereafter begin work on the project. In the case of tax exempt bond-financed projects, definitive contracts are not executed until bond closing. Our development consulting services typically include the following:


•	market analysis and evaluation of housing needs and options;


•	cooperation with university in architectural design;


•	negotiation of ground lease, development agreement, construction contract, architectural contract and bond documents;


•	oversight of architectural design process;


•	coordination of governmental and university plan approvals;


•	oversight of construction process;


•	design of layout, purchase and installation of furniture;


•	pre-opening marketing to potential residents; and


•	obtaining final approvals of construction.

By providing these services, we are able to observe emerging trends in collegiate housing development and market acceptance of unit and community amenities. Our development consulting services also provide us with opportunities to obtain additional third-party property management contracts. Of the 23 clients for whom we have provided development-consulting services since 2000, we currently provide third-party management services under contracts with 11 of those clients while the 12 remaining clients alternatively elected to manage the communities in-house under their existing infrastructure. In 2013, our fees from third-party development consulting services represented 2.2% of our revenues, excluding operating expense reimbursements.

Since 2000, we have provided third-party development consulting services to clients for projects totaling over $1.5 billion in value. We are currently providing third-party development services pursuant to signed definitive contracts with projects under construction at Mansfield University of Pennsylvania, Clarion University of Pennsylvania, West Chester University of Pennsylvania and Wichita State University. The aggregate project cost of these four projects is estimated to be approximately $219.7 million.

Third-party management services

We provide third-party management services for collegiate housing communities owned by educational institutions, charitable foundations and others. Our management services typically cover all aspects of operations, including residence life and student development, marketing, leasing administration, strategic relationships, information systems and accounting services. These services are comparable to the services that we provide for our owned properties. We typically provide these services pursuant to multi-year management agreements. These agreements usually have an initial term of two to five years with renewal options of similar terms. We believe that providing these services allows us to leverage our existing management expertise and infrastructure. For the year ended December 31, 2013, our fees from third-party management services represented 2.1% of our revenue, excluding operating expense reimbursements.

The following table presents certain summary information regarding the collegiate housing communities that we managed for other owners as of December 31, 2013:



Property	University	# of Beds	# of Units
On-campus properties
University Park – Calhoun Street Apartments	University of Cincinnati	750	288
Reinhard Villages	Clarion University of Pennsylvania	656	180
University Park	Salisbury University (Maryland)	890	253
Bettie Johnson Hall	University of Louisville	490	224
Herman & Heddy Kurz Hall	University of Louisville	402	224
Billy Minardi Hall	University of Louisville	38	20
Community Park	University of Louisville	363	101
University Village	California State University — San Marcos	642	126
Centennial Hall	SUNY College of Environmental Science and Forestry	466	213
Total on-campus		4,697	1,629

Off-campus properties
Granville Towers	University of North Carolina at Chapel Hill	1,317	363
Honeysuckle Apartments	Bloomsburg University of Pennsylvania	407	104
Evergreen Commons	Lock Haven University of Pennsylvania	408	108
Campus Village	University of Colorado — Denver	685	210
Upper Eastside Lofts	Sacramento State University	350	134
100 Midtown	Georgia Tech and Georgia State	332	118
The Courtyards	University of Michigan	896	320
Vulcan Village I	California University of Pennsylvania	432	108
Vulcan Village II	California University of Pennsylvania	338	91
University Village⁽¹⁾	University of North Carolina — Greensboro	600	203
Wesley House	University of California — Berkeley	89	8
The Quad	California State University — San Marcos	599	60
929	Johns Hopkins University	572	321
Total off-campus		7,025	2,148
Totals (for both on- and off-campus)		11,722	3,777


(1)	EdR holds a noncontrolling interest in the community pursuant to its joint venture arrangements.

Our Operations

We staff each of our owned and managed collegiate housing communities with a full-service property management team. We typically staff each property with one community manager, a marketing/leasing manager, a resident services manager, a maintenance supervisor, one on-site resident community assistant for each 50-85 residents and general office and maintenance staff. Each property management team markets, leases and manages the community with a focus on maximizing its profitability. In addition, each property management team is trained to provide social and developmental opportunities for residents, enhancing the residents’ college experiences as well as the desirability of our communities.

We have developed policies and procedures to carefully select and develop each team of on-site employees and to provide each team with corporate-based support for each essential operating area, including lease administration, sales/marketing, community and university relations, student life administration, maintenance, loss prevention, accounting, human resources/benefits administration and information systems. The corporate level personnel responsible for each of these areas support each community manager’s leadership role and are available as a resource to the community managers around the clock.

Residence Life and Student Development

Our Vice President of Client Relations designs and directs our residence life program. Our programs are developed at the corporate level and implemented at each community by our community assistants, together with our other on-site personnel. We provide educational, social and recreational activities designed to help students achieve academic goals, promote respect and harmony throughout the community and help bridge interaction with the respective university. Examples of our residence life and student development programs include:


•	community-building and social activities geared to university-related events, holidays, public safety and education;


•	study and attention skills counseling;


•	career development, resume writing and employment search skill training;


•	sponsorship of intramural sport teams, academic clubs and alumni-based activities;


•	parent and resident appreciation events;


•	community service activities including recycling, blood drives, food drives and student volunteer committees;


•	lectures focused on social issues, including effective communication, multi-cultural awareness and substance abuse;


•	university outreach activities; and


•	voter registration, enrollment and education.

The community assistants perform key roles in the administrative functioning of the community and interface with residents through constructive programs, activities and listening to resident interests and concerns. Our on-site leadership selects residents to serve as community assistants who meet criteria established by our Vice President of Client Relations.

Marketing

We begin our annual marketing campaign by thoroughly segmenting the student population attending each of the primary universities where our collegiate housing communities are located, and compiling market surveys of comparable collegiate apartment properties. With this information, we formulate a marketing/sales strategy that consists of a renewal campaign for current residents and a broader campaign directed at the eligible student population. We assess university regulations regarding housing requirements to avoid targeting segments of the market in which students are not eligible to live off-campus.

We typically begin our renewal campaign in October of each year. Signage, social networking, direct mailings to the students and their parents, appreciation parties and staff selling incentives are key elements of the renewal campaign. The community assistant team plays a key role in communicating the renewal message throughout its assigned property area. We use a database of current resident demographic data to direct sales information to primary feeder high schools, particularly where new freshmen are eligible to live off-campus. Other database criteria include gender, high school location, prior apartment community, academic class standing, field of study and activity preferences.

We appeal to the greater university population through theme-based newspaper advertising campaigns, open house activities, housing fairs conducted by the university, web-based advertising and social networking media. Our professional leasing and marketing staff targets certain university-sponsored on-campus events to distribute handouts displaying our logo and offering incentives to visit our sales center. Wherever possible, our collegiate housing communities appear on university websites in listings of off-campus housing options, together with banner advertising where available.

Leasing

Our standard lease begins in mid-August and runs for approximately 11.5 months, ending July 31 or early August to coincide with the university’s fall academic term. The primary exception to our standard lease term is our University Towers and University Village on Colvin communities, which we generally rent on nine-month academic year leases. Our standard lease is an agreement between the student and parental guarantor, and the specific collegiate housing community. With the exception of our collegiate housing near the University of Connecticut which serves a variety of resident types and rent by the unit, all leases are for a bed in a private or shared bedroom, with rights to share common areas within the unit and throughout the community. This “individual lease” is a strong selling attraction as it limits a student’s liability to the rental for one bedroom instead of burdening the student with shared liability for the entire unit rental amount.

We lease our units by floor plan type using PILOT, our property leasing/marketing system, to maximize full leasing of entire units, avoiding spotty vacancies particularly in the four-bedroom units. We offer roommate-matching services to facilitate full occupancy. We develop waiting lists and monitor popular floor plans that fill to capacity early in the leasing season. If any fully

vacant units remain available after the beginning of any academic semester, we seek to lease such units on a temporary basis to university-related visitors and our tenants’ parents and family members, or keep them available for future leasing to students.

Unlike conventional apartment communities that have monthly move-outs and renewals, our collegiate housing community occupancies remain relatively stable throughout the academic year, but must be entirely re-leased at the beginning of each academic year. Because of the nature of leasing to students, we are highly dependent upon the success of our marketing and leasing efforts during the annual leasing season, generally October through August. Our leasing staff undergo intensive annual professional training to maximize the success of our leasing efforts.

We typically require rent to be paid in 12 equal installments throughout the lease term, with the first installment due on July 15. Residents of University Towers and residence halls that we manage for third parties typically pay their annual rent in two installments on July 1 and December 1. We replace contracted residents who fail to pay the first installment with people on our waiting list or from walk-in traffic while the market is still active with students seeking housing at the commencement of the academic year.

Strategic Relationships

We assign high priority to establishing and nurturing relationships with the administration of each of the primary universities where our collegiate housing communities are located. Our corporate staff establishes this network, and on-site management then sustains it with follow-up by corporate staff during routine visits to the community. As a result of our strategic relationships, universities often refer their students to our properties, thus enhancing our leasing effort throughout the year. These networks create goodwill for our collegiate housing communities throughout the university administration, including departments of admissions, student affairs, public safety, athletics and international affairs.

Most universities promote off-campus housing alternatives to their student population. It is our intention to be among the most preferred off-campus residences and for universities to include our communities in listings and literature provided to students. We seek to obtain student mailing lists used by universities and to be featured in web-based collegiate housing listings wherever permitted by the institution and incorporate these initiatives into our marketing efforts. Our community managers make scheduled personal visits to academic departments at the universities to further our community exposure at this level.

In addition to our university relationships, our management team has developed long-standing relationships with developers, owners and brokers of collegiate housing properties that allow us to identify and capitalize on acquisition opportunities. As a result, we have generated an internal database of contacts that we use to identify and evaluate acquisition candidates. As it is our intention to develop a diverse portfolio of collegiate housing communities, we also develop strategic relationships with equity investors in order to pursue acquisitions through joint venture arrangements.

Competition

Competition from universities

We typically compete for student tenants with the owners of on-campus collegiate housing, which is generally owned by educational institutions or charitable foundations. Educational institutions generally do not have to pay real estate taxes and borrow funds at lower interest rates, while we and other private sector operators pay full real estate tax rates and have higher borrowing costs. The competitive advantages of on-campus collegiate housing also include its physical proximity to the university campus and captive student body. Moreover, many universities have policies requiring students to live in their on-campus facilities during their freshman year.

On-campus housing is limited, however, and most universities are able to house only a small percentage of their students. As a result, educational institutions depend upon, and may serve as referral sources for, private providers of off-campus housing. In addition, off-campus housing facilities tend to offer more relaxed rules and regulations than on-campus properties and therefore tend to be more appealing to students. Off-campus collegiate housing offers freedom from restrictions, such as quiet hours or gender visitation limitations, and is especially appealing to upperclassmen who are transitioning towards independence.

Competition from private owners

We compete with several regional and national owner-operators of off-campus collegiate housing, including two publicly-traded competitors, American Campus Communities, Inc. (NYSE: ACC) and Campus Crest Communities, Inc. (NYSE: CCG). We also compete with privately held developers and other real estate firms and in a number of markets with smaller local owner-operators. Currently, the industry is fragmented with no participant holding a dominant market share. We believe that a number of other large national companies with substantial financial resources may be potential entrants into the collegiate housing business. The entry of one or more of these companies could increase competition for residents and for the acquisition, management and development of collegiate housing properties.

Environmental Matters

As a current or prior owner, manager and developer of real estate, we are subject to various federal, state and local environmental laws, regulations and ordinances and also could be liable to third parties resulting from environmental contamination or noncompliance at our properties. Environmental laws often impose liability without regard to whether the owner or operator knew of, or was responsible for, the presence of the contaminants, and the costs of any required investigation or cleanup of these substances can be substantial. The liability is generally not limited under such laws and could exceed the property’s value and the aggregate assets of the liable party. The presence of contamination or the failure to remediate contamination at our properties also may expose us to third-party liability for personal injury or property damage, or adversely affect our ability to sell, lease or develop the real property or to borrow using the real property as collateral. These and other risks related to environmental matters are described in more detail in “Item 1A. — Risk Factors” below.

Employees

As of December 31, 2013, we had approximately 1,288 employees, including:


•	1,161 on-site employees, including 440 community assistants;


•	31 people in our property management services department;


•	12 people in our development consulting services and construction departments; and


•	84 executive, corporate administration and financial personnel.

Available Information

EdR files periodic and current reports, proxy statements and other information with the Securities and Exchange Commission, or the SEC. All filings made by EdR with the SEC may be copied and read at the SEC’s Public Reference Room at 100 F Street NE, Washington, DC 20549. Information on the operation of the Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330. The SEC also maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC as EdR does. The website address of the SEC is http://www.sec.gov.

Additionally, copies of our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments to the aforementioned filings, are available on EdR’s website, www.EdRTrust.com, free of charge as soon as reasonably practicable after EdR electronically files such reports or amendments with, or furnishes them to, the SEC. The filings can be found in the SEC filings section of our website under the Investor Relations heading. EdR’s website also contains its Corporate Governance Guidelines, Code of Business Conduct and Ethics and the charters of the committees of the Board of Directors. These items can be found in the Corporate Governance section of the Investor Relations section of our website. Reference to EdR’s website does not constitute incorporation by reference of the information contained on the website and should not be considered part of this Annual Report. All of the aforementioned materials may also be obtained free of charge by contacting the Investor Relations Department at Education Realty Trust, Inc., 999 South Shady Grove Road, Suite 600, Memphis, Tennessee 38120.

Item 1A. Risk Factors

Risks Related to Our Properties, Our Business and the Real Estate Industry

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

Our performance and ability to make distributions to our stockholders depends on our ability to generate cash revenues in excess of expenses, scheduled debt service obligations and capital expenditure requirements. Events and conditions generally applicable to owners and operators of real property that are beyond our control may decrease cash available for distribution and the value of our properties.

These events include:


•	local oversupply of collegiate housing units, increased competition or reduction in demand for collegiate housing;


•	inability to collect rent from tenants;


•	the need for capital expenditures at our communities;


•	vacancies or our inability to lease beds on favorable terms;


•	inability to finance property development and acquisitions on favorable terms;


•	increased operating costs, including insurance premiums, utilities and real estate taxes;


•	costs of complying with changes in governmental regulations;


•	the relative illiquidity of real estate investments;


•	changing student demographics;


•	decreases in student enrollment at particular colleges and universities;


•	changes in university policies related to admissions;


•	national, regional and local economic conditions; and


•	rising interest rates.

Our results of operations may be sensitive to changes in overall economic conditions that impact tenant leasing practices.

Our results of operations may be sensitive to changes in overall economic conditions that impact tenant leasing practices. A continuation of ongoing adverse economic conditions affecting disposable tenant income, such as employment levels, business conditions, interest rates, tax rates, fuel and energy costs and other matters, could reduce overall tenant leasing or cause tenants to shift their leasing practices. At this time, it is difficult to determine the breadth and duration of the economic and financial market problems and the many ways in which they may affect our tenants and our business in general. A general reduction in the level of tenant leasing could adversely affect our growth and profitability.

We own, directly or indirectly, interests in collegiate housing communities located near major universities in the United States. Accordingly, we are dependent upon the levels of student enrollment and the admission policies of the respective universities, which attract a significant portion of our leasing base. As a result of the overall market quality deterioration, many students may be unable to obtain student loans on favorable terms. If student loans are not available or their costs are prohibitively high, enrollment numbers for universities may decrease. The demand for, occupancy rates at, rental income from and value of our properties would be adversely affected if student enrollment levels become stagnant or decrease in the current environment. Accordingly, a continuation or further worsening of these difficult financial and macroeconomic conditions could have a significant adverse effect on our cash flows, profitability and results of operations.

Our results of operations are subject to the following risks inherent in the collegiate housing industry: leasing cycles, concentrated lease-up period, seasonal cash flows and increased risk of student defaults during the summer months of 11.5 month leases.

We generally lease our properties under 11.5 month leases, but we may also lease for terms of nine months or less. Furthermore, all of our properties must be entirely re-leased each year, exposing us to increased leasing risk. We may not be able to relet the property on similar terms, if we are able to relet the property at all. The terms of renewal or re-lease (including the cost of required renovations and/or concessions to tenants) may be less favorable to us than the prior lease. If we are unable to relet all or a substantial portion of our properties, or if the rental rates upon such reletting are significantly lower than expected rates, our cash flow from operations and our ability to make distributions to stockholders and service indebtedness could be adversely affected.

In addition, we are subject to increased leasing risk on properties that we acquire that we have not previously managed due to our lack of experience leasing those properties and unfamiliarity with their leasing cycles. Collegiate housing communities are typically leased during a leasing season that begins in November and ends in August of each year. We are therefore highly dependent on the effectiveness of our marketing and leasing efforts and personnel during this season. Prior to the commencement of each new lease period, mostly during the first two weeks of August but also during September at some communities, we prepare the units for new incoming tenants. Other than revenue generated by in-place leases for returning tenants, we do not generally recognize lease revenue during this period referred to as “Turn” as we have no leases in place. In addition, during Turn, we incur significant expenses making our units ready for occupancy, which we recognize immediately. This lease Turn period results in seasonality in our operating results during the third quarter of each year. As a result, we may experience significantly reduced cash flows during the summer months at properties leased for terms shorter than twelve months.

In addition, students leasing under 11.5 month leases may be more likely to default on their rental payments during the summer months. Although we typically require a student’s parents to guarantee the student’s lease, we may have to spend considerable effort and expense in pursuing payment upon a defaulted lease, and our efforts may not be successful.

We rely on our relationships with universities, and changes in university personnel and/or policies could adversely affect our operating results.

In some cases, we rely on our relationships with universities for referrals of prospective tenants or for mailing lists of prospective tenants and their parents. The failure to maintain good relationships with personnel at these universities could therefore have a material adverse effect on us. If universities refuse to make their lists of prospective student-tenants and their parents available to us or increase the costs of these lists, the increased costs or failure to obtain such lists could also have a material adverse effect on us.

We may be adversely affected by a change in university admission policies. For example, if a university reduces the number of student admissions, the demand for our properties may be reduced and our occupancy rates may decline. In addition, universities may institute a policy that a certain class of students, such as freshmen, must live in a university-owned facility, which would also reduce the demand for our properties. While we may engage in marketing efforts to compensate for such policy changes, we may not be able to effect such marketing efforts prior to the commencement of the annual lease-up period or at all.

It is also important that the universities from which our communities draw tenants maintain good reputations and are able to attract the desired number of incoming students. Any degradation in a university’s reputation could inhibit its ability to attract students and reduce the demand for our communities.

We face significant competition from university-owned collegiate housing and from other private collegiate housing communities located within close proximity to universities.

Many students prefer on-campus housing to off-campus housing because of the closer physical proximity to campus and integration of on-campus facilities into the academic community. Universities can generally avoid real estate taxes and borrow funds at lower interest rates, while we and other private-sector operators pay full real estate tax rates and have higher borrowing costs. Consequently, universities often can offer more convenient and/or less expensive collegiate housing than we can, which can adversely affect our occupancy and rental rates.

We also compete with other national and regional owner-operators of off-campus collegiate housing in a number of markets as well as with smaller local owner-operators. There are a number of purpose-built collegiate housing properties that compete directly with us located near or in the same general vicinity of many of our collegiate housing communities. Such competing collegiate housing communities may be newer than our collegiate housing communities, located closer to campus, charge less rent, possess more attractive amenities, or offer more services, shorter lease terms or more flexible leases. The construction of competing properties or decreases in the general levels of rents for housing in competing properties could adversely affect our rental income.

We believe that a number of other large national companies may be potential entrants in the collegiate housing business. In some cases, these potential competitors possess substantially greater financial and marketing resources than we do. The entry of one or more of these companies could increase competition for student tenants and for the acquisition, development and management of other collegiate housing communities.

We may not be able to recover our costs for our development consulting services.

We typically are awarded development consulting services business on the basis of a competitive award process, but definitive contracts are typically not executed until the formal approval of the transaction by the institution’s governing body at the completion of the process. In the intervening period, we may incur significant predevelopment and other costs in the expectation that the development consulting services contract will be executed. These costs could range up to $2.0 million or more per project and typically include architects’ fees to design the property and contractors’ fees to price the construction. We typically seek to enter into a reimbursement agreement with the institution that requires the institution to provide a guarantee of our advances. However, we may not be successful in negotiating such an agreement. In addition, if an institution’s governing body does not ultimately approve our selection and the underlying terms of a pending development, we may not be able to recover these costs from the institution. In addition, when we are awarded development consulting business, we generally receive a significant percentage of our fees for development consulting services upon closing of the project financing, a portion of the fee over the construction period and the balance upon substantial completion of construction. As a result, the recognition and timing of revenues will, among other things differ from the timing of payments and be contingent upon the project owner’s successful structuring and closing of the project financing as well as the timing of construction.

Our contractual obligations arising under third-party development consulting agreements expose us to risks related to the total project cost and on-time completion of the project.

We typically enter into development agreements with universities and other third parties as “developer at risk.” At the same time, we enter into guaranteed maximum price contracts with a general contractor for the construction of the project. In our capacity as “developer at risk,” we usually guarantee that a project will be completed within a certain maximum cost. Any additional costs which are not the responsibility of the contractor, under their guaranteed maximum price contract, or the result of changes by the university or other third-party, would be our responsibility to fund. We also typically guarantee that a project will be completed and ready for occupancy by a date certain in order to meet housing needs for a particular school term. If completion of a project was delayed beyond such date certain, we would be exposed to claims for liquidated damages, which would usually include, but may not be limited to, the cost of housing prospective residents of the community until it was available for occupancy. Although we generally transfer such risks to the general contractor who is responsible for the construction activities of a development project, if we were to experience significant cost-overruns or were to become subject to such a claim or claims, our financial condition, results of operations and/or cash flows could be materially and adversely impacted.

We may not be able to recover internal development costs.

When developing collegiate housing communities for our ownership on university land, definitive contracts are not executed until the formal approval of the transaction by the institution’s governing body at the completion of the process. In the intervening period, we may incur significant predevelopment and other costs in the expectation that a ground lease will be executed. These costs could range up to $1.0 million or more and typically include architects’ fees to design the property and third party fees related to other predevelopment services. If an institution’s governing body does not ultimately approve the lease we will not be able to recover these predevelopment costs.

We may be unable to take advantage of certain disposition opportunities because of additional costs we have agreed to pay if we sell the University Towers collegiate housing community in a taxable transaction.

We issued University Towers Partnership units for our interest in University Towers. So long as the contributing owners of such property hold at least 25% of the University Towers Partnership units, we have agreed to maintain certain minimum amounts of debt on the property so as to avoid triggering gain to the contributing owners. If we fail to do this, we will owe to the contributing owners the amount of taxes that they incur. In each case, the amount of tax is computed assuming the highest federal and state rates. As a result, these agreements may preclude us from selling the restricted property at the optimal time.

Our growth will be dependent upon our ability to acquire and/or develop, lease, integrate and manage additional collegiate housing communities successfully.

We cannot assure you that we will be able to identify real estate investments, including joint ventures, that meet our investment criteria, that we will be successful in completing any acquisition we identify or that any acquisition we complete will produce a return on our investment.

Our future growth will be dependent upon our ability to successfully acquire new properties and enter into joint ventures on favorable terms, which may be adversely affected by the following significant risks:


•	we may be unable to acquire a desired property at all or at a desired purchase price because of competition from other purchasers of collegiate housing;


•	many of our future acquisitions are likely to be dependent on external financing, and we may be unable to finance an acquisition on favorable terms or at all;


•	we may be required to incur significant capital expenditures to improve or renovate acquired properties;


•	we may incur an increase in operating costs or may not have the proceeds available to implement renovations or improvements at existing properties which are necessary to attract and retain tenants;


•	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 vacancy rates and lower than expected rental rates; and

•

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 undisclosed environmental contamination, claims by tenants, vendors or other persons dealing with the former owners of the properties and claims for indemnification by members, directors, officers and others indemnified by the former owners of the properties.

As we acquire additional properties, we will be subject to risks associated with managing new properties, including lease-up and integration risks. Newly acquired properties may not perform as expected, and newly acquired properties may have characteristics or deficiencies unknown to us at the time of acquisition.

We may be unable to invest our capital resources on acceptable terms or at all.

Our ability to achieve our expected levels of financial performance will depend significantly upon our ability to invest efficiently our available capital resources in accretive transactions. Although we seek to maintain a pipeline of suitable investment opportunities, we cannot assure you that we will be able to identify any acquisition and/or development opportunities or other investments that meet our investment objectives or that any investment that we make will produce a positive return. Moreover, our investment pipeline is generally subject to numerous uncertainties and conditions that make it difficult to predict if or when any such potential transactions will be consummated. Accordingly, we may be unable to invest our available capital resources on acceptable terms within the time period that we anticipate, or at all, and these delays could result in additional dilution and may cause our financial results, including funds from operations, or FFO, per share, to fall short of analyst expectations. Moreover, we have significant flexibility in investing our capital resources, and we may use the resources in ways with which our stockholders may not agree or for purposes other than those that we originally contemplated.

Our ownership of properties through ground leases exposes us to the loss of such properties upon breach or termination of the ground leases.

We have acquired an interest in certain of our properties by acquiring a leasehold interest in the property on which the building is located (or under development), and we may acquire additional properties in the future through the purchase of interests in ground leases. As the lessee under a ground lease, we are exposed to the possibility of losing the property (or building we may be developing) upon termination of the ground lease or an earlier breach of the ground lease by us.

We have limited time to perform due diligence on many of our acquired properties, which could subject us to significant unexpected liabilities and under-performance of the acquired properties.

When we enter into an agreement to acquire a property, we often have limited time to complete our due diligence prior to acquiring the property. Because our internal resources are limited, we may rely on third parties to conduct a portion of our due diligence. To the extent these third parties or we underestimate or fail to identify risks and liabilities associated with the properties we acquire, we may incur unexpected liabilities, or the property may fail to perform in accordance with our projections. If, during the due diligence phase, we do not accurately assess the value of and liabilities associated with a particular property, we may pay a purchase price that exceeds the current fair value of the assets. As a result, material goodwill and other intangible assets would be recorded, which could result in significant charges to earnings in future periods. These charges, in addition to the financial impact of significant liabilities that we may assume, could materially and adversely impact our financial and operating results, as well as our ability to pay distributions.

Certain losses may not be covered by insurance or may be underinsured.

We carry insurance covering comprehensive liability, fire, earthquake, terrorism, business interruption, vandalism and malicious mischief, extended coverage perils, physical loss perils, commercial general liability, personal injury, workers’ compensation, business, automobile, errors and omissions, employee dishonesty, employment practices liability and rental loss with respect to all of the properties in our portfolio and the operation of our Management Company and Development Company. We also carry insurance covering flood (when the property is located in whole or in material part in a designated flood plain area) on some of our properties. We believe the policy specifications and insured limits are appropriate and adequate given the relative risk of loss, the cost of the coverage and industry practice. There are, however, certain types of losses (such as property damage from riots or wars, employment discrimination losses, punitive damage awards, or acts of God) that may be either uninsurable or not economically insurable. Some of our policies are subject to large deductibles or co-payments and policy limits that may not be sufficient to cover losses. In addition, we may discontinue earthquake, terrorism or other insurance on some or all of our properties in the future if the cost of premiums for these policies exceeds, in our judgment, the value of the coverage discounted for the risk of loss. If we experience a loss that is uninsured or that exceeds policy limits, we could lose the capital invested in the damaged properties as well as the anticipated future cash flows from those properties. In addition, if the damaged properties are subject to recourse indebtedness, we would continue to be liable for the indebtedness, even if these properties were irreparably damaged.

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

Under various environmental laws, including the Comprehensive Environmental Response, Compensation and Liability Act, or CERCLA, a current or previous owner or operator of real property may be liable for contamination resulting from the release or threatened release of hazardous or toxic substances or petroleum at that property, and an entity that arranges for the disposal or treatment of a hazardous or toxic substance or petroleum at another property may be held jointly and severally liable for the cost to investigate and clean up such property or other affected property. Such parties are known as potentially responsible parties, or PRPs. Environmental laws often impose liability without regard to whether the owner or operator knew of, or was responsible for, the presence of the contaminants, and the costs of any required investigation or cleanup of these substances can be substantial. PRPs are liable to the government as well as to other PRPs who may have claims for contribution. The liability is generally not limited under such laws and could exceed the property’s value and the aggregate assets of the liable party. The presence of contamination or the failure to remediate contamination at our properties also may expose us to third-party liability for personal injury or property damage, or adversely affect our ability to sell, lease or develop the real property or to borrow using the real property as collateral. We do not carry environmental insurance on any of the properties in our portfolio.

Environmental laws also impose ongoing compliance requirements on owners and operators of real property. Environmental laws potentially affecting us address a wide variety of matters, including, but not limited to, asbestos-containing building materials, storage tanks, storm water and wastewater discharges, lead-based paint, wetlands and hazardous wastes. Failure to comply with these laws could result in fines and penalties and/or expose us to third-party liability. Some of our properties may have conditions that are subject to these requirements, and we could be liable for such fines or penalties and/or liable to third parties for those conditions.

We could be exposed to liability and remedial costs related to environmental matters.

Certain properties in our portfolio may contain, or may have contained, asbestos-containing building materials, or ACBMs. Environmental laws require that ACBMs be properly managed and maintained, and may impose fines and penalties on building owners and operators for failure to comply with these requirements. Also, certain properties may contain, or may have contained, or are adjacent to or near other properties that have contained or currently contain storage tanks for the storage of petroleum products or other hazardous or toxic substances. These operations create a potential for the release of petroleum products or other hazardous or toxic substances. Certain properties in our portfolio contain, or may have contained, elevated radon levels. Third parties may be permitted by law to seek recovery from owners or operators for property damage and/or personal injury associated with exposure to contaminants, including, but not limited to, petroleum products, hazardous or toxic substances and asbestos fibers. Also, some of the properties may contain regulated wetlands that can delay or impede development or require costs to be incurred to mitigate the impact of any disturbance. Absent appropriate permits, we can be held responsible for restoring wetlands and be required to pay fines and penalties.

Some of the properties in our portfolio may contain microbial matter such as mold and mildew. In addition, if any property in our portfolio is not properly connected to a water or sewer system, or if the integrity of such systems are breached, or if water intrusion into our buildings otherwise occurs, microbial matter or other contamination can develop. When excessive moisture accumulates in buildings or on building materials, mold growth may occur, particularly if the moisture problem remains undiscovered or is not addressed over a period of time. Some molds may produce airborne toxins or irritants. If this were to occur, we could incur significant remedial costs and we may also be subject to material private damage claims and awards. Concern about indoor exposure to mold has been increasing, as exposure to mold may cause a variety of adverse health effects and symptoms, including allergic or other reactions. If we become subject to claims in this regard, it could materially and adversely affect us and our future insurability for such matters.

Independent environmental consultants conduct Phase I environmental site assessments on all of our acquisitions. Phase I environmental site assessments are intended to evaluate information regarding the environmental condition of the surveyed property and surrounding properties based generally on visual observations, interviews and certain publicly available databases. These assessments do not typically take into account all environmental issues including, but not limited to, testing of soil or groundwater or the possible presence of asbestos, lead-based paint, radon, wetlands or mold. The results of these assessments are addressed and could result in either a cancellation of the purchase, the requirement of the seller to remediate issues or additional costs on our part to remediate the issue.

None of the previous site assessments revealed any past or present environmental liability that we believe would be material to us. However, the assessments may have failed to reveal all environmental conditions, liabilities or compliance concerns.

Material environmental conditions, liabilities or compliance concerns may have arisen after the assessments were conducted or may arise in the future; and future laws, ordinances or regulations may impose material additional environmental liability. We cannot assure you that costs of future environmental compliance will not affect our ability to make distributions or that such costs or other remedial measures will not be material to us.

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

Under the Americans with Disabilities Act of 1990, or the ADA, all public accommodations must meet federal requirements related to access and use by disabled persons. Additional federal, state and local laws also may require modifications to our properties, or restrict our ability to renovate our properties. For example, the Fair Housing Amendments Act of 1988, or FHAA, requires apartment properties first occupied after March 13, 1990 to be accessible to the handicapped. We have not conducted an audit or investigation of all of our properties to determine our compliance with present ADA requirements. Noncompliance with the ADA or FHAA could result in the imposition of fines or an award for damages to private litigants and also could result in an order to correct any non-complying feature. We cannot predict the ultimate amount of the cost of compliance with the ADA, FHAA or other legislation. If we incur substantial costs to comply with the ADA, FHAA or any other legislation, we could be materially and adversely affected.

Reporting of on-campus crime statistics required of universities may negatively impact our communities.

Federal and state laws require universities to publish and distribute reports of on-campus crime statistics, which may result in negative publicity and media coverage associated with crimes occurring in the vicinity of, or on the premises of, our on-campus communities. Reports of crime or other negative publicity regarding the safety of the students residing on, or near, our communities may have an adverse effect on both our on-campus and off-campus communities.

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.

We have co-invested and anticipate that we will continue to co-invest with third parties through partnerships, joint ventures or other entities, acquiring noncontrolling interests in or sharing responsibility for managing the affairs of a property, partnership, joint venture or other entity. In such event, we do not have sole decision-making authority regarding the property, partnership, joint venture or other entity. Investments in partnerships, joint ventures or other entities may, under certain circumstances, involve risks not present were a third party not involved, including the possibility that partners or co-venturers may become bankrupt or fail to fund their share of required capital contributions. Partners or co-venturers also may have economic or other business interests or goals that are inconsistent with our business interests or goals and may be in a position to take actions contrary to our preferences, policies or objectives. Such investments also will have the potential risk of our reaching impasses with our partners or co-venturers on key decisions, such as a sale, because neither we nor the partner or co-venturer would have full control over the partnership or joint venture. Disputes between us and our partners or co-venturers may result in litigation

or arbitration that would increase our expenses and prevent our management team from focusing its time and effort exclusively on our business. In addition, we may in some circumstances be liable for the actions of our third-party partners or co-venturers.

Illiquidity of real estate investments could significantly impede our ability to respond to adverse changes in the performance of our properties.

Because real estate investments are relatively illiquid, our ability to promptly sell one or more properties in our portfolio in response to changing economic, financial and investment conditions is limited. The real estate market is affected by many factors, such as general economic conditions, availability of financing, interest rates and other factors, including supply and demand, that are beyond our control. We cannot predict whether we will be able to sell any property for the price or on the terms set by us or whether any price or other terms offered by a prospective purchaser would be acceptable to us. We also cannot predict the length of time needed to find a willing purchaser and to close the sale of a property.

We may be required to expend funds to correct defects or to make improvements before a property can be sold. We cannot ensure that we will have funds available to correct those defects or to make those improvements. In acquiring a property, we may agree to transfer restrictions that materially restrict us from selling that property for a period of time or impose other restrictions, such as a limitation on the amount of debt that can be placed or repaid on that property. These transfer restrictions would impede our ability to sell a property even if we deem it necessary or appropriate.

Risks Associated with Our Indebtedness and Financing

We depend heavily on the availability of debt and equity capital to fund our business.

In order to maintain our qualification as a REIT, we are required under the Internal Revenue Code of 1986, as amended, or the Code, to distribute annually at least 90% of our REIT taxable income, determined without regard to the deduction for dividends paid and excluding any net capital gain. To the extent that we satisfy this distribution requirement but distribute less than 100% of our net taxable income, including any net capital gains, we will be subject to federal corporate income tax on our undistributed taxable income. In addition, we will be subject to a 4% nondeductible excise tax if the actual amount that we pay out to our stockholders in a calendar year is less than a minimum amount specified under federal tax laws. Because of these distribution requirements, REITs are largely unable to fund capital expenditures, such as acquisitions, renovations, development and property upgrades from operating cash flow. Consequently, we will be largely dependent on the public equity and debt capital markets and private lenders to provide capital to fund our growth and other capital expenditures. We may not be able to obtain this financing on favorable terms or at all. Our access to equity and debt capital depends, in part, on:


•	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 distributions; and


•	the market price per share of our common stock.

If we cannot obtain capital from third-party sources, we may not be able to acquire properties when strategic opportunities exist, satisfy our debt service obligations or make cash distributions to our stockholders, including those necessary to maintain our qualification as a REIT.

Current market conditions could affect our ability to refinance existing indebtedness or obtain additional financing on acceptable terms and may have other adverse effects on us.

The United States credit markets have in the recent past experienced significant dislocations and liquidity disruptions, including the bankruptcy, insolvency or restructuring of certain financial institutions. In addition, recent U.S. budget deficit concerns, together with signs of deteriorating sovereign debt conditions in Europe, have increased the possibility of additional credit-rating downgrades and economic slowdowns. These circumstances have impacted liquidity in the debt markets, making financing terms for certain borrowers less attractive, and in certain cases have resulted in the unavailability of certain types of debt financing. Although we believe that our Master Secured Credit Facility, Fourth Amended Revolver and Unsecured Term Loan (each defined below) are sufficient for our current operations, any reductions in our available borrowing capacity, or our inability to renew or replace these facilities when required or when business conditions warrant, could have a material adverse effect on our business, financial condition and results of operations. Furthermore, if prevailing interest rates or other factors at the time of refinancing result in higher interest rates upon refinancing, then the interest expense relating to that refinanced indebtedness would increase. Higher interest rates on newly incurred debt may negatively impact us as well. If interest rates increase, our interest costs and overall costs of capital will increase, which could adversely affect our transaction and

development activity, financial condition, results of operations, cash flow, the market price of our stock, our ability to pay principal and interest on our debt and our ability to pay dividends to our stockholders.

If we are unable to secure additional financing or refinancing on favorable terms or our operating cash flow is insufficient, we may not be able to satisfy our outstanding financial obligations under our mortgage and construction debt. Furthermore, if financing is not available when needed, or is available on unfavorable terms, we may be unable to take advantage of business opportunities or respond to competitive pressures, any of which could have a material adverse effect on our business, financial condition and results of operations. A prolonged downturn in the credit markets may cause us to seek alternative sources of potentially less attractive financing. Such sources may not then be available and may require us to adjust our business plan accordingly or significantly cutback or curtail operations and development plans. In addition, these factors may make it more difficult for us to sell properties or may adversely affect the price we receive for properties that we do sell as prospective buyers may experience increased costs of debt financing or difficulties in obtaining debt financing.

In addition, we mortgage some of our properties to secure payment of indebtedness. In 2014, $9.5 million, or 2.2%, of our mortgage and construction debt reaches maturity. If we are unable to service the debt, including in the event we are not successful in refinancing our debt upon maturity, then the properties securing the mortgages could be foreclosed upon or transferred to the mortgagee, or we might be forced to dispose of some of our properties on disadvantageous terms, with a consequent loss of income and asset value. A foreclosure of a mortgaged property could also cause cross defaults under the Master Secured Credit Facility. A foreclosure or disadvantageous disposal on one or more of our properties could adversely affect our financial condition, results of operations, cash flow and ability to pay dividends on, and the market price of, our stock.

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

Our charter and bylaws impose no limitation on the amount of debt we may incur. Our debt service obligations expose us to the risk of default and reduce (or eliminate) cash resources that are available to operate our business. The Fourth Amended Revolver and the Unsecured Term Loan each contains customary affirmative and negative covenants and provides for potential availability of $700 million and $250 million, respectively, upon satisfaction of certain conditions. The amount available to us and our ability to borrow from time to time under this facility is subject to certain conditions which includes borrowing base calculations that limit availability based upon the underlying value of the property asset value (as defined in the agreement) and the satisfaction of specified financial and other covenants, which include, without limitation, limiting distributions to our stockholders. If the income generated by our properties and other assets fails to cover our debt service, we would be forced to reduce or eliminate distributions to our stockholders and may experience losses. Our level of debt and the operating limitations imposed on us by our debt agreements could have significant adverse consequences, including the following:


•	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, and the lenders or mortgagees may foreclose on our properties that secure their loans and receive an assignment of rents and leases;


•	a default under the Master Secured Credit Facility or the Fourth Amended Revolver or the Unsecured Term Loan may preclude further availability of credit from other sources; and


•	foreclosures could create taxable income without accompanying cash proceeds, a circumstance that could hinder our ability to meet the REIT distribution requirements.

A change in U.S. government policy with regard to Fannie Mae could materially impact our financial condition.

Fannie Mae remains in conservatorship of the U.S. government. Under the terms of Fannie Mae’s agreement with the U. S. Treasury, the amount of funding available for Fannie Mae from the U.S. Treasury was $117.6 billion as of February 21, 2014. Further, Fannie Mae’s agreement with the U.S. Treasury limits the maximum allowable amount of mortgage assets Fannie Mae can hold in its retained mortgage portfolio; such limit was $552.5 billion as of December 31, 2013. Fannie Mae is required to reduce its mortgage assets to 85% of the maximum allowable amount that it was permitted to own as of December 31of the immediately preceding calendar year, until the amount of its mortgage assets reaches $250 billion in 2018. Through expansion of its off-balance sheet lending products, we believe that Fannie Mae’s balance sheet limitations will not restrict its support of lending to the collegiate housing industry and to us in particular. Should loan availability be reduced, it could impact the value of collegiate housing assets and impair the value of our properties, and we would seek alternative sources of funding. We anticipate that additional capital may be available only at a higher cost and have less attractive terms, if available at all.

A change in the value of our assets could cause us to experience a cash shortfall, be in default of our loan covenants, lose management control or incur a charge for the impairment of assets.

We borrow on a secured basis under the Master Secured Credit Facility. A significant reduction in value of the assets secured as collateral could require us to post additional collateral or pay down the balance of the facility. While we believe that we have significant excess collateral and capacity, future asset values are uncertain. If we were unable to meet a request to add collateral to the facility, this inability would have a material adverse affect on our liquidity and our ability to comply with our loan covenants. We may determine that the value of an individual asset, or group of assets, was irrevocably impaired, and that we need to record a charge to write-down the value of the asset to reflect its current estimated value based on its intended use.

Our collegiate housing communities have previously been, and in the future may be, subject to impairment charges, which could adversely affect our results of operations.

We are required to periodically evaluate our properties for impairment indicators. A property’s value is considered impaired if management’s estimate of the aggregate future cash flows (undiscounted and without interest charges) to be generated by the property, based on its intended use, is less than the carrying value of the property. These estimates of cash flows are based on factors such as expected future operating income, trends and prospects, as well as the effects of interest and capitalization rates, demand and occupancy, competition and other factors. Ongoing adverse market and economic conditions and market volatility make it difficult to value our collegiate housing communities. These factors may result in uncertainty in valuation estimates and instability in the estimated value of our collegiate housing communities which, in turn, could result in a substantial decrease in the value of the communities and significant impairment charges.

We continually assess our collegiate housing communities to determine if any dispositions are necessary or appropriate. No assurance can be given that we will be able to recover the current carrying amount of our collegiate housing communities in the future. Our failure to do so would require us to recognize additional impairment charges for the period in which we reached that conclusion, which could materially and adversely affect us and our results of operations.

Variable rate debt is subject to interest rate risk.

We have mortgage and construction debt with varying interest rates dependent upon London InterBank Offered Rate (“LIBOR”) plus an applicable margin. In addition, our Fourth Amended Revolver bears interest at a variable rate on all amounts drawn under the facility. As of December 31, 2013, we had a total of $550.3 million outstanding in variable rate debt, or approximately 71%, of our total debt. We may incur additional variable rate debt in the future. Increases in interest rates on variable rate debt would increase our interest expense, unless we make arrangements that hedge the risk of rising interest rates, which would adversely affect net income and cash available for payment of our debt obligations and distributions to stockholders.

We may incur losses on interest rate hedging arrangements.

Periodically, we have entered into agreements to reduce the risks associated with changes in interest rates, and we may continue to do so in the future. Although these agreements may partially protect against rising interest rates, they may also reduce the benefits to us if interest rates decline. If a hedging arrangement is not indexed to the same rate as the indebtedness which is hedged, we may be exposed to losses to the extent which the rate governing the indebtedness and the rate governing the hedging arrangement change independently of each other. Additionally, nonperformance by the other party to the hedging arrangement may subject us to increased credit risks.

Broad market fluctuations could negatively impact the market price of our common stock.

As with other publicly traded equity securities, the value of our common stock depends on various market conditions, which may change from time to time. The stock market has recently experienced extreme price and volume fluctuations that have affected the market price of many companies in industries similar or related to ours and that are outside of management’s control. These broad market fluctuations could adversely impact the market price of our common stock. Accordingly, the market price of our common stock could change in ways that may or may not be related to our business, our industry or our operating performance and financial condition. Furthermore, our operating results and prospects may not meet the expectations of public market analysts and investors or may not be comparable to companies within our industry and with comparable market capitalizations. Any of these factors could lead to a material decline in the market price of our common stock.

Additional issuances of equity securities may be dilutive to stockholders.

The interests of our stockholders could be diluted if we issue additional equity securities to finance future developments or acquisitions or to repay indebtedness. Our Board of Directors may authorize the issuance of additional equity securities without stockholder approval. Our ability to execute our business strategy depends upon our access to an appropriate blend of debt financing, including revolving credit facilities and other forms of secured and unsecured debt, and equity financing, including the issuance of common equity.

We may reduce the amount of dividends declared on our common stock.

In order for EdR to continue to qualify as a REIT, we are required to distribute annual dividends generally equal to a minimum of 90% of our REIT taxable income, computed without regard to the dividends paid deduction and our net capital gains. However, in the event of material deterioration in business conditions or tightening in the credit markets, among other factors, our Board of Directors may decide to reduce the amount of our dividend while ensuring compliance with the requirements of the Code related to REIT qualification.

Risks Related to Our Organization and Structure

To maintain our REIT status, we may be forced to limit the activities of our Management Company and Development Company.

To maintain our status as a REIT, no more than 25% of the value of our total assets may consist of the securities of one or more taxable REIT subsidiaries, such as our Management Company and our Development Company. Some of our activities, such as our third-party management, development consulting and food services, must be conducted through our Management Company and Development Company for us to maintain our REIT qualification. In addition, certain non-customary services such as cleaning, transportation, security and, in some cases, parking, must be provided by one of our taxable REIT subsidiaries or an independent contractor. If the revenues from such activities create a risk that the value of our Management Company and other TRSs, based on revenues or otherwise, approaches the 25% threshold, we will be forced to curtail such activities or take other steps to remain under the 25% threshold. Because the 25% threshold is based on value, it is possible that the Internal Revenue Service, or IRS, could successfully contend that the value of our Management Company and other TRSs exceed the 25% threshold even if our Management Company and other TRSs accounts for less than 25% of our consolidated revenues, income or cash flow, in which case our status as a REIT could be jeopardized.

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

Our charter provides that, subject to certain exceptions, no person or entity may beneficially own, or be deemed to own by virtue of the applicable constructive ownership provisions of the Code, more than 9.8% (by value, by number of shares or by voting power, whichever is more restrictive) of the outstanding shares of our common stock or more than 9.8% (by value, by number of shares or by voting power, whichever is more restrictive) of the outstanding shares of our capital stock, including both common and preferred stock. We refer to these restrictions collectively as the “ownership limit.” Generally, if a beneficial owner of our shares exceeds the ownership limit, such owner will be effectively divested of all ownership rights with respect to shares exceeding the limit and may suffer a loss on such investment.

The constructive ownership rules under the Code are complex and may cause stock owned actually or constructively by a group of related individuals and/or entities to be owned constructively by one individual or entity. As a result, the acquisition of less than 9.8% of our stock (or the acquisition of an interest in an entity that owns, actually or constructively, our stock) by an individual or entity, could, nevertheless cause that individual or entity, or another individual or entity, to own constructively in excess of 9.8% of our outstanding common stock and thereby subject certain shares to the ramifications of exceeding the ownership limit. Our charter, however, permits exceptions to be made to this limitation if our Board of Directors determines that such exceptions will not jeopardize our tax status as a REIT. This ownership limit could delay, defer or prevent a change of control or other transaction that might otherwise result in a premium price for our common stock or otherwise be in the best interest of our stockholders.

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

Certain provisions contained in our charter and bylaws and the Maryland General Corporation Law may discourage a third party from making a tender offer or acquisition proposal to us, or could delay, defer or prevent a change in control or the removal of existing management. These provisions also may delay or prevent our stockholders from receiving a premium for their shares of common stock over then-prevailing market prices. These provisions include:


•	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; and


•	advance notice requirements for stockholder nomination of directors and for other proposals to be presented at stockholder meetings.

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

Various Maryland laws may have the effect of discouraging offers to acquire us, even if the acquisition would be advantageous to our stockholders. Our bylaws exempt us from some of those laws, such as the control share acquisition provisions, but our Board of Directors can change our bylaws at any time to make these provisions applicable to us.

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

Our major policies, including our policies with respect to investments, leverage, financing, growth, debt and capitalization, are determined by our Board of Directors or those committees or officers to whom our Board of Directors has delegated that authority. Our Board of Directors also establishes the amount of any distributions that we make to our stockholders. Our Board of Directors may amend or revise the foregoing policies, our distribution payment amounts and other policies from time to time without a stockholder vote. Accordingly, our stockholders may not have control over changes in our policies.

The ability of our Board of Directors to revoke our REIT election without stockholder approval may cause adverse consequences to our stockholders.

Our charter provides that our Board of Directors may revoke or otherwise terminate our REIT election, without the approval of our stockholders, if it determines that it is no longer in our best interests to continue to qualify as a REIT. If we cease to qualify as a REIT, we would become subject to federal income tax on our taxable income and would no longer be required to distribute most of our taxable income to our stockholders, which may have adverse consequences on the total return to our stockholders.

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

Maryland law provides that a director or officer has no liability in that capacity if he or she performs his or her duties in good faith, in a manner he or she reasonably believes to be advisable and in our best interests and with the care that an ordinarily prudent person in a like position would use under similar circumstances. In addition, our charter eliminates our directors’ and officers’ liability to us and our stockholders for money damages except for liability resulting from actual receipt of an improper benefit in money, property or services or active and deliberate dishonesty established by a final judgment and that is material to the cause of action. Our bylaws require us to indemnify directors and officers for liability resulting from actions taken by them in those capacities to the maximum extent permitted by Maryland law. As a result, our stockholders and we may have more limited rights against our directors and officers than might otherwise exist under common law. In addition, we may be obligated to fund the defense costs incurred by our directors and officers.

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

We depend upon the services of our key personnel, particularly Randy Churchey, President and Chief Executive Officer, Randall H. Brown, our Executive Vice President and Chief Financial Officer, Thomas Trubiana, our Executive Vice President and Chief Investment Officer, and Christine Richards, our Senior Vice President and Chief Operating Officer. Mr. Churchey’s considerable experience as a senior executive officer of publicly traded real estate companies, including REITs, prior service to EdR as a member of the Board of Directors and familiarity with our operational and organizational structure are critical to the oversight and implementation of our strategic initiatives and the evaluation of our operational performance. In addition, Mr. Brown possesses detailed knowledge of and experience with our financial and ancillary support operations that are critical to our operations and financial reporting obligations as a public company. Mr. Trubiana has been in the collegiate housing business for over 30 years, and has developed a network of contacts and a reputation that attracts business and investment opportunities and assists us in negotiations with universities, lenders and industry personnel. Ms. Richards possesses detailed knowledge of our property operations that is critical to the oversight of our communities’ performance and has considerable experience in the collegiate housing industry. We will continue to need to attract and retain qualified additional senior executive officers as we grow our business. The loss of the services of any of our senior executive officers, or our inability to recruit and retain qualified personnel could have a material adverse effect on our business and financial results.

Any weaknesses identified in our system of internal controls by us and our independent registered public accounting firm pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 could have an adverse effect on our business.

Section 404 of the Sarbanes-Oxley Act of 2002 requires that public companies evaluate and report on their systems of internal control over financial reporting. In addition, our independent registered public accounting firm must report on management’s evaluation of those controls. In future periods, we may identify deficiencies in our system of internal controls over financial reporting that may require remediation. There can be no assurances that any such future deficiencies identified may not be material weaknesses that would be required to be reported in future periods.

Federal Income Tax Risks

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

We intend to continue to be organized and to operate in a manner that will allow us to qualify as a REIT under the Code. We have not requested and do not plan to request a ruling from the IRS that we qualify as a REIT. If we lose our REIT status, we will face serious tax consequences that could substantially reduce the funds available for distribution to our stockholders for each year that we fail to qualify as a REIT because:


•	we would not be allowed a deduction for distributions to stockholders in computing our taxable income and, therefore, 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


•	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.

In addition, if we fail to qualify as a REIT, we will not be required to make distributions to stockholders. As a result of all these factors, our failure to qualify as a REIT could impair our ability to expand our business and raise capital and would adversely affect the value of our common stock.

Qualification as a REIT involves the application of highly technical and complex Code provisions for which there are only limited judicial and administrative interpretations. The complexity of these provisions and of the applicable Treasury Regulations that have been promulgated under the Code is greater in the case of a REIT that, like us, holds its assets through partnerships and limited liability companies. The determination of various factual matters and circumstances not entirely within our control may affect our ability to qualify as a REIT. In order to qualify as a REIT, we must satisfy a number of requirements, including requirements regarding the diversification of our assets and the sources of our gross income composition of our assets and two “gross income tests.” To satisfy the sources of gross income requirements, we must derive (a) at least 75% of our gross income in any year from qualified sources, such as “rents from real property,” mortgage interest, distributions from other REITs and gains from sale of such assets, and (b) at least 95% of our gross income from sources meeting the 75% gross income test above, and other passive investment sources, such as other interest and dividends and gains from sales of securities. Also, we must make distributions to stockholders aggregating annually at least 90% of our REIT taxable income, determined without regard to the deduction for dividends paid and excluding any net capital gains. In order to meet these requirements, we may be required to forgo investments we might otherwise make. Thus, compliance with the REIT requirements may hinder our performance. In addition, new legislation, regulations, administrative interpretations or court decisions may adversely affect our

investors, our ability to qualify as a REIT for federal income tax purposes or the desirability of an investment in a REIT relative to other investments.

We may be subject to federal and state income taxes that would harm our financial condition.

Even if we maintain our status as a REIT, we may become subject to federal and state income taxes. For example, if we recognize a gain from a sale of dealer property or inventory or if our Management Company enters into agreements with us or our tenants on a basis that is determined to be other than an arm’s length, that gain or income will be subject to a 100% penalty tax. If we believe that a sale of a property might be treated as a prohibited transaction, we will attempt to structure a sale through a taxable REIT subsidiary, in which case the gain from the sale would be subject to corporate income tax but not the 100% prohibited transaction tax. We cannot assure you, however, that the IRS would not assert successfully that sales of properties that we make directly, rather than through a taxable REIT subsidiary, were sales of dealer property or inventory, in which case the 100% penalty tax will apply. In addition, we may not be able to make sufficient distributions to avoid corporate income tax and/or the 4% excise tax on undistributed income. We may also be subject to state and local taxes on our income or property, either directly or at the level of our Operating Partnership or the University Towers Partnership or at a level of the other entities through which we indirectly own our properties that would aversely affect our operating results.

An investment in our common stock has various tax risks, including the treatment of distributions in excess of earnings and the inability to apply “passive losses” against distributions.

Distributions in excess of current and accumulated earnings and profits, to the extent that they exceed the adjusted basis of an investor’s common stock, will be treated as long-term capital gain (or short-term capital gain if the shares have been held for less than one year). Any gain or loss realized upon a taxable disposition of shares by a stockholder who is not a dealer in securities will be treated as a long-term capital gain or loss if the shares have been held for more than one year and otherwise will be treated as short-term capital gain or loss. Distributions that we properly designate as capital gain distributions (to the extent that they do not exceed our actual net capital gain for the taxable year) will be treated as taxable to stockholders as gains from the sale or disposition of a capital asset held for greater than one year. Distributions we make and gain arising from the sale or exchange by a stockholder of shares of our stock will not be treated as passive income, meaning stockholders generally will not be able to apply any “passive losses” against such income or gain.

Future distributions may include a significant portion as a return of capital.

Our distributions have historically exceeded, and may continue to exceed, the amount of our net income as a REIT. Any distributions in excess of a stockholder’s share of our current and accumulated earnings and profits will be treated as a return of capital to the extent of the stockholder’s basis in our stock, and the stockholder’s basis in our stock will be reduced by such amount. To the extent distributions exceed both the stockholder’s share of our current and accumulated earnings and profits and the stockholder’s basis in our stock, the stockholder will recognize capital gain, assuming the stock is held as a capital asset. If distributions by us result in a reduction of a stockholder’s adjusted basis in its stock, subsequent sales by such stockholder of its stock potentially will result in recognition of an increased capital gain or reduced capital loss due to the reduction in such stockholder’s adjusted basis in its stock.

The tax imposed on REITs engaging in “prohibited transactions” may limit our ability to engage in transactions which would be treated as sales for federal income tax purposes.

A REIT’s net income from prohibited transactions is subject to a 100% penalty tax. In general, prohibited transactions are sales or other dispositions of property, other than foreclosure property held in inventory primarily for sale to customers in the ordinary course of business. Although we do not intend to hold any properties that would be characterized as inventory held for sale to customers in the ordinary course of our business, subject to certain statutory safe harbors, such characterization is a factual determination and no guarantee can be given that the IRS would agree with our characterization of our properties or that we will always be able to make use of the available safe harbors.

If our Operating Partnership fails to maintain its status as a partnership for federal income tax purposes, its income may be subject to corporate-level income taxation.

We intend for our Operating Partnership to maintain its status as a partnership for federal income tax purposes; however, if the IRS were to successfully challenge the status of our Operating Partnership as a partnership, our Operating Partnership would be taxable as a corporation. In such event, this would reduce the amount of distributions that our Operating Partnership could make to us. This could also result in our losing REIT status and becoming subject to a corporate-level income tax. This would substantially reduce our cash available to pay distributions to our stockholders. In addition, if any of the entities through which

our Operating Partnership owns its properties, in whole or in part, loses its characterization as a partnership for federal income tax purposes, it would be subject to taxation as a corporation, thereby reducing distributions to our Operating Partnership. Such a re-characterization of an underlying property owner could also threaten our ability to maintain REIT status.

Item 1B. Unresolved Staff Comments.

None.

Item 2. Properties.

General

As of December 31, 2013, our owned portfolio consisted of 49 communities located in 23 states containing 27,982 beds in 9,933 apartment units located near 41 universities.

The majority of our owned portfolio are modern apartments that consist of collegiate housing units with fully-furnished private bedrooms and one or more bathrooms centered around a common area consisting of a fully-furnished living room, fully-equipped eat-in kitchen and washers/dryers. University Towers is a high-rise residence hall that has a cafeteria on the premises and no individual kitchens in the units. We provide food services through our Management Company to residents of University Towers. Our collegiate housing communities typically contain a swimming pool, recreational facilities and common areas, and each bedroom has individual locks, high-speed Internet access and cable television connections.

Our owned collegiate housing communities typically have the following characteristics:


•	median distance to campus of 0.1 miles;


•	median age of approximately 6 years;


•	designed specifically for student life style with modern unit plans and amenities; and


•	supported by our long-standing Community Assistant program and other student-oriented activities and services that enhance the college experience.

Communities

The following table provides certain summary information about our owned communities as of December 31, 2013, which are included in the collegiate housing leasing segment discussed in Note 11, “Segments” to our accompanying consolidated financial statements. All communities are owned fee simple with the exception of University Village on Colvin, GrandMarc at the Corner, GrandMarc at Westberry Place. Campus Village, Campus West, 2400 Nueces and Central Hall I & II, which are operated pursuant to ground leases.



						Year Ended December 31, 2013
Name	Primary University Served	Year Built	Acquisition/ Development Date	# of Beds	# of Units	Average Occupancy Rate⁽¹⁾		Monthly Total Revenue		Monthly Revenue per Available Bed⁽²⁾
								(in thousands)
Owned and Operated
College Station at W. Lafayette⁽⁶⁾	Purdue University West Lafayette, Indiana	2000	Jan ’05	960	336	83.7	%	$	351	$	366
Commons at Knoxville	University of Tennessee Knoxville, Tennessee	1999	Jan ’05	708	211	94.4	%	352		497
Commons on Kinnear	The Ohio State University Columbus, Ohio	2000	Jan ’05	502	166	99.3	%	287		572
Players Club	Florida State University Tallahassee, Florida	1994	Jan ’05	336	84	98.5	%	168		499
The Commons	Florida State University Tallahassee, Florida	1997	Jan ’05	732	252	85.4	%	265		363
The Lofts	University of Central Florida Orlando, Florida	2002	Jan ’05	730	254	93.0	%	445		610
The Pointe	Pennsylvania State University State College, Pennsylvania	1999	Jan ’05	984	294	98.8	%	545		554
The Pointe at South Florida	University of South Florida Tampa, Florida	1999	Jan ’05	1,002	336	92.4	%	433		432
The Reserve at Athens	University of Georgia Athens, Georgia	1999	Jan ’05	612	200	96.9	%	234		382
The Reserve at Columbia	University of Missouri Columbia, Missouri	2000	Jan ’05	676	260	96.5	%	326		482
The Reserve on Perkins	Oklahoma State University Stillwater, Oklahoma	1999	Jan ’05	732	234	96.0	%	295		403
The Reserve on West 31st⁽⁶⁾	University of Kansas Lawrence, Kansas	1998	Jan ’05	720	192	82.9	%	229		317
University Towers	North Carolina State University Raleigh, North Carolina	1989	Jan ’05	889	251	67.2	%	485		526		⁽³⁾
Campus Creek	University of Mississippi Oxford, Mississippi	2004	Feb ’05	636	192	97.1	%	295		464
Pointe West	University of South Carolina Cayce, South Carolina	2003	Mar ’05	480	144	96.4	%	229		478
Campus Lodge	University of Florida Gainesville, Florida	2001	Jun ’05	1,115	360	95.3	%	507		454
The Reserve on South College	Auburn University Auburn, Alabama	1999	Jul ’05	576	180	90.3	%	193		335
Cape Trails	Southeast Missouri State University Cape Girardeau, Missouri	2000	Jan ’06	360	96	100.0	%	169		431
Carrollton Crossing	State University of West Georgia Carrollton, Georgia	1998	Jan ’06	336	84	99.4	%	152		413
River Pointe	State University of West Georgia Carrollton, Georgia	2000	Jan ’06	504	132	92.3	%	215		392
The Avenue at Southern	Georgia Southern University Statesboro, Georgia	1993	Jun ’06	624	214	80.5	%	195		313



							Year Ended December 31, 2013
Name	Primary University Served	Year Built		Acquisition/ Development Date	# of Beds	# of Units	Average Occupancy Rate⁽¹⁾		Monthly Total Revenue	Monthly Revenue per Available Bed⁽²⁾
									(in thousands)
The Reserve at Saluki Pointe	Southern Illinois University Carbondale, Illinois	2008		Aug ’08	768	228	89.4	%	806	437
University Village on Colvin	Syracuse University Syracuse, New York	2009		Aug ’09	432	120	82.2	%	880	849
GrandMarc at the Corner	University of Virginia Charlottesville, Virginia	2006		Oct ’10	641	224	90.6	%	508	727
Jefferson Commons	University of Virginia Charlottesville, Virginia	2007		Mar ’11	82	22	100.0	%	54	609
Wertland Square	University of Virginia Charlottesville, Virginia	2006		Mar ’11	152	50	97.0	%	123	745
The Berk	University of California at Berkeley Berkeley, California	1920		May ’11	165	55	54.1	%	122	675
University Village Towers	University of California at Riverside Riverside, California	2005		Sept ’11	554	149	68.4	%	284	470
Irish Row	University of Notre Dame South Bend, Indiana	2011		Nov ’11	326	127	95.3	%	269	755
The Lotus	University of Colorado Boulder, Colorado	2008		Nov ’11	40	9	97.4	%	29	689
GrandMarc at Westberry Place	Texas Christian University Ft. Worth, Texas	2006		Dec ’11	562	244	92.9	%	663	1,082
The Reserve on Stinson	University of Oklahoma Norman, Oklahoma	2004		Jan ’12	612	204	92.5	%	337	505
Campus West	Syracuse University Syracuse, New York	2012		Aug '12	313	191	84.5	%	327	980
East Edge	University of Alabama Tuscaloosa, Alabama	2012		Aug '12	774	337	93.9	%	547	648
The Oaks on the Square - Phase I & II	University of Connecticut Mansfield, Connecticut	2012	⁽⁴⁾	Aug ’12/Aug '13	503	322	99.7	%	414	1,062
The Province	East Carolina University Greenville, North Carolina	2011		Sept ’12	728	235	95.3	%	405	556
Campus Village	Michigan State University East Lansing, Michigan	2004		Oct ’12	355	106	95.9	%	228	656
The District on 5th	University of Arizona Tuscon, Arizona	2012		Oct ’12	764	208	94.5	%	486	636
The Province at Kent State	Kent State University Kent, Ohio	2012		Nov ’12	596	246	97.4	%	379	636
The Centre at Overton Park	Texas Tech University Lubbock, Texas	2005		Dec ’12	400	278	73.4	%	290	671
The Suites at Overton Park	Texas Tech University Lubbock, Texas	2009		Dec ’12	465	298	80.0	%	325	660
The Cottages on Lindberg	Purdue University West Lafayette, Indiana	2012		Jul '13	745	193	99.6	%	126	405
2400 Nueces	University of Texas at Austin Austin, Texas	2013		Aug '13	655	304	99.3	%	301	1,089
3949	Saint Louis University Saint Louis, Missouri	2013		Aug '13	256	197	59.3	%	241	1,482
Central Hall I & II	University of Kentucky Lexington, Kentucky	2013		Aug '13	601	309	99.9	%	189	693
Roosevelt Point	Arizona State University -Downtown Phoenix Phoenix, Arizona	2013		Aug '13	609	326	59.4	%	128	463
The Retreat at Oxford	University of Mississippi Oxford, Mississippi	2013		Aug '13	668	160	99.8	%	181	596
The Retreat at State College	Pennsylvania State University State College, Pennsylvania	2013		Sept '13	587	138	99.7	%	131	670

Year Ended

December 31, 2013

Name

Primary University Served

Year

Built

Acquisition/

Development Date

# of

Beds

# of

Units

Average

Occupancy

Rate⁽¹⁾

Monthly

Total

Revenue

Monthly Revenue per

Available

Bed⁽²⁾

(in thousands)

The Varsity

University of Michigan Ann Arbor, Michigan

2013

Dec '13

415

181

69.6

336

Total owned properties

2007

⁽⁵⁾

27,982

9,933


(1)	Average of the physical month-end occupancy rates.

(2)

Monthly revenue per available bed for 2013 is equal to total revenue, including tenant concessions, for the year ended December 31, 2013 divided by the sum of the total beds (including staff and model beds) at the property each month. For properties acquired during the year, monthly revenue per available bed equals total revenue for the period subsequent to acquisition through December 31, 2013 divided by the sum of the total beds (including staff and model beds) at the property each month while owned.


(3)	Revenues and revenue per available bed for University Towers excludes revenue from food service operations.


(4)	The first phase of The Oaks on the Square, which included 253 beds, was completed in August 2012. The second phase, which included 250 beds, was completed in August 2013.


(5)	Represents median year for all properties in our wholly-owned portfolio.


(6)	These communities are under contract with non-refundable deposits to be sold. Closing is expected by March 31, 2014. See Note 18 to the accompanying consolidated financial statements.

Mortgage and Construction Indebtedness

The following table contains summary information concerning the mortgage and construction debt encumbering our owned communities as of December 31, 2013:



Property	Outstanding as of December 31, 2013				Interest Rate		Maturity Date	Amortization
	(in thousands)

Irish Row/The Reserve at Perkins/The Reserve at Columbia/ The Commons at Knoxville⁽²⁾	$	56,450			6.02	%	1/1/2019	30 Year
The Reserve at Athens⁽²⁾	7,239				4.96	%	1/1/2015	30 Year
The Suites at Overton Park	24,695				4.16	%	4/1/2016	30 Year
The Centre at Overton Park	23,024				5.60	%	1/1/2017	30 Year
College Station at W. Lafayette/The Pointe at Penn State/The Reserve on Stinson⁽²⁾	67,543				6.02	%	1/1/2016	30 Year
Pointe West	9,594				4.92	%	8/1/2014	30 Year
The Commons on Kinnear/The Reserve at Perkins	16,413				5.45	%	1/1/2017	30 Year
River Pointe/Cape Trails/The Reserve on South College⁽²⁾	22,053				5.67	%	1/1/2020	30 Year
The Varsity	32,420			⁽³⁾	2.42	%	8/1/2015	(1)
The Oaks on the Square - Phase I and II	31,351			⁽³⁾	2.42	%	10/30/2015	(1)
The Oaks on the Square - Phase III	235			⁽³⁾	2.11	%	9/11/2017	(1)
Roosevelt Point	32,576			⁽³⁾	2.44	%	3/20/2015	(1)
The Retreat at Oxford	27,100			⁽³⁾	1.97	%	6/12/2015	(1)
University Towers	34,000			⁽³⁾	2.29	%	7/1/2016	30 Year
GrandMarc at Westberry Place	35,697			⁽³⁾	5.02	%	1/1/2020	30 Year
Total debt / weighted average rate	420,390				4.33	%
Unamortized premium	2,291
Total net of unamortized premium	422,681
Less current portion	(13,834		)
Total long-term debt, net of current portion	$	408,847

(1) Represents construction debt that is interest only through the maturity date. See Note 10 to the accompanying consolidated financial statements for additional information regarding the extension periods related to construction debt.

(2) Represents loans under the Master Secured Credit Facility as defined in Note 10 to the accompanying consolidated financial statements.

(3) Represents variable rate debt.

The weighted average interest rate of the mortgage and construction indebtedness was 4.33% as of December 31, 2013. Each of these mortgages is a non-recourse obligation subject to customary exceptions. These loans generally do not allow prepayment prior to maturity. However, prepayment is allowed in certain cases subject to prepayment penalties. The Oaks on the Square - Phase I and II and Roosevelt Point construction loans had a 100% repayment guarantee during construction; once construction was completed and certain requirements were met, the repayment guarantee was reduced to 50%. The construction loan on The Retreat at Oxford has a 25% repayment guarantee, which will be reduced to 10% if certain requirements are met. The construction loan assumed during the acquisition of The Varsity (see Note 4 to the accompanying consolidated financial statements) has a partial repayment guarantee of 50%, which will be reduced to 25% if certain requirements are met. The Trust has guaranteed completion of construction on The Oaks on the Square - Phase III. In addition, the construction loan has a partial repayment guarantee of 50% during construction, which will be reduced to 25% once construction is complete and certain requirements have been met. The construction loans can be prepaid without penalty.

Item 3. Legal Proceedings.

In the normal course of business, we are subject to claims, lawsuits and legal proceedings. While it is not possible to ascertain the ultimate outcome of such matters, in management’s opinion, the liabilities, if any, in excess of amounts provided or covered by insurance, are not expected to have a material adverse effect on our financial position, results of operations or liquidity.

Item 4. Mine Safety Disclosures.

Not Applicable.

PART II

Item 5. Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Market Information

Our common stock trades on the New York Stock Exchange, or the NYSE, under the symbol “EDR.” There were approximately 443 holders of record of the 115,013,964 shares outstanding on February 24, 2014. On the same day, our common stock closed at $9.65. The following table provides information on the high and low sales prices for our common stock on the NYSE and the dividends declared for 2012 and 2013:



	High	Low	Distributions Declared
Fiscal 2012
Quarter 1	$10.90	$9.75	$0.070
Quarter 2	11.55	10.42	0.100
Quarter 3	11.81	10.78	0.100
Quarter 4	10.92	9.72	0.100
Fiscal 2013
Quarter 1	$11.27	$10.32	$0.100
Quarter 2	11.77	9.37	0.110
Quarter 3	10.70	8.30	0.110
Quarter 4	9.50	8.55	0.110

Since our initial quarter as a publicly-traded REIT, we have made regular quarterly distributions to our stockholders. We intend to continue to declare quarterly distributions. However, we cannot provide any assurance as to the amount or timing of future distributions. For a description of restrictions on EdR regarding the payment of distributions, see “Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Fourth Amended Revolver, Master Secured Credit Facility, Unsecured Term Loan and Other Indebtedness,” “Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations — Distributions” and Note 10, “Debt,” to our accompanying consolidated financial statements.

To the extent that we make distributions in excess of our earnings and profits, as computed for federal income tax purposes, these distributions will represent a return of capital, rather than a dividend, for federal income tax purposes. Distributions that are treated as a return of capital for federal income tax purposes will reduce the stockholder’s basis in its shares (but not below zero) and therefore can result in the stockholder having a higher gain upon a subsequent sale of such shares. Return of capital distributions in excess of a stockholder’s basis generally will be treated as gains from the sale of such shares for federal income tax purposes.

Issuer Repurchases of Equity Securities

During the quarter ended December 31, 2013, certain of our employees surrendered shares of common stock owned by them to satisfy their statutory minimum federal and state tax obligations associated with the vesting of restricted shares of common stock and restricted stock units issued under the Education Realty Trust, Inc. 2011 Omnibus Equity Incentive Plan, or the 2011 Plan. The following table summarizes all of these repurchases during the fourth quarter of 2013:



Period	Total Number of Shares Purchased⁽¹⁾	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs
October 1 – 31, 2013	—	$	—	—	—
November 1 – 30, 2013	—	$	—	—	—
December 1 – 31, 2013	1,641	$	8.82	—	—
Total	1,641	$	8.82	—	—

(1) These amounts represent shares surrendered by certain employees to satisfy statutory minimum federal and state tax obligations in connection with the vesting of restricted shares of common stock and restricted stock units.

Amended and Restated Dividend Reinvestment and Direct Stock Purchase Plan

In September 2012, the Trust adopted the Amended and Restated Dividend Reinvestment and Direct Stock Purchase Plan, or the DRSPP, which offers the following:


•	automatic reinvestment of some or all of the cash distributions paid on common stock, shares of other classes of stock that we might issue in the future and units of limited partnership interest;


•	an opportunity to make an initial purchase of our common stock and to acquire additional shares over time; and


•	safekeeping of shares and accounting for distributions received and reinvested at no cost.

Shares of common stock purchased under the DRSPP will be either issued by EdR or acquired directly from third parties in the open market or in privately negotiated transactions. Subject to certain conditions and at our sole discretion, the discount from market prices, if any, on all shares of common stock purchased directly from us will range from 0% to 5%.

We will determine the source of shares available through the DRSPP based on market conditions, relative transaction costs and our need for additional capital. To the extent the DRSPP acquires shares of common stock directly from EdR, we will receive additional capital for general corporate purposes.

During the three months ended December 31, 2013, in connection with the DRSPP, we directed the plan administrator to purchase 4,015 shares of our common stock for $35,957 in the aggregate in the open market pursuant to the dividend reinvestment component of the DRSPP with respect to our dividend for the fourth quarter of 2013. We also directed the plan administrator to purchase 1,762 shares of our common stock for $15,800 in the aggregate in the open market for investors pursuant to the direct stock purchase component of the DRSPP. The following chart summarizes these purchases of our common stock for the three months ended December 31, 2013.



Period	Total Number of Shares Purchased⁽¹⁾	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs
October 1 – 31, 2013	160	$	9.34	—	—
November 1 – 30, 2013	5,232	$	8.95	—	—
December 1 – 31, 2013	385	$	8.82	—	—
Total	5,777	$	8.96	—	—

(1) All shares of common stock were purchased in the open market pursuant to the terms of our DRSPP. Our Board of Directors authorized the issuance or purchase of 4,000,000 shares of common stock under the DRSPP.

Recent Sales of Unregistered Securities

None.

COMPARISON OF 60 MONTH CUMULATIVE TOTAL RETURN

Among Education Realty Trust, Inc., The S&P 500 Index

And The MSCI US REIT Index

The following graph compares the cumulative total return of our common stock to the Standard & Poor’s 500 Index, or the S&P 500, and to the Morgan Stanley Capital International U.S. REIT Index, or the MSCI US REIT Index, for the period from December 31, 2008 through December 31, 2013. The graph assumes an initial investment of $100 in our common stock and in each of the indices, and also assumes the reinvestment of dividends.



	Period Ending
Index	12/31/2008	12/31/2009	12/31/2010	12/31/2011	12/31/2012	12/31/2013
Education Realty Trust, Inc.	100.00	99.77	165.14	223.49	239.75	207.26
S&P 500	100.00	126.46	145.51	148.59	172.37	228.19
MSCI US REIT	100.00	128.61	165.23	179.60	211.50	216.73

The performance comparisons noted in the graph shall not be deemed incorporated by reference by any general statement incorporating by reference this Annual Report on Form 10-K into any filing under the Securities Act or under the Exchange Act, except to the extent that we specifically incorporate this graph by reference, and shall not otherwise be deemed filed under the Securities Act and/or Exchange Act.

Item 6. Selected Financial Data.

The following table sets forth selected financial and operating data on a consolidated historical basis for EdR.

The following information presented below does not provide all of the information contained in our financial statements, including the related notes. You should read the information below in conjunction with the historical consolidated financial statements and related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this Annual Report on Form 10-K.

STATEMENT OF OPERATIONS DATA



	Year Ended December 31,
	2013			2012			2011			2010			2009
	(In thousands, except per share data)
Revenues:
Collegiate housing leasing revenue	$	167,476		$	124,087		$	91,517		$	79,283		$	75,617
Third-party development services	2,989			820			4,103			2,483			8,178
Third-party management services	3,697			3,446			3,336			3,189			3,221
Operating expense reimbursements	10,214			9,593			8,604			14,519			9,722
Total revenues	184,376			137,946			107,560			99,474			96,738
Operating expenses:
Collegiate housing leasing operations	79,957			59,524			44,892			40,759			40,950
General and administrative	14,155			14,176			12,316			13,373			10,952
Depreciation and amortization	48,098			33,240			23,858			19,866			17,946
Ground lease expense	7,622			6,395			5,498			1,528			207
Reimbursable operating expenses	10,214			9,593			8,604			13,603			9,722
Total operating expenses	160,046			122,928			95,168			89,129			79,777
Operating income	24,330			15,018			12,392			10,345			16,961
Nonoperating expenses	18,837			15,322			18,647			19,467			17,851
Income (loss) from continuing operations before equity in earnings (losses) of unconsolidated entities, income taxes and discontinued operations	5,493			(304		)	(6,255		)	(9,122		)	(890		)
Equity in earnings (losses) of unconsolidated entities	(203		)	(363		)	(447		)	(260		)	(1,410		)
Income (loss) before income taxes and discontinued operations	5,290			(667		)	(6,702		)	(9,382		)	(2,300		)
Income tax expense (benefit)	203			(884		)	(95		)	442			1,905
Income (loss) from continuing operations	5,087			217			(6,607		)	(9,824		)	(4,205		)
Discontinued operations:
Income (loss) from operations of discontinued operations	(4,369		)	2,924			(6,556		)	(33,078		)	(2,886		)
Gain on sale of collegiate housing property	3,913			5,496			2,388			611			—
Income (loss) from discontinued operations	(456		)	8,420			(4,168		)	(32,467		)	(2,886		)
Net income (loss)	4,631			8,637			(10,775		)	(42,291		)	(7,091		)
Less: Net income (loss) attributable to the noncontrolling interests	308			216			239			(233		)	164



Net income (loss) attributable to Education Realty Trust, Inc.	$	4,323		$	8,421	$	(11,014	)	$	(42,058	)	$	(7,255	)
Earnings per share information:
Income (loss) per share – basic and diluted
Continuing operations	$	0.04		$	—	$	(0.09	)	$	(0.18	)	$	(0.11	)
Discontinued operations	—			0.08		(0.05		)	(0.56		)	(0.07		)
Net income (loss) per share	$	0.04		$	0.08	$	(0.14	)	$	(0.74	)	$	(0.18	)
Weighted average common shares outstanding
Basic	114,432			101,244		75,485			57,536			40,496
Diluted	115,470			102,317		75,485			57,536			40,496
Amounts attributable to Education Realty Trust, Inc. – common stockholders:
Income (loss) from continuing operations, net of noncontrolling interests	4,776			68		(6,879		)	(10,081		)	(4,457		)
Income (loss) from discontinued operations, net of noncontrolling interests	(453		)	8,353		(4,135		)	(31,977		)	(2,798		)
Net income (loss)	$	4,323		$	8,421	$	(11,014	)	$	(42,058	)	$	(7,255	)

BALANCE SHEET DATA



	As of December 31,
	2013		2012		2011		2010		2009
	(In thousands)
Assets:
Collegiate housing properties, net	$	1,505,672	$	1,220,266	$	860,167	$	698,793	$	749,884
Other assets, net	104,893		104,421		117,642		37,887		54,729
Total assets	$	1,610,565	$	1,324,687	$	977,809	$	736,680	$	804,613
Liabilities and equity:
Mortgage and construction notes payable	$	422,681	$	398,846	$	358,504	$	367,631	$	406,365
Other indebtedness	356,900		79,000		—		3,700		—
Other liabilities	91,144		75,087		46,175		30,567		22,004
Total liabilities	870,725		552,933		404,679		401,898		428,369
Redeemable noncontrolling interests	9,871		8,944		9,776		10,039		11,079
Equity	729,969		762,810		563,354		324,743		365,165
Total liabilities and equity	$	1,610,565	$	1,324,687	$	977,809	$	736,680	$	804,613

OTHER DATA



	As of December 31,
	2013			2012			2011			2010			2009
	(In thousands, except per share data)
Funds from operations (FFO)⁽¹⁾:
Net income (loss) attributable to Education Realty Trust, Inc.	$	4,323		$	8,421		$	(11,014	)	$	(42,058	)	$	(7,255	)
Gain on sale of collegiate housing property	(3,913		)	(5,496		)	(2,388		)	(611		)	—
Loss on impairment of collegiate housing assets	5,001			—			7,859			33,610			3,173
Collegiate housing property depreciation and amortization of lease intangibles	49,316			37,237			29,101			29,940			28,522
Equity portion of real estate depreciation and amortization on equity investees	196			225			412			479			512
Equity portion of loss on sale of collegiate housing property on equity investee	—			88			256			137			—
Noncontrolling interests	249			305			244			(233		)	164
Funds from operations available to all stock and unitholders	$	55,172		$	40,780		$	24,470		$	21,264		$	25,116
Other adjustments to FFO:
Acquisition costs	393			1,110			741			1,467			—
Straight-line adjustment for ground leases	5,255			4,364			4,208			984			—
Reorganization/severance costs, net of tax	—			—			—			447			—
Loss (gain) on extinguishment of debt	—			—			757			1,426			(830		)
Impact of other adjustments to FFO	5,648			5,474			5,706			4,324			(830		)
FFO on participating developments:
Interest on loan to participating development	1,825			1,830			1,598			329			—
Development fees on participating development, net of costs and tax	454			91			887			128			—
FFO on participating developments	2,279			1,921			2,485			457			—
Core funds from operations available to all stock and unitholders⁽²⁾	$	63,099		$	48,175		$	32,661		$	26,045		$	24,286



	As of December 31,
	2013			2012			2011			2010			2009
	(In thousands, except per share data and selected community information)
Cash flow information:
Net cash provided by operations	$	77,407		$	51,394		$	34,037		$	32,269		$	33,235
Net cash used in investing	(298,313		)	(368,948		)	(159,813		)	(20,474		)	(41,638		)
Net cash provided by (used in) financing	225,940			258,780			194,631			(36,006		)	30,569
Per share and distribution data:
Net income (loss) per share – basic and diluted	$	0.04		$	0.08		$	(0.14	)	$	(0.73	)	$	(0.18	)
Cash distributions declared per share/unit	0.42			0.34			0.26			0.20			0.36
Cash distributions declared	48,459			34,491			18,224			12,295			15,330
Selected community information⁽³⁾:
Units⁽⁴⁾	9,933			7,930			5,897			5,044			4,880
Beds⁽⁴⁾	27,982			23,263			18,257			16,113			15,473
Occupancy⁽⁵⁾	90.3		%	90.9		%	91.8		%	91.3		%	90.5		%
Revenue per available bed⁽⁶⁾	$	555		$	513		$	456		$	423		$	418

(1)

As defined by the National Association of Real Estate Investment Trusts (“NAREIT”), FFO represents net income (loss) (computed in accordance with accounting principles generally accepted in the United States ("GAAP")), excluding gains (or losses) from sales of property and impairment write-downs of depreciable real estate plus real estate-related depreciation and amortization and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect funds from operations on the same basis. We present FFO available to all stockholders and unitholders 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. As such, we also exclude the impact of noncontrolling interest in our calculation. 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. For a reconciliation of our FFO available to our stockholders and unitholders to our net income (loss) for the years ended December 31, 2013, 2012 and 2011, see “Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations — Funds From Operations.”

(2)

Core FFO is defined as FFO adjusted to include the economic impact of revenue on participating projects for which recognition is deferred for GAAP purposes. The adjustment for this revenue is calculated on the same percentage of completion method used to recognize revenue on third-party development projects. Core FFO also includes adjustments to exclude the impact of straight-line adjustments for ground leases, gains/losses on extinguishment of debt, transaction costs related to acquisitions and reorganization or severance costs. We believe that these adjustments are appropriate in determining Core FFO as they are not indicative of the operating performance of the Trust’s assets. In addition, management uses Core FFO in the assessment of the Trust’s operating performance and comparison to its industry peers and believes that Core FFO is a useful supplemental measure for the investing community to use in comparing the Trust to other REITs as many REITs provide some form of adjusted or modified FFO.


(3)	The selected community information represents all owned communities for 2013 (49), 2012 (41), 2011 (32), 2010 (26) and 2009 (25). This information excludes property information related to discontinued operations for all years.


(4)	Represents data as of December 31.


(5)	Average of the month-end occupancy rates for the period.


(6)	Revenue per available bed is equal to the total collegiate housing leasing revenue divided by the sum of the design beds (including staff and model beds) at the property each month. Revenue and design beds for any acquired properties are included prospectively from acquisition date.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Management’s Discussion and Analysis of Financial Condition and Results of Operations, or MD&A, is designed to provide a reader of our financial statements with a narrative on our financial condition, results of operations, liquidity and certain other factors that may affect our future results from the perspective of our management. Our MD&A is presented in eleven sections:


•	Overview


•	Our Business Segments


•	Trends and Outlook


•	Critical Accounting Policies


•	Results of Operations


•	Liquidity and Capital Resources


•	Distributions


•	Off-Balance Sheet Arrangements


•	Non GAAP Measures


•	Inflation


•	Recent Accounting Pronouncements

We believe our MD&A should be read in conjunction with the Consolidated Financial Statements and related notes included in "Item 8. Financial Statements and Supplementary Data" and the risk factors included in "Item 1A. Risk Factors" of this Annual Report.

Unless otherwise noted, this MD&A relates only to results from continuing operations. The years ended December 31, 2013, 2012 and 2011 reflect the classification of the following communities’ financial results as discontinued operations: Troy Place, The Reserve at Jacksonville, The Reserve at Martin, The Chase at Murray and Clemson Place (all sold in January 2011); Collegiate Village (sold in April 2011); Clayton Station (sold in June 2011); NorthPointe and The Reserve on Frankford (both sold in September 2012); The Reserve at Star Pass (sold in December 2012); College Grove (sold in June 2013) and Pointe at Western (sold in December 2013).

Overview

We are a self-managed and self-advised real estate investment trust, or REIT, engaged in the ownership, acquisition, development and management of high-quality collegiate housing communities. We also provide collegiate housing management and development consulting services to universities, charitable foundations and other third parties. We believe that we are one of the largest private owners, developers and managers of high-quality collegiate housing communities in the United States in terms of total beds both owned and under management.

We earn income from rental payments we receive as a result of our ownership of collegiate housing communities. We also earn income by performing property management services and development consulting services for third parties through our Management Company and our Development Company, respectively.

We have elected to be taxed as a REIT for federal income tax purposes.

Our Business Segments

We define business segments by their distinct customer base and the service provided. Management has identified three reportable segments: collegiate housing leasing, development consulting services and management services. We evaluate each segment’s performance based on net operating income, which is defined as income before depreciation, amortization, ground leases, impairment losses, interest expense (income), gains (losses) on extinguishment of debt, equity in earnings of unconsolidated entities, noncontrolling interests and discontinued operations. The accounting policies of the reportable segments are described in more detail in the summary of significant accounting policies in the notes to the accompanying consolidated financial statements.

Collegiate housing leasing

Collegiate housing leasing revenue represented approximately 95.7% of our total revenues, excluding operating expense reimbursements and other adjustments/eliminations included in our segment reporting, for the year ended December 31, 2013.

Unlike multi-family housing where apartments are leased by the unit, collegiate-housing communities are typically leased by the bed on an individual lease liability basis. Individual lease liability limits each resident’s liability to his or her own rent without liability for a roommate’s rent. The number of lease contracts that we administer is therefore equivalent to the number of beds occupied instead of the number of apartment units occupied. A parent or guardian is required to execute each lease as a guarantor unless the resident provides adequate proof of income and/or pays a deposit, which is usually equal to two months rent.

Due to our predominantly private bedroom accommodations and individual lease liability, the high level of student-oriented amenities and the fact that most units are furnished and typically rent includes utilities, cable television and internet service, we believe our communities in most cases can command higher per-unit and per-square foot rental rates than most multi-family communities in the same geographic markets. We are also typically able to command higher rental rates than on-campus collegiate housing, which tends to offer fewer amenities.

The majority of our leases commence mid-August and terminate the last day of July. These dates generally coincide with the commencement of the universities’ fall academic term and the completion of the subsequent summer school session. As such, we are required to re-lease each community in its entirety each year, resulting in significant turnover in our tenant population from year to year. In 2013 and 2012, approximately 81.3% and 74.6%, respectively, of our leased beds were to students who were first-time residents at our communities. As a result, we are highly dependent upon the effectiveness of our marketing and leasing efforts during the annual leasing season that typically begins in November and ends in August of each year. Our communities’ occupancy rates are therefore typically stable during the August to July academic year but are susceptible to fluctuation at the commencement of each new academic year.

Prior to the commencement of each new lease period, mostly during the first two weeks of August, but also during September at some communities, we prepare the units for new incoming tenants. Other than revenue generated by in-place leases for returning tenants, we do not generally recognize lease revenue during this period referred to as “Turn,” as we have no leases in place. In addition, we incur significant expenses during Turn to make our units ready for occupancy. These expenses are recognized when incurred. This Turn period results in seasonality in our operating results during the third quarter of each year.

Development consulting services

For the year ended December 31, 2013, revenue from our development consulting services represented approximately 2.2% of our total revenues, excluding operating expense reimbursements and other adjustments/eliminations included in our segment reporting. We provide development consulting services primarily to colleges and universities seeking to modernize their on-campus collegiate housing communities, to other third-party investors and to our collegiate housing leasing segment in order to develop communities for our ownership. Our development consulting services typically include the following:


•	market analysis and evaluation of collegiate housing needs and options;


•	cooperation with college or university in architectural design;


•	negotiation of ground lease, development agreement, construction contract, architectural contract and bond documents;


•	oversight of architectural design process;


•	coordination of governmental and university plan approvals;


•	oversight of construction process;


•	design, purchase and installation of furniture;


•	pre-opening marketing to students; and


•	obtaining final approvals of construction.

Fees for these services are typically 3 – 5% of the total cost of a project and are payable over the life of the construction period, which in most cases is one to two years in length. Occasionally, the development consulting contracts include a provision whereby the Trust can participate in project savings resulting from successful cost management efforts. These revenues are recognized once all contractual terms have been satisfied and no future performance requirements exist. This typically occurs after construction is complete. As part of the development agreements, there are certain costs we pay on behalf of universities or third-party investors. These costs are included in reimbursable operating expenses and are required to be reimbursed to us by the universities or third-party investors. We recognize the expense and revenue related to these reimbursements when incurred.

These operating expenses are wholly reimbursable and therefore not considered by management when analyzing the operating performance of our development consulting services business.

Management services

For the year ended December 31, 2013, revenue from our management services segment represented approximately 2.1% of our total revenues, excluding operating expense reimbursements and other adjustments/eliminations included in our segment reporting. We provide management services for collegiate housing communities owned by educational institutions, charitable foundations, the Trust and others. Our management services typically cover all aspects of community operations, including residence life and student development, marketing, leasing administration, strategic relationships, information systems and accounting services. We provide these services pursuant to multi-year management agreements under which management fees are typically 3 – 5% of leasing revenue. These agreements usually have an initial term of two to five years with renewal options of like terms. As part of the management agreements, there are certain payroll and related expenses we pay on behalf of the property owners. These costs are included in reimbursable operating expenses and are required to be reimbursed to us by the property owners. We recognize the expense and revenue related to these reimbursements when incurred. These operating expenses are wholly reimbursable and therefore not considered by management when analyzing the operating performance of our management services business.

Trends and Outlook

Rents and occupancy

We manage our communities to maximize revenues, which are primarily driven by two components: rental rates and occupancy. We customarily adjust rental rates in order to maximize revenues, which in some cases results in a lower occupancy rate, but in most cases results in stable or increasing revenue from the community. As a result, a decrease in occupancy may be offset by an increase in rental rates and may not be material to our operations. Periodically, certain of our markets experience increases in new on-campus collegiate housing provided by colleges and universities and off-campus collegiate housing provided by private owners. This additional collegiate housing both on and off campus can create competitive pressure on rental rates and occupancy.

Over the last couple of years, there has been an increase in supply across the student housing industry. In the markets we serve, we are projecting a 2.2% increase in supply in 2014, which is consistent with the level of new supply added in 2013. This growth in student housing beds is slightly outpacing enrollment growth in those markets where the 3-year compounded annual growth rate in enrollment is 1.4%. Although these statistics in themselves are not favorable, we feel that it does not reflect the pent-up demand that exists in college communities for new, purpose-built student housing product, where students are moving out of old, outdated housing and into the newer communities with more amenities. We believe that the 5% growth in same store revenue we achieved in our last leasing cycle for the 2013-2014 academic year and our strong start to preleasing for the 2014-2015 academic year as well as other market data support this point. As a result, we believe that the growth characteristics of our portfolio, which has produced a compounded annual growth rate of 4.3% over the last four years, has not changed significantly.

We define our same-community portfolio as properties that were owned and operating for the full year ended December 31, 2013 and 2012 and are not conducting or planning to conduct substantial development or redevelopment activities and are not classified as discontinued operations. The collegiate housing community referred to as 3949 at Saint Louis University is excluded from our same-community portfolio as it was damaged by fire on July 17, 2012. The community was insured and reopened in August 2013. 3949 is the only community excluded from same-community as a result of redevelopment activities. Our communities’ occupancy rates are typically stable during the August to July academic year but are susceptible to fluctuation at the commencement of each new academic year. For the year ended December 31, 2013, same-community revenue per available bed increased to $506 and same-community physical occupancy decreased to 90.1%, compared to same-community revenue per available bed of $500 and same-community physical occupancy of 91.4% for the year ended December 31, 2012. The results represent averages for the Trust’s same-community portfolio, which are not necessarily indicative of every community in the portfolio. Individual communities can and do perform both above and below these averages, and, at times, an individual community may experience a decline in total revenue due to local university and economic conditions. Our management focus is to assess these situations and address them quickly in an effort to minimize the Trust’s exposure and reverse any negative trends.

The same-community portfolio opened the 2013/2014 lease term with a 5.0% increase in rental revenue. Opening occupancy was up 300 basis points to 94.1% and net rental rates were 2.0% above the prior lease term. New-communities opened the

2013/2014 with an average occupancy of 95.1%, with four out of five of the 2013 development communities opening at or above 100% occupancy.

Development consulting services

Prior to the recent recession, the Trust historically earned more than $5.0 million annually in third-party development revenue. However, as a result of a deterioration in the credit markets, which began in late 2008, financing of new projects became harder to obtain, and the Trust’s third-party development revenue declined from $8.2 million for the year ended December 31, 2009 to $2.5 million in 2010 and then rebounded to $4.1 million in 2011 before declining to $0.8 million for the year ended December 31, 2012. For the year ended December 31, 2013, third-party development revenue was $3.0 million. Beginning in the summer of 2010, our development team began seeing improvement in the credit markets and an increase in interest from colleges and universities that are considering new collegiate housing. We also continue to receive requests for proposals on new development projects. Although volume has returned to the market, we would not expect our future run rate of third-party development fees to return to the levels achieved in 2009.

We develop collegiate housing communities for our ownership, and we plan to increase self-development activity going forward. The On-Campus Equity Plan, or The ONE Plan^SM, is our private equity program for universities, which allows universities to use the Trust’s equity and financial stability to develop and revitalize campus housing while preserving their credit capacity for other campus projects. This program is designed to provide the Trust’s equity to solve a university’s housing needs through a ground lease structure where the Trust owns the land improvements and operates the community. Others in the industry have similar programs and to date the Trust has ten ONE Plan^SM projects completed or underway. In December 2011, the Trust was selected by the University of Kentucky, or UK, to negotiate the potential revitalization of UK's entire campus housing portfolio and expansion of UK's campus housing portfolio to more than 9,000 beds within five to seven years, which we refer to as the UK Campus Housing Revitalization Plan. Construction on Phase I of the UK Campus Revitalization Plan, a 601-bed community called Central Hall I & II opened in August 2013 with all beds leased. Construction of Phase II, which includes four communities with 2,381 beds and a total project cost of approximately $138.0 million, is well underway for a summer 2014 opening. In May 2013, the Capital Projects and Bond Oversight Committee of the Kentucky Legislature provided the final required approval to proceed with Phase II-B, the next phase of the UK Campus Housing Revitalization Plan. With a total project cost of $101.2 million, this phase of the project is expected to be delivered in 2015 and will include 1,610 beds in three buildings. The UK Board of Trustees recently approved the 2016 deliveries, comprising 1,141 beds at a total cost of $83.9 million. We view our entry into the partnership with UK as a defining moment, not only for EdR, but also for our industry. Most state universities face many of the same challenges as UK, including reduced support from constrained state budgets, aged on-campus housing and demands on institutional funds for academic and support services. This declining state support for higher education is the norm rather than the exception. These external factors provide a great opportunity for EdR. The volume of discussions we are having with other universities has increased over the last year as additional universities investigate this type of structure to replace their aging on-campus housing stock. We expect the volume of true third-party fee development contracts to be impacted as more universities avail themselves of this new program.

While considering the possible shift in the type of projects universities pursue, the amount and timing of future revenue from development consulting services will be contingent upon our ability to successfully compete in public colleges and universities’ competitive procurement processes, our ability to successfully structure financing of these projects and our ability to ensure completion of construction within committed timelines and budgets. To date, we have completed construction on all of our development consulting projects in time for their targeted occupancy dates.

Collegiate housing operating costs

For the last four years, excluding the increase in 2013, same-community operating expenses have either declined or increased no more than 2.9%. For the year ended December 31, 2013, same-community operating expenses increased approximately 4.2%. This increase was mainly driven by higher marketing costs and real estate taxes. We expect full year same-community operating expenses to increase between 3.0-4.0% going forward, which we believe is a reasonable level of growth for the foreseeable future.

General and administrative costs

G&A costs for the year ended December 31, 2013 were $7.1 million (before development pursuit costs and acquisition costs), an increase of $0.3 million, or 4.1%, when compared to the same period in the prior year. This increase was the result of salary and general inflationary increases. With the 21% growth in gross assets in 2013 and anticipated 17% growth in gross assets in 2014, we expect general and administrative costs to continue to increase.

Asset repositioning and capital recycling

Since the beginning of 2010, we have made a concerted effort to reposition and improve our owned portfolio with most of the significant process completed prior to 2013. These efforts include the following transactions:



•	In 2010 and 2011, we sold a total of twelve communities for a combined sales price of $112.8 million. These communities were located at mostly smaller universities with limited barriers to entry;



•	Between November 2010 and January 2012, we purchased $256.0 million of assets within walking distance of universities such as the University of Virginia, University of California–Berkeley, University of Notre Dame, Texas Christian University and Saint Louis University;



•	In 2012, we sold three communities, The Reserve at Star Pass and NorthPointe, both serving the University of Arizona, and The Reserve on Frankford, serving Texas Tech University for net cash proceeds of approximately $67.3 million (see Note 5 to the accompanying consolidated financial statements);



•	In 2012, we purchased the collegiate housing community referred to as The Province, adjacent to the campus of East Carolina University, for $50.0 million in cash, The District on 5th, within walking distance of the University of Arizona, for $66.4 million in cash, Campus Village, adjacent to Michigan State University, for $20.9 million in cash, The Province, adjacent to Kent State University for $45.0 million in cash, and The Centre and The Suites at Overton Park, both adjacent to Texas Tech University, for a combined $25.5 million in cash and $48.5 million in assumed debt (see Note 4 to the accompanying consolidated financial statements);



•	In June 2013, we sold College Grove collegiate community serving Middle Tennessee State University for net cash proceeds of approximately $20.2 million (see Note 5 to the accompanying consolidated financial statements);



•	In the third quarter of 2013, we purchased The Cottages at Lindberg serving Purdue University and The Retreat at State College serving Pennsylvania State University for a combined $91.2 million in cash and purchased our joint venture partner's 10% noncontrolling interest in the collegiate housing community referred to as East Edge located near the University of Alabama for $6.9 million in cash (see Note 4 to the accompanying consolidated financial statements);



•	In December 2013, we purchased The Varsity collegiate housing community serving University of Michigan for a purchase price of $54.0 million. We assumed $32.4 million of construction debt related to this acquisition (see Note 4 to the accompanying consolidated financial statements);



•	In December 2013, we sold The Pointe at Western collegiate housing community located in Kalamazoo, Michigan for a net cash proceeds of $20.0 million after closing costs (see Note 5 of the accompanying consolidated financial statements);



•	We are investing in a joint venture to develop a collegiate housing property referred to as The Marshall at the University of Minnesota with our share of anticipated project costs of $47.0 million;



•	We are investing in a joint venture to develop a collegiate housing property referred to as Georgia Heights at the University of Georgia with our share of anticipated project costs of $27.8 million;



•	In 2013, we completed five development projects for our ownership with project costs of $192.4 million within walking distance of universities such as Arizona State University, University of Connecticut and University of Mississippi and directly on the campuses of University of Kentucky and the University of Texas at Austin;



•	We have eleven active development projects that we are developing for our ownership with anticipated aggregate project costs of $398.3 million within walking distance of universities such as the University of Colorado, University of Connecticut and Duke University and directly on the campus of University of Kentucky (see Note 4 to the accompanying consolidated financial statements);



•	We entered into a presale agreement at Florida International University adjacent to Florida International University, in Miami, FL. The $43.5 million acquisition is subject to completion of the project in time for fall 2014 occupancy;



•	Over the last three years we have improved our portfolio's median distance to edge of campus from 0.8 miles to 0.1 miles; and



•	Over the last three years, including communities in our development pipeline, we have increased our average rental rate from $410 to $624 per bed.

Critical Accounting Policies

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions in certain circumstances that affect amounts reported in our financial statements and related notes. In preparing these financial statements, management has utilized all available information, including its past history, industry standards and the current economic environment, among other factors, in forming its estimates and judgments of certain amounts included in the financial statements, giving due consideration to materiality. The ultimate outcome anticipated by management in formulating its estimates may not be realized. Application of the critical accounting policies below involves the exercise of judgment and use of assumptions as to future uncertainties and, as a result, actual results could differ from these estimates. In addition, other companies in similar businesses may utilize different estimation policies and methodologies, which may impact the comparability of our results of operations and financial condition to those companies.

Collegiate housing leasing revenue recognition

Collegiate housing leasing revenue is comprised of all revenues related to the leasing activities at our collegiate housing communities and includes revenues from leasing apartments by the bed, food services, parking space rentals and certain ancillary services.

Students are required to execute lease contracts with payment schedules that vary from per semester to monthly. Generally, a parental guarantee must accompany each executed contract. Receivables are recorded when due, while leasing revenue and related lease incentives/concessions and nonrefundable application and service fees are recognized on a straight-line basis over the term of the contracts. Balances are considered past due when payment is not received on the contractual due date. Allowances for doubtful accounts are established by management when it is determined that collection is doubtful.

Revenue and cost recognition of development consulting services

Costs associated with the pursuit of third-party development consulting contracts are expensed as incurred until such time as we have been notified of a contract award or reimbursement that has been otherwise guaranteed by the customer. At such time, the reimbursable portion of such costs is recorded as a receivable. Development consulting revenues are recognized using the percentage of completion method as determined by construction costs incurred relative to the total estimated construction costs. Occasionally, our development consulting contracts include a provision whereby we can participate in project savings resulting from our successful cost management efforts. We recognize these revenues once all contractual terms have been satisfied and we have no future performance requirements. This typically occurs after construction is complete. Costs associated with development consulting services are expensed as incurred. We generally receive a significant percentage of our fees for development consulting services upon closing of the project financing, a portion of the fee over the construction period and the balance upon substantial completion of construction. Because revenue from these services is recognized for financial reporting purposes utilizing the percentage of completion method, differences occur between amounts received and revenues recognized. Differences also occur between amounts recognized for tax purposes and those recognized for financial reporting purposes.

We also periodically enter into joint venture arrangements whereby we provide development consulting services to third-party collegiate housing owners in an agency capacity. We recognize our portion of the earnings in each joint venture based on our ownership interest, which is reflected after net operating income in our condensed consolidated statement of operations as equity in earnings of unconsolidated entities. Our revenue and operating expenses could fluctuate from period to period based on the extent to which we utilize joint venture arrangements to provide third-party development consulting services.

Collegiate housing property acquisitions and dispositions

Land, land improvements, buildings and improvements and furniture, fixtures and equipment are recorded at cost. Buildings and improvements are depreciated over 15 to 40 years, land improvements are depreciated over 15 years and furniture, fixtures, and equipment are depreciated over 3 to 7 years. Depreciation is computed using the straight-line method for financial reporting purposes.

Results of operations for acquired collegiate housing communities are included in the Trust’s results of operations from the respective dates of acquisition. Appraisals, estimates of cash flows and other valuation techniques are used to allocate the purchase price of acquired property between land, land improvements, buildings and improvements, furniture, fixtures and equipment and identifiable intangibles such as amounts related to in-place leases. The Trust recognizes pre-acquisition costs, which include legal and professional fees and other third-party costs related directly to the acquisition of a community when they are incurred.

Management assesses impairment of long-lived assets to be held and used whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Management uses an estimate of future undiscounted cash flows of the related asset based on its intended use to determine whether the carrying value is recoverable. If the Trust determines that the carrying value of an asset is not recoverable, the fair value of the asset is estimated and an impairment loss is recorded to the extent the carrying value exceeds estimated fair value (see Note 2 to the accompanying consolidated financial statements). Management estimates fair value using discounted cash flow models, market appraisals if available, and other market participant data.

When a collegiate housing community has met the criteria to be classified as held for sale, the fair value less cost to sell such asset is estimated. If fair value less cost to sell the asset is less than the carrying amount of the asset, an impairment charge is recorded for the estimated loss. Depreciation expense is no longer recorded once a collegiate housing community has met the held for sale criteria. The related carrying value of the community is recorded as held for sale in the accompanying consolidated balance sheet and operations of collegiate housing communities that are sold or classified as held for sale are recorded as part of discontinued operations for all periods presented.

Repairs and maintenance

The costs of ordinary repairs and maintenance are charged to operations when incurred. Major improvements that extend the life of an asset beyond one year are capitalized and depreciated over the remaining useful life of the asset. Planned major repair, maintenance and improvement projects are capitalized when performed. In some circumstances, the lenders require us to maintain a reserve account for future repairs and capital expenditures. These amounts are not available for current use and are recorded as restricted cash on our accompanying consolidated balance sheets.

Use of estimates

Significant estimates and assumptions are used by management in determining the recognition of third-party development consulting revenue under the percentage of completion method, useful lives of collegiate housing assets, the valuation of goodwill, the initial valuations and underlying allocations of purchase price in connection with collegiate housing property acquisitions, the determination of fair value for impairment assessments and in recording the allowance for doubtful accounts. Actual results could differ from those estimates.

We review our assets, including our collegiate housing communities, communities under development and goodwill for potential impairment indicators whenever events or circumstances indicate that the carrying value might not be recoverable. Impairment indicators include, but are not limited to, declines in our market capitalization, overall market factors, changes in cash flows, significant decreases in net operating income and occupancies at our operating properties, changes in projected completion dates of our development projects and sustainability of development projects. Our tests for impairment are based on the most current information available and if conditions change or if our plans regarding our assets change, it could result in additional impairment charges in the future. However, based on our plans with respect to our operating properties and those under development, we believe the carrying amounts are recoverable.

Results of Operations for the Years Ended December 31, 2013 and 2012

The following table presents our results of operations for the years ended December 31, 2013 and 2012 (amounts in thousands):



		Year ended December 31,
		2013			2012			Change ($)			Change (%)
Collegiate Housing Leasing:
	Collegiate housing leasing revenue	$	167,476		$	124,087		$	43,389		35.0	%
	Student housing leasing operations	79,957			59,524			20,433			34.3	%
	Net operating income	$	87,519		$	64,563		$	22,956		35.6	%

Development Consulting Services:
	Third-party development consulting services	$	3,759		$	1,018		$	2,741		269.3	%
	General and administrative	4,027			3,528			499			14.1	%
	Net operating loss	$	(268	)	$	(2,510	)	$	2,242		(89.3	)%

Management Services:
	Third-party management services	$	3,697		$	3,446		$	251		7.3	%
	General and administrative	2,450			2,779			(329		)	(11.8	)%
	Net operating income	$	1,247		$	667		$	580		87.0	%

Reconciliations:
	Segment revenue	$	174,932		$	128,551		$	46,381		36.1	%
	Operating expense reimbursements	10,214			9,593			621			6.5	%
	Eliminations / adjustments⁽¹⁾	(770		)	(198		)	(572		)	288.9	%
	Total segment revenues	$	184,376		$	137,946		$	46,430		33.7	%

	Segment operating expenses	$	86,434		$	65,831		$	20,603		31.3	%
	Reimbursable operating expenses	10,214			9,593			621			6.5	%
	Eliminations / adjustments⁽¹⁾	—			(44		)	44			(100.0	)%
	Total segment operating expenses	$	96,648		$	75,380		$	21,268		28.2	%

	Segment net operating income	$	87,728		$	62,566		$	25,162		40.2	%
	Other unallocated general and administrative expenses	(7,678		)	(7,913		)	235			(3.0	)%
	Depreciation and amortization	(48,098		)	(33,240		)	(14,858		)	44.7	%
	Ground lease	(7,622		)	(6,395		)	(1,227		)	19.2	%
	Nonoperating expenses	(18,837		)	(15,322		)	(3,515		)	22.9	%
	Equity in earnings (losses) of unconsolidated entities	(203		)	(363		)	160			(44.1	)%
	Income (loss) before income taxes and discontinued operations	$	5,290		$	(667	)	$	5,957		(893.1	)%

	(1) The eliminations / adjustments to segment revenues eliminate the deferred development fee on the participating project at the Science + Technology Park at Johns Hopkins, which is not recognized in the accompanying consolidated financial statements. The eliminations / adjustments to segment expenses eliminate internal development costs incurred relating to the development services on the participating project.

Collegiate housing leasing

Collegiate housing operating statistics for owned communities and same-communities for the years ended December 31, 2013 and 2012 were as follows:



	Year Ended December 31, 2013⁽⁹⁾			Year Ended December 31, 2012⁽⁹⁾			Favorable (Unfavorable)
Owned communities:
Occupancy
Physical⁽¹⁾	90.3		%	90.9		%	(60) bps
Economic⁽²⁾	86.4		%	87.5		%	(110) bps
NarPAB⁽³⁾	$	513		$	477		$	36
Other income per avail. bed⁽⁴⁾	$	42		$	36		$	6
RevPAB⁽⁵⁾	$	555		$	513		$	42
Operating expense per bed⁽⁶⁾	$	265		$	246		$	(19	)
Operating margin⁽⁷⁾	52.3		%	52.0		%	30 bps
Design Beds⁽⁸⁾	301,636			242,122			59,514
Same-communities⁽¹⁰⁾:
Occupancy
Physical⁽¹⁾	90.1		%	91.4		%	(130) bps
Economic⁽²⁾	85.3		%	87.0		%	(170) bps
NarPAB⁽³⁾	$	475		$	468		$	7
Other income per avail. bed⁽⁴⁾	$	31		$	32		$	(1	)
RevPAB⁽⁵⁾	$	506		$	500		$	6
Operating expense per bed⁽⁶⁾	$	249		$	239		$	10
Operating margin⁽⁷⁾	51.0		%	52.3		%	(130) bps
Design Beds⁽⁸⁾	222,494			222,494			—

(1)Represents a weighted average of the month-end occupancies for the respective period.

(2)Represents the effective occupancy calculated by taking net apartment rent accounted for on a GAAP basis for the respective period divided by market rent for the respective period.

(3)Net apartment rent per available bed ("NarPAB") represents GAAP net apartment rent for the respective period divided by the sum of the design beds in the portfolio for each of the included months.

(4)Represents other GAAP-based income for the respective period divided by the sum of the design beds in the portfolio for each of the included months. Other income includes service/application fees, late fees, termination fees, parking fees, transfer fees, damage recovery, utility recovery and other miscellaneous fees.

(5)Revenue per available bed ("RevPAB") represents total revenue (net apartment rent plus other income) for the respective period divided by the sum of the design beds in the portfolio for each of the included months.

(6)Represents property-level operating expense excluding management fees, depreciation and amortization and ground/facility lease fees divided by the sum of the design beds for each of the included months

(7)Represents operating income divided by revenue.

(8)Represents the sum of the monthly design beds in the portfolio during the period. Design beds are total beds (including staff and model beds) in the portfolio.

(9)This information excludes property information related to discontinued operations.

(10)Represents operating statistics for communities that were owned by us and were operating for the full years ended December 31, 2013 and 2012.

Total revenue in the collegiate housing leasing segment was $167.5 million for the year ended December 31, 2013. This represents an increase of $43.4 million, or 35.0%, from the same period in 2012. This increase included $42.0 million of revenue related to 18 new communities, which increased the portfolio to nearly 28,000 beds, and $1.4 million of revenue from a 1.2% increase in same-community

revenue. The same-community revenue growth includes essentially flat revenue from the previous lease term then ended in July 2013 and a 5% increase in revenue from the current lease term that started in August. The growth in revenue for the 2013-2014 lease term included a 2.7% increase in net rental rates and a 2.5% improvement in occupancy, partially offset by a 0.3% decline in other income.

Operating expenses in the collegiate housing leasing segment increased $20.4 million, or 34.3%, to $80.0 million for the year ended December 31, 2013 as compared to the same period in 2012. The 18 new communities added $18.2 million of operating expenses over the same period in the prior year. In addition, same-community operating expenses increased $2.2 million, or 4.2%, over the same period in the prior year.

Development consulting services

The following table represents the development consulting projects that were active during the years ended December 31, 2013 and 2012:



			Segment Revenues
Project	Beds	Fee Type	2013		2012		Difference
			(in thousands)
Centennial Hall	454	Development fee	$	—	$	182	$	(182	)
West Chester University of Pennsylvania – Phase II	653	Development fee	934		—		934
East Stroudsburg University of Pennsylvania – Phase II	488	Development fee	—		136		(136		)
Mansfield University of Pennsylvania	634	Development fee	—		35		(35		)
Mansfield University of Pennsylvania – Phase II	684	Development fee	1,361		417		944
Wichita State University	784	Development fee	614		—		614
Miscellaneous consulting fees	—	Consulting fee	80		50		30
Third-party development consulting services total			2,989		820		2,169
Participating project – Science + Technology Park at Johns Hopkins	572	Development fee	770		198		572
Development consulting services total			$	3,759	$	1,018	$	2,741

Development consulting services revenue increased $2.7 million to $3.8 million for the year ended December 31, 2013 as compared to the same period in 2012. As disclosed in the table above, third-party development consulting revenue increased $2.2 million primarily due to continued progress on the Mansfield University of Pennsylvania - Phase II project. Also in 2013, the Trust began development consulting and construction oversight services on the projects at West Chester University of Pennsylvania - Phase II and Wichita State University, which contributed to the total increase in development consulting services revenue from 2012. The Science + Technology Park at Johns Hopkins (see Note 2 to the accompanying consolidated financial statements) contributed $0.6 million to the increase in development revenue due to the participation in project savings resulting from successful cost management efforts. Because the Trust is guaranteeing the construction loan and extending a second mortgage to the development with an initial fixed interest rate of 10%, all revenue on the project is being deferred in the accompanying condensed consolidated financial statements until the second mortgage is repaid and the Trust no longer guarantees the debt. Since management considers these fees when assessing the performance of the segment, they are included in the segment revenue above and eliminated in the segment revenue reconciliations. If the construction loan and second mortgage had been repaid prior to December 31, 2013, the Trust would have recognized development services revenue net of costs of $2.6 million (including participation in cost savings of $0.8 million), guarantee fee revenue of $3.0 million and interest income of $5.6 million since the commencement of the project. We anticipate the repayment of the $18.0 million second mortgage loan made to the Johns Hopkins participating development during the first part of 2014. If this occurs we would recognize the deferred development fees, deferred interest income, and the guarantee fee at that time.

General and administrative expenses for the segment increased $0.5 million, or 14.1%, for the year ended December 31, 2013 compared to the prior year. This increase is primarily attributable to the increase in active development projects. Internal development project costs related to the Science + Technology Park at Johns Hopkins Medical Institute discussed above are deferred in the accompanying condensed consolidated financial statements until revenue associated with this project is recognized. As such, these expenses are eliminated in the reconciliation of segment operating expenses of the segment financial statements.

Management services

Total management services revenue increased $0.3 million, or 7.3%, for the year ended December 31, 2013 when compared to the same period in 2012. This increase is due to the management contract for the Science + Technology Park at Johns Hopkins discussed above, for

which development was completed in August of 2012, and we received a full year of management fees in 2013, and a net increase in fees from existing contracts offset by the loss of two management contracts, one of which the Trust chose to terminate.

General and administrative expenses for our management services segment decreased $0.3 million, or 11.8%, for the year ended December 31, 2013 compared to the same period in the prior year primarily due to the leveraging of our management services department as we increase the communities in our combined portfolio.

Other unallocated general and administrative expenses

Other unallocated general and administrative expenses decreased $0.2 million, or 3.0%, during the year ended December 31, 2013 over the same period in the prior year primarily due to efficiencies gained in association with the growth of our owned portfolio.

Depreciation and amortization

Depreciation and amortization increased $14.9 million, or 44.7%, during the year ended December 31, 2013 over the same period in the prior year. This increase relates primarily to the 18 new properties (acquisitions or developments) opened since January 1, 2012 as discussed above.

Ground lease expense

For the year ended December 31, 2013, the cost of ground leases increased $1.2 million or 19.2%, compared to the same period in the prior year, due to the opening of Campus West at Syracuse University in the fall of 2012, the acquisition of Campus Village at Michigan State University in the fourth quarter of 2012, the increase in ground lease expense at the GrandMarc at Westberry Place at Texas Christian University during 2013, and the opening of 2400 Nueces at the University of Texas at Austin and Central Hall I & II at the University of Kentucky in the fall of 2013. The Trust owns and operates the 2400 Nueces and Central Hall I & II communities under long-term ground leases with the respective universities. The ground lease on the GrandMarc at Westberry Place community is subject to a 53-year ground lease with a fixed-floor annual rent increase. The Trust recognizes ground lease expense on a straight-line basis over the life of the lease.

Nonoperating expenses

For the year ended December 31, 2013, nonoperating expenses increased $3.5 million, or 22.9%, as compared to the same period in the prior year. This increase relates primarily to a $3.1 million increase in interest expense associated with the increase in net borrowings on the Fourth Amended Revolver (as defined below) of $277.9 million during 2013.

Results of Operations for the Years Ended December 31, 2012 and 2011

The following table presents our results of operations for the years ended December 31, 2012 and 2011 (amounts in thousands):



		Year ended December 31,
		2012			2011			Change ($)			Change (%)
Collegiate Housing Leasing:
	Collegiate housing leasing revenue	$	124,087		$	91,517		$	32,570		35.6	%
	Student housing leasing operations	59,524			44,892			14,632			32.6	%
	Net operating income	$	64,563		$	46,625		$	17,938		38.5	%

Development Consulting Services:
	Third-party development consulting services	$	1,018		$	5,682		$	(4,664	)	(82.1	)%
	General and administrative	3,528			2,998			530			17.7	%
	Net operating income (loss)	$	(2,510	)	$	2,684		$	(5,194	)	(193.5	)%

Management Services:
	Third-party management services	$	3,446		$	3,336		$	110		3.3	%
	General and administrative	2,779			2,667			112			4.2	%
	Net operating income	$	667		$	669		$	(2	)	(0.3	)%

Reconciliations:
	Segment revenue	$	128,551		$	100,535		$	28,016		27.9	%
	Operating expense reimbursements	9,593			8,604			989			11.5	%
	Eliminations / adjustments⁽¹⁾	(198		)	(1,579		)	1,381			(87.5	)%
	Total segment revenues	$	137,946		$	107,560		$	30,386		28.3	%

	Segment operating expenses	$	65,831		$	50,557		$	15,274		30.2	%
	Reimbursable operating expenses	9,593			8,604			989			11.5	%
	Eliminations / adjustments⁽¹⁾	(44		)	(75		)	31			(41.3	)%
	Total segment operating expenses	$	75,380		$	59,086		$	16,294		27.6	%

	Segment net operating income	$	62,566		$	48,474		$	14,092		29.1	%
	Other unallocated general and administrative expenses	(7,913		)	(6,726		)	(1,187		)	17.6	%
	Depreciation and amortization	(33,240		)	(23,858		)	(9,382		)	39.3	%
	Ground lease	(6,395		)	(5,498		)	(897		)	16.3	%
	Nonoperating expenses	(15,322		)	(18,647		)	3,325			(17.8	)%
	Equity in earnings (losses) of unconsolidated entities	(363		)	(447		)	84			(18.8	)%
	Loss before income taxes and discontinued operations	$	(667	)	$	(6,702	)	$	6,035		(90.0	)%

	(1) The eliminations / adjustments to segment revenues eliminate the deferred development fee on the participating project at the Science + Technology Park at Johns Hopkins, which is not recognized in the accompanying consolidated financial statements. The eliminations / adjustments to segment expenses eliminate internal development costs incurred relating to the development services on the participating project.

Collegiate housing leasing

Collegiate housing operating statistics for owned communities and same-communities for the years ended December 31, 2012 and 2011 were as follows:



	Year Ended December 31, 2012⁽⁹⁾			Year Ended December 31, 2011⁽⁹⁾			Favorable (Unfavorable)
Owned communities:
Occupancy
Physical⁽¹⁾	90.9		%	91.8		%	(90) bps
Economic⁽²⁾	87.5		%	87.8		%	(30) bps
NarPAB⁽³⁾	$	477		$	430		$	47
Other income per avail. bed⁽⁴⁾	$	36		$	26		$	10
RevPAB⁽⁵⁾	$	513		$	456		$	57
Property operating expense per bed⁽⁶⁾	$	246		$	224		$	22
Operating margin⁽⁷⁾	52.0		%	50.9		%	110 bps
Design Beds⁽⁸⁾	242,122			200,783			41,339
Same communities⁽¹⁰⁾:
Occupancy
Physical⁽¹⁾	92.0		%	93.2		%	(120) bps
Economic⁽²⁾	88.0		%	88.4		%	(40) bps
NarPAB⁽³⁾	$	435		$	417		$	18
Other income per avail. bed⁽⁴⁾	$	26		$	25		$	1
RevPAB⁽⁵⁾	$	461		$	442		$	19
Property operating expense per bed⁽⁶⁾	$	232		$	223		$	(9	)
Operating margin⁽⁷⁾	49.7		%	49.4		%	30 bps
Design Beds⁽⁸⁾	185,729			185,729			$	—


(1)	Represents a weighted average of the month-end occupancies for the respective period.


(2)	Represents the effective occupancy calculated by taking net apartment rent accounted for on a GAAP basis for the respective period divided by market rent for the respective period.


(3)	Represents GAAP net apartment rent for the respective period divided by the sum of the design beds in the portfolio for each of the included months.


(4)	Represents other GAAP-based income for the respective period divided by the sum of the design beds in the portfolio for each of the included months. Other income includes service/application fees, late fees, termination fees, parking fees, transfer fees, damage recovery, utility recovery and other miscellaneous fees.


(5)	Represents total revenue (net apartment rent plus other income) for the respective period divided by the sum of the design beds in the portfolio for each of the included months.


(6)	Represents property-level operating expense excluding management fees, depreciation and amortization and ground/facility lease fees divided by the sum of the design beds for each of the included months.


(7)	Represents operating income divided by revenue.


(8)	Represents the sum of the monthly design beds in the portfolio during the period. Design beds are total beds (including staff and model beds) in the portfolio.


(9)	This information excludes property information related to discontinued operations.


(10)	Represents operating statistics for communities that were operating for the full years ended December 31, 2012 and 2011.

Total revenue in the collegiate housing leasing segment was $124.1 million for the year ended December 31, 2012, an increase of $32.6 million, or 35.6%, from the same period in 2011. This increase included $29.0 million related to the properties acquired during 2011 and 2012 or properties under development that opened in the fall of 2012, and $3.5 million from a 4.3% increase in same-community revenue.

The same-community revenue growth was driven by a 5.3% increase in net rental rates, a 1.3% decline in occupancies, and a 0.3% increase in other rental revenue.

Operating expenses in the collegiate housing leasing segment increased $14.6 million, or 32.6%, to $59.5 million for the year ended December 31, 2012 as compared to the same period in 2011. The properties acquired during 2011 and 2012 or properties under development that opened in the fall of 2012 added $13.0 million of operating expenses over the prior year. In addition, same-community operating expenses increased $1.6 million, or 3.9%, over the same period in the prior year.

Development consulting services

The following table represents the development consulting projects that were active during the years ended December 31, 2012 and 2011:



		Segment Revenues
Project	Beds	2012		2011		Difference
		(in thousands)
Indiana University of Pennsylvania Phase IV	596	$	—	$	456	$	(456	)
Colorado State University – Pueblo II	500	—		1		(1		)
Centennial Hall	454	182		273		(91		)
East Stroudsburg University	969	136		1,886		(1,750		)
Mansfield University of Pennsylvania	634	35		1,362		(1,327		)
Mansfield University of Pennsylvania Phase II	684	417		—		417
Miscellaneous consulting fees	—	50		125		(75		)
Third-party development consulting services total		820		4,103		(3,283		)
Participating project – Science + Technology Park at Johns Hopkins	572	198		1,579		(1,381		)
Development consulting services total		$	1,018	$	5,682	$	(4,664	)

Development consulting services revenue decreased $4.7 million, or 82.1%, to $1.0 million for the year ended December 31, 2012 as compared to the same period in 2011. Third-party development consulting revenue decreased $3.3 million from the prior year due to less development activity on two active third-party development consulting projects offset by $0.5 million of revenue related to the Mansfield University of Pennsylvania - Phase II project which was begun in the third quarter of 2012. The Science + Technology Park at Johns Hopkins (see Note 2 to the accompanying consolidated financial statements) contributed $1.4 million to the decline in revenue as the project was completed early in third quarter of 2012. Due to the fact the Trust is guaranteeing the construction loan and extending a second mortgage to the development, all revenue on the project is being deferred in the accompanying consolidated financial statements until the second mortgage is repaid and the Trust no longer guarantees the debt. Since management considers these fees when assessing the performance of the segment, they are included in the segment revenue above and eliminated in the segment revenue reconciliations. If the construction loan and second mortgage had been repaid prior to December 31, 2012, the Trust would have recognized development services revenue net of costs of $1.9 million, guarantee fee revenue of $3.0 million and interest income of $3.8 million since the commencement of the project.

General and administrative expenses for the segment increased $0.5 million, or 17.7%, for the year ended December 31, 2012 compared to the same period in the prior year. This increase is primarily due to additional payroll costs, net of capitalized payroll on owned developments, related to the increased development activity. Internal development project costs related to the Science + Technology Park at Johns Hopkins discussed above are deferred in the accompanying consolidated financial statements until the revenue associated with this project is recognized. As such, these expenses are included in the segment operating expenses above and eliminated in the segment operating expense reconciliations.

Management services

Total management services revenue increased $0.1 million, or 3.3%, for the year ended December 31, 2012 when compared to the same period in 2011. Existing contracts produced a net increase in fee revenue and five additional contracts, including one community for which development was completed in the fourth quarter of 2011 and four new management contracts added in 2012, further contributed to the increase, which was offset by the loss of three management contracts associated with the sales of the communities.

General and administrative costs for our management services segment increased $0.1 million, or 4.2% for the year ended December 31, 2012 compared to the same period in the prior year primarily due to the growth of the company.

Other unallocated general and administrative expenses

Other unallocated general and administrative expenses increased $1.2 million, or 17.6%, during the year ended December 31, 2012 over the same period in the prior year primarily due to costs associated with the growth of our owned portfolio.

Depreciation and amortization

Depreciation and amortization increased $9.4 million, or 39.3%, during the year ended December 31, 2012 over the same period in the prior year. This increase relates mainly to the purchase of 17 new properties since January 1, 2011 as discussed above.

Ground lease expense

For the year ended December 31, 2012, the cost of ground leases increased $0.9 million, or 16.3%, compared to the same period in the prior year, due to the addition of GrandMarc at Westberry place at Texas Christian University in the fourth quarter of 2011. This community is subject to a 53-year ground lease with a fixed-floor annual rent increase. The Trust recognizes ground lease expense on a straight-line basis over the life of the lease.

Nonoperating expenses

For the year ended December 31, 2012, nonoperating expenses decreased $3.3 million, or 17.8%, as compared to the same period in the prior year. Interest expense decreased $2.9 million primarily related to the capitalization of interest in our eleven owned development projects and an $11.2 million net reduction in mortgage and construction debt since December 31, 2011 excluding debt of $48.5 million that was assumed in December 2012 (see Note 10 to the accompanying consolidated financial statements). Also contributing to the decrease was a loss on extinguishment of debt of $0.4 million taken in the first quarter of 2011 related to the repayment of $35.5 million of variable rate debt.

Equity in earnings of unconsolidated entities

Equity in earnings of unconsolidated entities represents our share of the net income or loss related to investments in unconsolidated entities that own collegiate housing communities. For the years ended December 31, 2012 and 2011 equity in losses was $0.4 million for both years.

Liquidity and Capital Resources

Fourth Amended Revolver

On January 14, 2013, the Operating Partnership entered into a Fourth Amended and Restated Credit Agreement, which amended and restated the existing revolving credit facility dated September 21, 2011. The previous facility (the “Third Amended Revolver”) was secured, had a maximum availability of $175 million and was scheduled to mature on September 21, 2014. The Fourth Amended and Restated Credit Agreement is unsecured, had a maximum availability of $375 million and, within the first four years of the agreement, could be expanded to $500 million upon satisfaction of certain conditions. The Fourth Amended and Restated Credit Agreement was scheduled to mature on January 14, 2017.

On October 24, 2013, the Operating Partnership entered into the First Amendment to the Fourth Amended Revolver (as amended, the "Fourth Amended Revolver"). The amendment increased the maximum borrowing capacity under the facility from $375 million to $500 million with an accordion feature to $700 million, which may be exercised during the first four years subject to satisfaction of certain conditions. The initial maturity date of the Fourth Amended Revolver is January 14, 2018, provided that the Operating Partnership may extend the maturity date for one year subject to certain conditions.

Availability under the Fourth Amended Revolver, as amended, is limited to a “borrowing base availability” equal to the lesser of (i) 60% of the property asset value (as defined in the agreement) and (ii) the loan amount, which would produce a debt service coverage ratio of no less than 1.40. As of December 31, 2013, our borrowing base was $500.0 million, and we had $356.9 million outstanding under the Fourth Amended Revolver; thus, our remaining borrowing base availability was $143.1 million.

The Trust serves as the guarantor for any funds borrowed by the Operating Partnership under the Fourth Amended Revolver. The interest rate per annum applicable to the Fourth Amended Revolver is, at the Operating Partnership’s option, equal to a base rate or the London InterBank Offered Rate (“LIBOR”) plus an applicable margin based upon our leverage. As of December 31, 2013, the interest rate applicable to the Fourth Amended Revolver was 1.57%. If amounts are drawn, due to the fact that the Fourth Amended Revolver bears interest at variable rates, cost approximates the fair value.

The Fourth Amended Revolver contains customary affirmative and negative covenants and contains financial covenants that, among other things, require the Trust and its subsidiaries to maintain certain minimum ratios of EBITDA (earnings before payment or charges of interest, taxes, depreciation, amortization or extraordinary items) as compared to interest expense and total fixed charges. The financial covenants also include consolidated net worth and leverage ratio tests. In addition, Trust is prohibited from making distributions in excess of 95% of funds from operations except to comply with the legal requirements to maintain its status as a REIT. As of December 31, 2013, the Trust was in compliance with all covenants of the Fourth Amended Revolver.

Mortgage and construction debt

As of December 31, 2013, the Trust had outstanding mortgage and construction indebtedness of $420.4 million (excluding unamortized debt premium of $2.3 million). Of the total, $123.7 million and $69.7 million relates to variable rate construction and mortgage debt, respectively, that is described below, and $57.3 million pertains to outstanding mortgage debt that is secured by the underlying collegiate housing properties or leaseholds bearing interest at fixed rates ranging from 4.16% to 5.60%. The remaining $227.0 million pertains to fixed rate mortgage debt, including $47.7 million related to the purchase of The Suites at Overton Park and The Centre at Overton Park collegiate housing communities (see Note 10 to the accompanying consolidated financial statements). It also includes $9.6 million of debt that is secured by an underlying collegiate housing property bearing interest at a fixed rate of 4.92% and the remaining $169.7 million pertains to the Fannie Mae master secured credit facility that the Trust entered into on December 31, 2008 and expanded on December 2, 2009 (the “Master Secured Credit Facility”), which bears interest at a weighted average fixed rate of 5.87%. The Trust was in compliance with all financial covenants, including consolidated net worth and liquidity tests, contained in the Master Secured Credit Facility as of December 31, 2013.

Master Secured Credit Facility

The Master Secured Credit Facility was entered into on December 31, 2008 and expanded on December 2, 2009. All notes under the Master Secured Credit Facility contain cross-default provisions; all properties securing the notes are cross-collateralized. The Trust was in compliance with all financial covenants, including consolidated net worth and liquidity tests, contained in the Master Secured Credit Facility as of December 31, 2013.

During 2013, the Trust prepaid a $14.6 million, five-year note under the Master Secured Credit Facility. The debt had a fixed interest rate of 5.99% and was due to mature on January 1, 2014. Two collegiate housing communities, The Avenue at Southern and Carrollton Crossing, were released from the collateral pool simultaneously with the pay-off. The mortgage debt was repaid with proceeds received from borrowings under the Fourth Amended Revolver and cash on hand.

Mortgage debt

On the maturity date of July 1, 2013, the Trust completed the refinancing of the University Towers mortgage debt. The new mortgage debt has a principal balance of $34.0 million and an initial maturity date of July 1, 2016. The loan may be extended for two 12-month periods, after an extension fee of 0.20% on the then-outstanding principal is paid, and if the debt service coverage ratio calculated as of the preceding quarter is at least 1.30 to 1.0. The interest rate per year applicable to the loan is, at the option of the Trust, equal to a prime rate plus a 0.50% margin or LIBOR plus a 2.10% margin and is interest only through July 1, 2015. The debt service coverage ratio is to be calculated quarterly on a trailing 12-month basis and is to be no less than 1.25 to 1.00, increasing to 1.30 to 1.0 commencing on September 30, 2016 and thereafter. Loan fees of $0.3 million were paid at closing. As of December 31, 2013, the interest rate applicable to the loan was 2.29%.

In December 2012, in connection with the acquisition of the Suites at Overton Park and the Centre at Overton Park collegiate housing communities, both of which are adjacent to Texas Tech University in Lubbock, Texas, the Trust assumed $25.1 million and $23.3 million of fixed rate mortgage debt, respectively. The loan for the Suites at Overton Park bears interest at 4.2% and initially matures on April 1, 2016. The loan for the Centre at Overton Park bears interest at 5.6% and initially matures on January 1, 2017. If no event of default has occurred by the initial maturity dates we have the option to extend the maturity dates one year at a base rate plus a 2.5% margin. Principal and interest are paid on a monthly basis for both loans.

As of December 31, 2013, the Trust had outstanding variable rate mortgage debt of $35.7 million that was assumed in connection with the acquisition of the GrandMarc at Westberry Place collegiate housing community located at Texas Christian University. The interest rate per year applicable to the loan is equal to a base rate plus a 4.85% margin, in total not to exceed 7.5% per year, and principal and interest are paid on a monthly basis. The loan matures on January 1, 2020. As of December 31, 2013, the interest rate applicable to the loan was 5.02%. In January 2014, this loan was prepaid in full (see Note 18 to the accompanying consolidated financial statements).

During the year ended December 31, 2012, the Trust repaid in full $27.0 million of mortgage debt secured by the collegiate housing community referred to as The Lofts located near the University of Central Florida in Orlando, Florida. The debt had a fixed interest rate of 5.59% and was due to mature in May 2014. During the year ended December 31, 2012, the Trust also repaid $10.2 million and $4.1 million on construction loans related to the development of a wholly-owned collegiate housing community near Southern Illinois University (The Reserve at Saluki Pointe-Carbondale). The loans bore interest equal to LIBOR plus 110 and 200 basis point margins, respectively, and were due to mature on June 28, 2012. The mortgage debt and construction loans were repaid with proceeds from the Third Amended Revolver and cash on hand.

During the year ended December 31, 2012, the Trust repaid in full $34.0 million of mortgage debt secured by the collegiate housing community referred to as Campus Lodge located near the University of Florida in Gainesville, Florida. The debt had a fixed interest rate of 6.97%, an effective interest rate of 5.48% and was due to mature in May 2012. The mortgage debt was repaid with cash on hand.

Construction loans

In connection with the acquisition of The Varsity serving the University of Michigan (see Note 4) during the year ended December 31, 2013, the Trust assumed a construction loan in the amount of $32.4 million. The interest rate per year applicable to the loan is equal to LIBOR plus a 2.25% margin and is interest only through August 1, 2015. As of December 31, 2013, the interest rate applicable to the loan was 2.42%. On August 1, 2015, if certain conditions for extension are met, we have the the option to extend the loan until August 1, 2017. During the extension period, if applicable, principal and interest are to be repaid on a monthly basis.

As of December 31, 2013, the Trust had borrowed $31.4 million on a construction loan related to the development of the first two phases of a wholly-owned collegiate housing community in Storrs, Connecticut (The Oaks on the Square - Phase I and II). The interest rate per year applicable to the loan is, at the option of the Trust, equal to a base rate plus a 1.25% margin or LIBOR plus a 2.25% margin and is interest only through October 30, 2015. As of December 31, 2013, the interest rate applicable to the loan was 2.42%. On October 30, 2015, if certain conditions for extension are met, we have the option to extend the loan until

October 31, 2016. On October 30, 2016, if certain conditions are met, we have the option to extend the loan until October 31, 2017. During the extension periods, if applicable, principal and interest are to be repaid on a monthly basis.

As of December 31, 2013, the Trust had borrowed $0.2 million on a construction loan related to the development of the third phase of a wholly-owned collegiate housing community in Storrs, Connecticut (The Oaks on the Square - Phase III). The interest rate per year applicable to the loan is, at the option of the Trust, equal to a base rate plus a 0.95% margin or LIBOR plus a 1.95% margin and is interest only through September 11, 2017. As of December 31, 2013, the interest rate applicable to the loan was 2.1%. On September 11, 2017, if certain conditions for extension are met, we have the option to extend the loan until September 11, 2018. On September 11, 2018, if certain conditions are met, we have the option to extend the loan until September 11, 2019. During the extension periods, if applicable, principal and interest are to be repaid on a monthly basis.

As of December 31, 2013, the Trust had borrowed $27.1 million on a construction loan related to the development of a jointly owned collegiate housing community near the University of Mississippi (The Retreat at Oxford). The Trust is the majority owner and managing member of the joint venture and began managing the community once it opened in August 2013. The interest rate per year applicable to the loan is, at the option of the Trust, equal to a base rate plus a 1.10% margin or LIBOR plus a 2.10% margin and is interest only through June 12, 2015. As of December 31, 2013, the interest rate applicable to the loan was 1.97%. Once the project is complete and a debt service coverage ratio of not less than 1.30 to 1 is maintained, the interest rate will be reduced to a base rate plus a 0.80% margin or LIBOR plus a 1.80% margin at the option of the Trust. If certain conditions for extension are met, the Trust has the option to extend the loan twice for an additional year. During the extension periods, if applicable, principal and interest are to be repaid on a monthly basis.

As of December 31, 2013, the Trust had borrowed $32.6 million on a construction loan related to the development of a jointly owned collegiate housing community near the Arizona State University - Downtown Phoenix campus (Roosevelt Point). The Trust is the majority owner and managing member of the joint venture and began managing the community once it opened in August 2013. The loan bears interest equal to LIBOR plus a 225 basis point margin and is interest only through March 20, 2015. As of December 31, 2013, the interest rate applicable to the loan was 2.44%. On March 20, 2015, if the debt service ratio is not less than 1.35 to 1 and an extension fee of 0.25% of the total outstanding principal is paid to the lender, the Trust may extend the loan until March 20, 2016. On March 20, 2016, if the debt service ratio is not less than 1.45 to 1 and an extension fee of 0.25% of the total outstanding principal is paid to the lender, the Trust can extend the loan until March 20, 2017. During the first and second extension periods, if applicable, principal and interest are to be repaid on a monthly basis.

On December 23, 2013, the Trust repaid in full $33.1 million of construction debt secured by the collegiate housing community referred to as East Edge located near the University of Alabama, in Tuscaloosa, Alabama. The construction loan bore interest equal to LIBOR plus a 240 basis point margin and was due to mature on July 1, 2014. The construction loan was repaid with proceeds from the Fourth Amended Revolver and cash on hand.

On December 23, 2013, the Trust also repaid in full $12.3 million of construction debt secured by the collegiate housing community referred to as Campus West located near Syracuse University, in Syracuse, New York. The construction loan bore interest equal to LIBOR plus a 195 basis point margin and was due to mature on December 7, 2014. The construction loan was repaid with proceeds from the Fourth Amended Revolver and cash on hand.

On September 27, 2013, the Trust repaid in full $8.4 million of construction debt secured by the collegiate housing community referred to as University Village Apartments on Colvin located near Syracuse University, in Syracuse, New York. The construction loan bore interest equal to LIBOR plus a 110 basis point margin and was due to mature on September 29, 2013. The construction loan was repaid with proceeds from the Fourth Amended Revolver and cash on hand.

Liquidity outlook and capital requirements

During the year ended December 31, 2013, we generated $77.4 million of cash from operations, received proceeds of $16.9 million from our at-the-market equity distribution program, received proceeds of $40.2 million related to the sale of two collegiate housing communities, borrowed $90.1 million on mortgage and construction loans and borrowed a net $277.9 million on the Fourth Amended Revolver. When combined with $17.0 million of existing cash, we were able to invest $17.2 million of capital into existing communities, acquire three communities for an aggregate of $109.5 million, invest $9.5 million in joint ventures, repay $97.9 million of mortgage and construction debt, invest $215.4 million in assets under development and distribute $48.0 million to our stockholders and unitholders in order to end the year with approximately $22.1 million in cash.

Our short-term liquidity needs include funds for distributions to our stockholders and unitholders, including those required to maintain our REIT status and satisfy our current annual distribution target of $0.44 per share/unit, funds for capital expenditures, funds for debt repayment and, potentially, funds for new property acquisition and development. We generally

expect to meet our short-term liquidity requirements through cash provided by operations, debt refinancing, existing cash, recycling capital through potential asset sales. We believe that these sources of capital will be sufficient to provide for our short-term capital needs. Starting in May of 2013, the valuation of REIT stocks, including EdR, started to decline and stayed suppressed through the remainder of 2013. These reduced valuations have increased our cost of capital and made access to equity markets unfavorable at the current time. We have managed our balance sheet so that all capital needs, including announced and committed development deals, are pre-funded by our balance sheet capacity. If the current conditions in the equity markets persist and we did not access the capital markets over the next two years, our debt as a percentage of gross assets at the end of 2015 would increase from the current 42.8% to approximately 47%, which is higher than we would prefer but within an acceptable range. At the same time our Interest Coverage ratios (Adjusted EBITDA (as further defined below) to interest expense) and Net Debt to EBITDA - Adjusted ratios would remain basically at current levels. Net Debt to EBITDA - Adjusted is defined as net debt (debt excluding unamortized premiums, cash, and non-producing construction debt on assets under development as of the date of the calculation) to Adjusted EBITDA (as further defined below) including proforma adjustments to reflect all acquisitions and development assets that are opened as if such had occurred at the beginning of the 12 month period being presented.

Distributions for the year ended December 31, 2013 totaled $48.5 million, or $0.42, per weighted average share/unit, compared to cash provided by operations of $77.4 million, or $0.67, per weighted average share/unit.

Based on our closing share price of $8.82 on December 31, 2013, our total enterprise value was $1.8 billion. With net debt (total debt less cash) of $755.2 million as of December 31, 2013, our debt to enterprise value was 42.5% compared to 27.4% as of December 31, 2012. With gross assets of $1.8 billion, which excludes accumulated depreciation of $204.2 million, our debt to gross assets ratio was 42.8% as of December 31, 2013 as compared to 31.7% as of December 31, 2012.

Management believes that it has strengthened the Trust’s balance sheet through the follow-on equity offerings in August of 2012 and January and November of 2011, selling 17.3 million shares, 13.2 million shares and 14.4 million shares, respectively, all inclusive of the underwriters’ overallotment option to purchase additional shares, for net proceeds of $180.9 million, $91.7 million and $124.4 million, respectively. A portion of the net proceeds was used to repay approximately $117.1 million of debt with the remaining proceeds used to fund the Trust’s current developments and acquisitions, fund future acquisitions and developments and for general corporate purposes.

On September 7, 2012, the Trust filed an automatic shelf registration statement, which permits us to issue an unlimited number of securities, including equity or debt securities, from time to time in one or more transactions, depending on market conditions and terms. As discussed in Note 2 to the accompanying consolidated financial statements, we have utilized at-the-market equity distribution programs since 2010, selling an aggregate of 12.4 million shares of common stock for net proceeds of approximately $116.3 million, including 1.6 million shares for net proceeds of approximately $17.8 million under the 2012 equity distribution program. We have used and are using the net proceeds to repay debt, fund our development pipeline, fund potential future acquisitions and for general corporate purposes. Under the 2012 distribution program, the Trust may issue and sell shares of its common stock having an aggregate offering amount of $50 million.

Acquisition, disposition and development activity

An additional source of capital, subject to appropriate market conditions, is the targeted disposition of non-strategic properties. We continually assess all of our communities, the markets in which they are located and the colleges and universities they serve, to determine if any dispositions are necessary or appropriate. The net proceeds from the sale of any asset would provide additional capital that would most likely be used to pay down debt and possibly finance acquisition/development growth or other operational needs.

In the second quarter of 2013, we completed the sale of College Grove, located in Murfreesboro, Tennessee for an aggregate sales price of $20.7 million (see Note 5 to the accompanying condensed consolidated financial statements). The net proceeds of $20.2 million were used to fund development and acquisition activity and for general working capital purposes.

In the fourth quarter of 2013, we completed the sale of The Pointe at Western collegiate housing community located in Kalamazoo, Michigan for a sales price of $21.0 million (see Note 5 to the accompanying condensed consolidated financial statements). The Trust received proceeds of $20.0 million after closing costs.

We intend to invest in additional communities only as suitable opportunities arise. We also plan to develop communities for our ownership and management. In the short term, we intend to fund any acquisitions or developments with working capital, borrowings under first mortgage property secured debt, construction loans or borrowings under our Fourth Amended Revolver. We intend to finance property acquisitions and development projects over the longer term with cash from operations, the

proceeds from potential asset sales, additional issuances of common or preferred stock, private capital in the form of joint ventures, debt financing and issuances of units in our Operating Partnership. There can be no assurance, however, that such funding will be obtained on reasonable terms, or at all, particularly in light of current capital market conditions.

In the third quarter of 2013, we completed the purchase of The Cottages at Lindberg serving Purdue University and The Retreat at State College serving Pennsylvania State University for a combined purchase price of $91.2 million. The Trust also purchased our joint venture partner's 10% noncontrolling interest in the collegiate housing community referred to as East Edge located near the University of Alabama for $6.9 million in cash. The Trust now owns 100% of the community. The Trust funded these acquisitions with proceeds from the sale of College Grove discussed above and with borrowings under the Fourth Amended Revolver (see Note 5 to the accompanying consolidated financial statements).

In the fourth quarter of 2013, we completed the purchase of the 415-bed community, The Varsity, serving the University of Michigan for $54.0 million. The Trust funded this acquisition with assumed debt of $32.4 million and proceeds from draws on the Company's Fourth Amended Revolver (see Note 4 to the accompanying consolidated financial statements).

We entered into a presale agreement at Florida International University adjacent to Florida International University, in Miami, FL. The $43.5 million acquisition is subject to completion of the project in time for fall 2014 occupancy. The purchase of the community is contingent upon on-time completion of the project.

We have eleven active development projects that we are developing for our ownership with our share of aggregate development costs of $398.3 million. As of December 31, 2013, $111.7 million of the anticipated costs had been incurred and funded.

Predevelopment expenditures

Our third-party development consulting activities have historically required us to fund predevelopment expenditures such as architectural fees, permits and deposits. Because the closing of a development project’s financing is often subject to third-party delay, we cannot always predict accurately the liquidity needs of these activities. We frequently incur these predevelopment expenditures before a financing commitment has been obtained and, accordingly, bear the risk of the loss of these predevelopment expenditures if financing cannot ultimately be arranged on acceptable terms. However, we typically obtain a guarantee of repayment of these predevelopment expenditures from the project owner, but no assurance can be given that we would be successful in collecting the amount guaranteed in the event that project financing is not obtained. When we develop projects for ownership, as opposed to our third-party development services, the Trust bears all exposure to risks and capital requirements for these developments.

Long-term liquidity requirements

Our long-term liquidity requirements consist primarily of funds necessary for scheduled debt maturities, acquisitions, developments, renovations and other non-recurring capital expenditures that are needed periodically for our communities. We expect to meet these needs through existing working capital, cash provided by operations, additional borrowings under our Fourth Amended Revolver, net proceeds from potential asset sales, the issuance of equity securities, including common or preferred stock, units in our Operating Partnership or additional debt, if market conditions permit. In January 2014, we entered into a $187.5 million unsecured term loan with five- and seven-year tranches (the "Unsecured Term Loan") (see Note 18 to the accompanying consolidated financial statements). At the same time, we entered into interest rate swap agreements to effectively fix the interest rate. We believe these sources of capital will be sufficient to provide for our long-term capital needs. Market conditions, however, may make additional capital more expensive for us. There can be no assurance that we will be able to obtain additional financing under satisfactory conditions, or at all, or that we will make any investments in additional communities. Our Fourth Amended Revolver is a material source to satisfy our long-term liquidity requirements. As such, compliance with the financial and operating debt covenants is material to our liquidity. As of December 31, 2013, we were in compliance with all covenants related to our Fourth Amended Revolver.

Capital expenditures

The historical recurring capital expenditures, excluding discontinued operations, at our wholly-owned communities are set forth as follows:



	As of and for the Years Ended December 31,
	2013		2012		2011
Total units	5,895		5,044		4,820
Total beds	18,508		16,119		15,477
Total recurring capital expenditures (in thousands)	$	4,381	$	4,105	$	3,583
Average per unit	$	743.19	$	813.78	$	743.35
Average per bed	$	236.71	$	254.65	$	231.50

Recurring capital expenditures exclude capital spending on significant renovations, community repositioning or other major periodic projects. Capital expenditures associated with newly developed communities are typically capitalized as part of their development costs. As a result, such communities typically require little to no recurring capital expenditures until their second year of operation or later.

Additionally, we are required by certain of our lenders to contribute contractual amounts annually to reserves for capital repairs and improvements at the mortgaged communities.

These contributions are typically less than, but could exceed, the amount of capital expenditures actually incurred during any given year at such communities.

Commitments

The following table summarizes our contractual obligations as of December 31, 2013 (amounts in thousands):



	Less than 1 Year		1 – 3 Years		3 – 5 Years		More than 5 Years		Total
Contractual Obligations:
Long-Term Debt Obligations ⁽¹⁾	$	13,834	$	260,689	$	42,474	$	103,393	$	420,390
Contractual Interest Obligations ⁽²⁾	16,667		24,932		10,810		2,743		55,152
Operating Lease and Future Purchase Obligations ⁽³⁾	59,365		23,626		17,153		576,492		676,636
Capital Reserve Obligations ⁽⁴⁾	1,612		2,850		2,321		632		7,415
Total	$	91,478	$	312,097	$	72,758	$	683,260	$	1,159,593


(1)	Includes required monthly principal amortization and amounts due at maturity on first mortgage debt secured by collegiate housing properties and any amounts due under the Fourth Amended Revolver and construction loan agreements.


(2)	Includes contractual fixed-rate interest payments as well as estimates of variable rate interest payments based on the variable interest rates effective as of December 31, 2013. The Trust has $193.4 million of variable rate debt as of December 31, 2013.

(3)

Includes future minimum lease commitments under operating lease obligations (includes long-term ground leases), future purchase obligations for advertising and a presale agreement that obligates the Trust to purchase a newly developed collegiate housing community adjacent to Florida International University for $43.5 million as long as the developer completes the project in time for fall 2014 occupancy.


(4)	Includes future annual contributions to the capital reserve as required by certain mortgage debt.

Long-term indebtedness

As of December 31, 2013, 27 of our communities were unencumbered by mortgage debt.

As of December 31, 2013, we had outstanding mortgage and construction indebtedness of $422.7 million (net of unamortized debt premium of $2.3 million). The scheduled future maturities of this indebtedness as of December 31, 2013 were as follows (in thousands):



Year
2014	$	13,834
2015	135,310
2016	125,378
2017	40,050
2018	2,424
Thereafter	103,394
Total	420,390
Debt premium	2,291
Outstanding as of December 31, 2013, net of debt premium	$	422,681

As of December 31, 2013, the outstanding mortgage and construction debt had a weighted average interest rate of 4.33% and carried an average term to maturity of 2.91 years.

The Trust had $356.9 million outstanding under the Fourth Amended Revolver as of December 31, 2013. The Fourth Amended Revolver, as amended, matures on January 14, 2018, and provides that the Operating Partnership may extend the maturity date one year subject to certain conditions. The Fourth Amended Revolver requires interest only payments through maturity. The interest rate per annum applicable to the Fourth Amended Revolver is, at the Operating Partnership’s option, equal to a base rate or LIBOR plus an applicable margin based upon our leverage. The interest rate applicable to the Fourth Amended Revolver as of December 31, 2013 was 1.57%.

Distributions

We are required to distribute 90% of our REIT taxable income (excluding the deduction for dividends paid and net capital gains) on an annual basis in order to qualify as a REIT for federal income tax purposes. Accordingly, we intend to make, but are not contractually bound to make, regular quarterly distributions to holders of our common stock and Operating Partnership units. All such distributions are authorized at the sole discretion of our Board. We may be required to use borrowings under our Fourth Amended Revolver, if necessary, to meet REIT distribution requirements, avoid the imposition of federal income and excise taxes and maintain our REIT status. Additionally, we may make certain distributions consisting of both cash and shares to meet REIT distribution requirements. We consider market factors and our performance in addition to REIT requirements in determining distribution levels. During July of 2012, our Board increased the annual dividend target by 43% from $0.28 to $0.40 per share/unit becoming effective with the August 15, 2012 dividend. During July of 2013, our Board increased the annual dividend target by 10% from $0.40 to $0.44 per share/unit becoming effective with the August 15, 2013 dividend.

As discussed above, our Board declared a fourth quarter distribution of $0.11 per share of common stock for the quarter ended December 31, 2013. The distribution was paid on February 14, 2014 to stockholders of record at the close of business on January 31, 2014.

Off-Balance Sheet Arrangements

The Operating Partnership serves as non-recourse, carve-out guarantor for secured third-party debt in the amount of $24.0 million, held by one unconsolidated joint venture. In addition, the Operating Partnership, with another joint venture partner, have jointly and severally guaranteed partial repayment for secured third-party construction debt held by another unconsolidated joint venture under development. This partial repayment guaranty is limited to $8.8 million. The terms of the guarantees are described in Note 16 to the accompanying consolidated financial statements.

In connection with the development agreement entered into on July 14, 2010 for a project at the Science + Technology Park at Johns Hopkins Medical Institute (see Note 2 to the accompanying consolidated financial statements) the Trust has committed to provide a guarantee of repayment of a $42.0 million third-party construction loan for a $3.0 million fee. The guarantee fee will not be recognized until the second mortgage loan is repaid, which could be as early as the first quarter of 2014, as the

construction loan and second mortgage are currently being refinanced. The project will have a $2.5 million reserve to fund any operating or debt service shortfalls that is to be replenished annually by East Baltimore Development, Inc., until a 1.10 debt service coverage ratio is achieved for twelve consecutive months. The second mortgage loan and related debt service are the first at risk if such reserve is not adequate to cover operating expenses and debt service on the construction loan.

In connection with the condominium agreement related to The Oaks on the Square project in Storrs, Connecticut (see Note 10 to the accompanying consolidated financial statements) the Operating Partnership and LeylandAlliance LLC have jointly committed to provide a guarantee of repayment of a $46.4 million construction loan to develop Phase I & II of the project and a $13.8 million construction to develop Phase III of the project. As of December 31, 2013 and 2012, $43.2 million and $1.3 million, respectively, had been drawn on the construction loans of which $11.8 million and $1.0 million, respectively, are attributable to LeylandAlliance LLC. These amounts are not included in our accompanying consolidated financial statements.

Non GAAP Measures

Funds From Operations (FFO)

As defined by the National Association of Real Estate Investment Trusts (“NAREIT”), FFO represents net income (loss) (computed in accordance with GAAP), excluding gains (or losses) from sales of property and impairment write-downs of depreciable real estate plus real estate-related depreciation and amortization and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect funds from operations on the same basis. We present FFO available to all stockholders and unitholders because we consider it to be 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. As such, we also exclude the impact of noncontrolling interests in our calculation. 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, 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, April 2002 and by the October 2011 guidance described above), 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. We believe that net income is the most directly comparable GAAP measure to FFO available to stockholders and unitholders. 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 make distributions.

The Trust also uses core funds from operations, or Core FFO, as an operating performance measure. Core FFO is defined as FFO adjusted to include the economic impact of revenue on participating projects for which recognition is deferred for GAAP purposes. The adjustment for this revenue is calculated on the same percentage of completion method used to recognize revenue on third-party development projects. Core FFO also includes adjustments to exclude the impact of straight-line adjustments for ground leases, gains/losses on extinguishment of debt, transaction costs related to acquisitions and reorganization or severance costs. We believe that these adjustments are appropriate in determining Core FFO as they are not indicative of the operating performance of the Trust’s assets. In addition, management uses Core FFO in the assessment of the Trust’s operating performance and comparison to its industry peers and believes that Core FFO is a useful supplemental measure for the investing community to use in comparing the Trust to other REITs as many REITs provide some form of adjusted or modified FFO.

The following table presents a reconciliation of FFO and Core FFO available to our stockholders and unitholders to net income (loss) for the years ended December 31, 2013, 2012 and 2011 (amounts in thousands):



	2013			2012			2011
Net income (loss) attributable to Education Realty Trust, Inc.	$	4,323		$	8,421		$	(11,014	)
Gain on sale of collegiate housing assets	(3,913		)	(5,496		)	(2,388		)
Loss on impairment of collegiate housing assets	5,001			—			7,859
Collegiate housing property depreciation and amortization on equity investees	49,316			37,237			29,101
Equity portion of real estate depreciation and amortization on equity investees	196			225			412
Equity portion of loss on sale of collegiate housing property on equity investee	—			88			256
Noncontrolling interests	249			305			244
FFO available to stockholders and unitholders	55,172			40,780			24,470
Other adjustments to FFO
Loss on extinguishment of debt	—			—			757
Acquisition costs	393			1,110			741
Straight-line adjustment for ground leases	5,255			4,364			4,208
Impact of other adjustments to FFO:	5,648			5,474			5,706
FFO on Participating Developments:
Interest on loan to Participating Development	1,825			1,830			1,598
Development fees on Participating Development, net of costs and taxes	454			91			887
FFO on Participating Developments:	2,279			1,921			2,485
Core FFO available to stockholders and unitholders	$	63,099		$	48,175		$	32,661

Net Operating Income (NOI)

We believe NOI is a useful measure of our collegiate housing operating performance. We define NOI as rental and other community-level revenues earned from our collegiate housing communities less community-level operating expenses, excluding management fees, depreciation, amortization, ground lease expense and impairment charges and including regional and other corporate costs of supporting the communities. Other REITs may use different methodologies for calculating NOI, and accordingly, the Trust's NOI may not be comparable to other REITs. We believe that this measure provides an operating perspective not immediately apparent from GAAP operating income or net income. The Trust uses NOI to evaluate performance on a community-by-community basis because it allows management to evaluate the impact that factors such as lease structure, lease rates and tenant base, which vary by property, have on the Trust’s operating results. However, NOI should only be used as an alternative measure of the Trust's financial performance.

The following is a reconciliation of our GAAP operating income to NOI for years ended December 31, 2013, 2012 and 2011 (in thousands):



	For the Year ended December 31,
	2013		2012		2011
Operating income	$	24,330	$	15,018	$	12,392
Less: Third-party development services revenue	2,989		820		4,103
Less: Third-party management services revenue	3,697		3,446		3,336
Plus: Development and management services expenses	6,477		6,266		5,506
Plus: General and administrative expenses	7,678		7,910		6,810
Plus: Ground leases	7,622		6,395		5,498
Plus: Depreciation and amortization	48,098		33,240		23,858
Plus: Loss on impairment of collegiate housing assets	—		—		—
NOI	$	87,519	$	64,563	$	46,625

Adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA)

Adjusted EBITDA is defined as net income or loss excluding: (1) straight line adjustment for ground leases; (2) acquisition costs; (3) depreciation and amortization; (4) loss on impairment of collegiate housing assets; (5) gain on sale of collegiate housing assets; (6) interest expense; (7) other non-operating expense (income); (8) income tax expense (benefit); (9) non-controlling interest; and (10) applicable expenses related to discontinued operations. We consider Adjusted EBITDA useful to an investor in evaluating and facilitating comparisons of our operating performance between periods and between REITs by removing the impact of our capital structure (primarily interest expense) and asset base (primarily depreciation and amortization) from our operating results.

The following is a reconciliation of our GAAP net income (loss) to Adjusted EBITDA for the years ended December 31, 2013, 2012 and 2011 (in thousands):



	For the Year ended December 31,
	2013			2012			2011
Net income (loss) attributable to Education Realty Trust, Inc.	$	4,323		$	8,421		$	(11,014	)
Straight line adjustment for ground leases	5,255			4,364			4,208
Acquisition costs	393			1,110			741
Depreciation and amortization	48,098			33,240			23,843
Depreciation and amortization – discontinued operations	1,767			4,634			5,712
Loss on impairment of collegiate housing assets – discontinued operations	5,001			88			7,859
Gain on sale of collegiate housing assets – discontinued operations	(3,913		)	(5,496		)	(2,388		)
Interest expense, net	17,526			14,390			17,274
Interest expense – discontinued operations	—			—			1,044
Other nonoperating expense (income)	1,311			932			1,373
Income tax expense (benefit)	203			(884		)	(95		)
Noncontrolling interest	308			216			239
Applicable expenses (income) related to discontinued operations	—			—			472
Adjusted EBITDA	$	80,272		$	61,015		$	49,268

Debt to gross assets

Debt to gross assets is defined as total debt, excluding the unamortized debt premium, divided by gross assets, or total assets excluding accumulated depreciation on real estate assets. We consider debt to gross assets useful to an investor in evaluating our leverage and in assessing our capital structure, because it excludes noncash items such as accumulated depreciation and provides a more accurate depiction of our capital structure.

The following is a reconciliation of our GAAP total assets to gross assets as of December 31, 2013 and 2012 (in thousands):



	As of December 31,
	2013			2012
Mortgage and construction loans, net of unamortized premium	$	422,681		$	398,846
Unamortized premium	2,291			3,068
Mortgage and construction loans	420,390			395,778

Unsecured revolving credit facility	356,900			79,000

Total debt	$	777,290		$	474,778

Total assets	$	1,610,565		$	1,324,687
Accumulated depreciation⁽¹⁾	204,181			175,310
Gross assets	$	1,814,746		$	1,499,997

Debt to gross assets	42.8		%	31.7		%

⁽¹⁾ Represents accumulated depreciation on real estate assets.

Inflation

Our collegiate housing leases typically do not have terms that extend beyond twelve months. Accordingly, although on a short-term basis we would be required to bear the impact of rising costs resulting from inflation, we have the opportunity to raise rental rates at least annually to offset such rising costs. However, our ability to raise rental rates may be limited by a weak

economic environment, increased competition from new collegiate housing in our primary markets and/or a reduction in student enrollment at our principal colleges and universities.

Recent Accounting Pronouncements

There were no recent accounting pronouncements adopted during the year ended December 31, 2013 that had a material impact or are expected to have a material impact on the Trust's consolidated financial statements. See Item 8 in the accompanying consolidated financial statements.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Our future income, cash flows and fair values relevant to financial instruments are dependent upon prevailing market interest rates. Market risk refers to the risk of loss from adverse changes in market prices and interest rates. The Trust’s interest rate risk objective is to limit the impact of interest rate fluctuations on earnings and cash flows and to lower its overall borrowing costs. To achieve this objective, the Trust manages its exposure to fluctuations in market interest rates for its borrowings through the use of fixed rate debt instruments to the extent that reasonably favorable rates are obtainable.

For fixed rate debt, interest rate changes affect the fair market value but do not impact net income to common stockholders or cash flows. Conversely, for floating rate debt, interest changes generally do not affect the fair market value but do impact net income to common stockholders and cash flows, assuming other factors are held constant. As of December 31, 2013, we had fixed rate debt of $227.0 million. Holding other variables constant, a 100 basis point increase in interest rates would cause a $6.9 million decline in the fair value for our fixed rate debt. Conversely, a 100 basis point decrease in interest rates would cause a $8.6 million increase in the fair value of our fixed rate debt. As of December 31, 2013, 54.0% of the outstanding principal amounts of our mortgage and construction notes payable on the properties we own have fixed interest rates with a weighted average interest rate of 5.62% and an average term to maturity of 3.25 years.

On the maturity date of July 1, 2013, the Trust completed the refinance of the University Towers mortgage debt. The new mortgage debt has a principal balance of $34.0 million and an initial maturity date of July 1, 2016. The loan may be extended for two 12-month periods, after an extension fee of 0.20% on the outstanding principal is paid, and if the debt service coverage ratio calculated as of the preceding quarter is at least 1.30 to 1.0. The interest rate per year applicable to the loan is, at the option of the Trust, equal to a prime rate plus a 0.50% margin or LIBOR plus a 2.10% margin and is interest only through July 1, 2015. The debt service coverage ratio is to be calculated quarterly on a trailing 12-month basis and is to be no less than 1.25 to 1.00, increasing to 1.30 to 1.0 commencing on September 30, 2016 and thereafter. Loan fees of $0.3 million were paid at closing. As of December 31, 2013, the interest rate applicable to the loan was 2.29%.

7.5% per year, and principal and interest are paid on a monthly basis. The loan matures on January 1, 2020. As of December 31, 2013, the interest rate applicable to the loan was 5.02%.

As of December 31, 2013, we had borrowed $123.7 million on construction loans related to the development of owned collegiate apartment communities. These loans bear interest equal to a base rate or LIBOR plus an applicable margin with $123.5 million and $0.2 million maturing in 2015 and 2017, respectively. As of December 31, 2013, the weighted average interest rate applicable to these loans was 2.32%.

Item 8. Financial Statements and Supplementary Data.

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2013 based upon the guidelines established in Internal Control — Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Our internal control over financial reporting includes policies and procedures that provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with accounting principles generally accepted in the United States of America.

Based on the results of our evaluation, our management concluded that our internal control over financial reporting was effective as of December 31, 2013. We reviewed the results of management’s assessment with our Audit Committee.

The effectiveness of our internal control over financial reporting as of December 31, 2013 has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their attestation report which appears on the following page.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Education Realty Trust, Inc.

Memphis, Tennessee

We have audited the accompanying consolidated balance sheets of Education Realty Trust, Inc. and subsidiaries (the “Trust”) as of December 31, 2013 and 2012, and the related consolidated statements of operations, changes in equity, and cash flows for each of the three years in the period ended December 31, 2013. We also have audited the Trust's internal control over financial reporting as of December 31, 2013, based on criteria established in Internal Control - Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Trust's management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying management's report on internal control over financial reporting. Our responsibility is to express an opinion on these financial statements and an opinion on the Trust's internal control over financial reporting based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company's internal control over financial reporting is a process designed by, or under the supervision of, the company's principal executive and principal financial officers, or persons performing similar functions, and effected by the company's board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Trust as of December 31, 2013 and 2012, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2013, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, the Trust maintained, in all material respects, effective internal control over financial reporting as of December 31, 2013, based on the criteria established in Internal Control - Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

/s/ DELOITTE & TOUCHE LLP

Memphis, Tennessee

March 3, 2014

CONSOLIDATED BALANCE SHEETS

As of December 31,



	2013			2012
	(Amounts in thousands, except share and per share data)
Assets:
Collegiate housing properties, net	$	1,388,885		$	1,061,002
Assets under development	116,787			159,264
Corporate office furniture, net	3,249			3,007
Cash and cash equivalents	22,073			17,039
Restricted cash	12,253			6,410
Student contracts receivable, net	807			708
Receivable from managed third parties	361			629
Notes receivable	18,125			21,000
Goodwill and other intangibles, net	3,822			4,455
Other assets	44,203			51,173
Total assets	$	1,610,565		$	1,324,687

Liabilities:
Mortgage and construction loans, net of unamortized premium	$	422,681		$	398,846
Unsecured revolving credit facility	356,900			79,000
Accounts payable	2,289			1,749
Accrued expenses	65,357			55,374
Deferred revenue	23,498			17,964
Total liabilities	870,725			552,933

Commitments and contingencies (see Note 16)	—			—

Redeemable noncontrolling interests	9,871			8,944

Equity:
Common stock, $0.01 par value, 200,000,000 shares authorized, 114,740,155 and 113,062,452 shares issued and outstanding as of December 31, 2013 and 2012, respectively	1,148			1,131
Preferred shares, $0.01 par value, 50,000,000 shares authorized, no shares issued and outstanding	—			—
Additional paid-in capital	813,540			849,878
Accumulated deficit	(88,964		)	(93,287		)
Total Education Realty Trust, Inc. stockholders’ equity	725,724			757,722
Noncontrolling interests	4,245			5,088
Total equity	729,969			762,810
Total liabilities and equity	$	1,610,565		$	1,324,687

See accompanying notes to the consolidated financial statements.

CONSOLIDATED STATEMENTS OF OPERATIONS

Years Ended December 31,



	2013			2012			2011
	(Amounts in thousands, except share and per share data)
Revenues:
Collegiate housing leasing revenue	$	167,476		$	124,087		$	91,517
Third-party development consulting services	2,989			820			4,103
Third-party management services	3,697			3,446			3,336
Operating expense reimbursements	10,214			9,593			8,604
Total revenues	184,376			137,946			107,560
Operating expenses:
Collegiate housing leasing operations	79,957			59,524			44,892
Development and management services	6,477			6,266			5,506
General and administrative	7,678			7,910			6,810
Depreciation and amortization	48,098			33,240			23,858
Ground lease expense	7,622			6,395			5,498
Reimbursable operating expenses	10,214			9,593			8,604
Total operating expenses	160,046			122,928			95,168

Operating income	24,330			15,018			12,392

Nonoperating expenses:
Interest expense	17,526			14,390			17,274
Amortization of deferred financing costs	1,758			1,215			1,197
Loss on extinguishment of debt	—			—			351
Interest income	(447		)	(283		)	(175		)
Total nonoperating expenses	18,837			15,322			18,647
Income (loss) before equity in losses of unconsolidated entities, income taxes and discontinued operations	5,493			(304		)	(6,255		)
Equity in (losses) of unconsolidated entities	(203		)	(363		)	(447		)
Income (loss) before income taxes and discontinued operations	5,290			(667		)	(6,702		)
Income tax expense (benefit)	203			(884		)	(95		)
Income (loss) from continuing operations	5,087			217			(6,607		)
Discontinued operations:
Income (loss) from operations of discontinued operations	(4,369		)	2,924			(6,556		)
Gain on sale of collegiate housing property	3,913			5,496			2,388
Income (loss) from discontinued operations	(456		)	8,420			(4,168		)
Net income (loss)	4,631			8,637			(10,775		)
Less: Net income attributable to the noncontrolling interests	308			216			239
Net income (loss) attributable to Education Realty Trust, Inc.	$	4,323		$	8,421		$	(11,014	)

See accompanying notes to the consolidated financial statements.



	2013			2012		2011
	(Amounts in thousands, except share and per share data)
Earnings (loss) per share information:
Income (loss) attributable to Education Realty Trust, Inc. common stockholders per share – basic and diluted:
Continuing operations	$	0.04		$	—	$	(0.09	)
Discontinued operations	—			0.08		(0.05		)
Net income (loss) attributable to Education Realty Trust, Inc. common stockholders per share	$	0.04		$	0.08	$	(0.14	)
Weighted average common shares outstanding – basic	114,431,996			101,243,974		75,485,418
Weighted average common shares outstanding – diluted	115,469,596			102,316,958		75,485,418
Amounts attributable to Education Realty Trust, Inc. – common stockholders:
Income (loss) from continuing operations, net of noncontrolling interests	$	4,776		$	68	$	(6,879	)
Income (loss) from discontinued operations, net of noncontrolling interests	(453		)	8,353		(4,135		)
Net income (loss)	$	4,323		$	8,421	$	(11,014	)

See accompanying notes to the consolidated financial statements.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Years Ended December 31,

(Amounts in thousands, except shares)



	Common Stock			Additional Paid-In Capital			Accumulated Deficit			Noncontrolling Interests			Total
	Shares	Amount		Additional Paid-In Capital			Accumulated Deficit			Noncontrolling Interests			Total
Balance, December 31, 2010	58,657,056	$	587	$	414,850		$	(90,694	)	$	—		$	324,743
Proceeds from issuances of common stock, net of offering costs	32,996,205	330		264,004			—			—			264,334
Common stock issued to officers and directors	44,280	—		360			—			—			360
Common stock issued to retire PIUs	—	1		—			—			—			1
Amortization of restricted stock	103,147	—		1,165			—			—			1,165
Cash dividends	—	—		(17,722		)	—			—			(17,722		)
Noncontrolling interests in joint ventures	—	—		—			—			1,487			1,487
Net income (loss)	—	—		—			(11,014		)	—			(11,014		)
Balance, December 31, 2011	91,800,688	918		662,657			(101,708		)	1,487			563,354
Common stock issued to officers and directors	32,286	—		360			—			—			360
Proceeds from issuances of common stock, net of offering costs	20,987,826	210		220,055			—			—			220,265
Amortization of restricted stock	241,652	3		765			—			—			768
Cash dividends	—	—		(33,959		)	—			—			(33,959		)
Return of equity to noncontrolling interests	—	—		—			—			(349		)	(349		)
Contributions from noncontrolling interests	—	—		—			—			4,039			4,039
Net income (loss)	—	—		—			8,421			(89		)	8,332
Balance, December 31, 2012	113,062,452	1,131		849,878			(93,287		)	5,088			762,810
Common stock issued to officers and directors	33,180	—		360			—			—			360
Proceeds from issuances of common stock, net of offering costs	1,575,713	16		16,669			—			—			16,685
Amortization of restricted stock	68,810	1		1,336			—			—			1,337
Cash dividends	—	—		(48,010		)	—			—			(48,010		)
Return of equity to noncontrolling interests	—	—		—			—			(795		)	(795		)
Contributions from noncontrolling interests	—	—		—			—			69			69
Purchase of noncontrolling interests	—	—		(6,693		)	—			(175		)	(6,868		)
Net income	—	—		—			4,323			58			4,381
Balance, December 31, 2013	114,740,155	$	1,148	$	813,540		$	(88,964	)	$	4,245		$	729,969

See accompanying notes to the consolidated financial statements.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Years Ended December 31,



	2013			2012			2011
	(Amounts in thousands)
Operating activities:
Net income (loss)	$	4,631		$	8,637		$	(10,775	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	48,098			33,240			23,858
Depreciation included in discontinued operations	1,767			4,634			5,697
Deferred tax expense (benefit)	(260		)	1,043			(197		)
Loss on disposal of assets	12			99			22
Gain on sale of collegiate housing property in discontinued operations	(3,913		)	(5,496		)	(2,388		)
Noncash rent expense related to the straight-line adjustment for long-term ground leases	5,255			4,364			4,208
Loss on impairment of collegiate housing properties included in discontinued operations	5,001			—			7,859
Loss on extinguishment of debt	—			—			351
Loss on extinguishment of debt included in discontinued operations	—			—			406
Amortization of deferred financing costs	1,758			1,215			1,197
Amortization of deferred financing costs included in discontinued operations	—			—			48
Loss on interest rate cap	—			—			5
Amortization of unamortized debt premiums	(776		)	(80		)	(390		)
Distributions of earnings from unconsolidated entities	71			195			264
Noncash compensation expense related to stock-based incentive awards	2,127			2,041			1,502
Equity in losses of unconsolidated entities	203			363			447
Change in operating assets and liabilities (net of acquisitions):
Student contracts receivable	(315		)	(19		)	(239		)
Management fees receivable	268			304			(406		)
Other assets	17,009			(9,009		)	(1,497		)
Accounts payable and accrued expenses	(8,846		)	5,721			1,451
Deferred revenue	5,317			4,142			2,614
Net cash provided by operating activities	77,407			51,394			34,037
Investing activities:
Property acquisitions, net of cash acquired	(109,482		)	(239,065		)	(156,463		)
Purchase of corporate furniture and fixtures	(787		)	(3,106		)	(173		)
Restricted cash	(5,843		)	(1,584		)	(35		)
Insurance proceeds received on property losses	16,860			3,900			—
Investment in collegiate housing properties	(17,183		)	(22,599		)	(22,129		)
Proceeds from sale of collegiate housing properties	40,256			67,261			73,821
Notes receivable	(125		)	—			—
Repayment on notes receivable	3,000			1,800			75
Loans to developments	—			(3,000		)	(8,128		)
Earnest money deposits	(125		)	(3,000		)	(75		)
Investment in assets under development	(215,409		)	(157,840		)	(46,966		)
Distributions from unconsolidated entities	—			82			285
Investments in unconsolidated entities	(9,475		)	(11,797		)	(25		)
Net cash used in investing activities	(298,313		)	(368,948		)	(159,813		)

See accompanying notes to the consolidated financial statements.



	2013			2012			2011
	(Amounts in thousands)
Financing activities:
Payment of mortgage and construction notes	(97,931		)	(79,185		)	(58,225		)
Borrowings under mortgage and construction loans	90,123			71,156			12,558
Debt issuance costs	(4,578		)	(1,026		)	(1,527		)
Debt extinguishment costs	—			—			(562		)
Borrowings on line of credit	302,033			141,000			—
Repayments of line of credit	(24,133		)	(62,000		)	(3,700		)
Proceeds from issuance of common stock	16,890			220,441			265,318
Payment of offering costs	(238		)	(805		)	(1,007		)
Purchase and return of equity to noncontrolling interests	(7,664		)	(349		)	—
Contributions from noncontrolling interests	1,197			4,039			—
Dividends and distributions paid to common and restricted stockholders	(48,010		)	(33,959		)	(17,722		)
Dividends and distributions paid to noncontrolling interests	(449		)	(532		)	(502		)
Repurchases of common stock and payments of restricted stock tax withholding	(1,300		)	—			—
Net cash provided by financing activities	225,940			258,780			194,631
Net (decrease) increase in cash and cash equivalents	5,034			(58,774		)	68,855
Cash and cash equivalents, beginning of period	17,039			75,813			6,958
Cash and cash equivalents, end of period	$	22,073		$	17,039		$	75,813
Supplemental disclosure of cash flow information:
Interest paid	$	23,060		$	18,402		$	19,526
Income taxes paid	$	542		$	76		$	339
Supplemental disclosure of noncash activities:
Redemption of redeemable noncontrolling interests from unit holder	$	—		$	606		$	—
Stock-based compensation	$	2,127		$	2,041		$	1,453
Capital expenditures in accounts payable and accrued expenses related to developments	$	15,425		$	20,028		$	7,049
Mortgage and construction loans assumed in connection with property acquisitions	$	32,420		$	48,451		$	36,930

See accompanying notes to the consolidated financial statements.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share data)

1. Organization and description of business

Education Realty Trust, Inc. (the “Trust”) was organized in the state of Maryland on July 12, 2004 and commenced operations as a real estate investment trust (“REIT”) effective with the initial public offering (the “Offering”) that was completed on January 31, 2005. Under the Trust’s Articles of Incorporation, as amended, the Trust is authorized to issue up to 200 million shares of common stock and 50 million shares of preferred stock, each having a par value of $0.01 per share.

The Trust operates primarily through a majority-owned Delaware limited partnership, Education Realty Operating Partnership, LP (the “Operating Partnership”). The Operating Partnership owns, directly or indirectly, interests in collegiate housing communities located near major universities in the United States.

The Trust also provides real estate facility management, development and other advisory services through the following subsidiaries of the Operating Partnership:


•	EDR Management Inc. (“Management Company”), a Delaware corporation performing collegiate housing management activities; and


•	EDR Development LLC (“Development Company”), a Delaware limited liability company providing development consulting services for third party collegiate housing communities.

The Trust is subject to the risks involved with the ownership and operation of residential real estate near major universities throughout the United States. The risks include, among others, those normally associated with changes in the demand for housing by students at the related universities, competition for tenants, creditworthiness of tenants, changes in tax laws, interest rate levels, the availability of financing and potential liability under environmental and other laws.

2. Summary of significant accounting policies

Basis of presentation and principles of consolidation

The accompanying consolidated financial statements have been prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States (“GAAP”). The accompanying consolidated financial statements of the Trust represent the assets and liabilities and operating results of the Trust and its majority owned subsidiaries.

The Trust, as the sole general partner of the Operating Partnership, has the responsibility and discretion in the management and control of the Operating Partnership, and the limited partners of the Operating Partnership, in such capacity, have no authority to transact business for, or participate in the management activities of the Operating Partnership. Accordingly, the Trust accounts for the Operating Partnership using the consolidation method.

All intercompany balances and transactions have been eliminated in the accompanying consolidated financial statements.

Use of estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions are used by management in determining the recognition of third-party development consulting services revenue under the percentage of completion method, useful lives of collegiate housing assets, the valuation of goodwill, the initial valuations and underlying allocations of purchase price in connection with collegiate housing property acquisitions, the determination of fair value for impairment assessments and in the recording of the allowance for doubtful accounts. Actual results could differ from those estimates.

Cash and cash equivalents

All highly-liquid investments with a maturity of three months or less when purchased are considered cash equivalents. Restricted cash is excluded from cash for the purpose of preparing the consolidated statements of cash flows. The Trust maintains cash balances in various banks. At times, the amounts of cash may exceed the amount the Federal Deposit Insurance

Corporation (“FDIC”) insures. As of December 31, 2013, the Trust had $12.0 million cash on deposit that was uninsured by the FDIC or in excess of the FDIC limits.

Restricted cash

Restricted cash includes escrow accounts held by lenders for the purpose of paying taxes, insurance, principal and interest and funding capital improvements.

Distributions

The Trust pays regular quarterly cash distributions to stockholders. These distributions are determined quarterly by the Board of Directors (“Board”) based on the operating results, economic conditions, capital expenditure requirements, the REIT annual distribution requirements of the Internal Revenue Code of 1986, as amended (the “Code”), leverage covenants imposed by our revolving credit facility and other debt documents, and any other matters the Board deems relevant. Distributions for the year ended December 31, 2013 totaled $48.5 million, or $0.42, per weighted average share/unit of which $0.24 was treated as a non-taxable return of capital and $0.18 was treated as ordinary dividend income for income tax purposes.

Notes receivable

On August 26, 2013, the Trust provided a $0.5 million promissory loan to College Park Apartments, Inc. ("CPA"), the Trust's partner in the unconsolidated joint venture University Village-Greensboro LLC (see Note 8), at an interest rate of 10% per annum and a maturity date of August 1, 2020. Under the loan, CPA can make one draw per calendar quarter and has borrowed $0.1 million as of December 31, 2013. The loan is secured by CPA's interest in the joint venture.

During the year ended December 31, 2012, the Trust entered into a mezzanine loan and purchase option agreement with Landmark Properties Holdings, LLC ("Landmark") for the purpose of developing a cottage-style collegiate housing community at Pennsylvania State University in State College, Pennsylvania. A construction loan was used to fund 80% of the development, and once completed, the community will be wholly owned by Landmark. The Trust provided $3.0 million of mezzanine financing at an interest rate of 10% per annum and was granted an option to purchase the community in 2013, 2014 or 2015. As described in Note 5, in September 2013, the Trust exercised the purchase option and acquired the collegiate housing community known as The Retreat at State College. The mezzanine loan was secured by 100% of Landmark's equity interest in this development and Landmark's equity interest in the joint venture in the collegiate housing property near The University of Mississippi campus and was repaid during closing of the acquisition. As of December 31, 2012, the mezzanine financing had a balance of $3.0 million and was recorded in notes receivable in the accompanying consolidated balance sheet.

On July 14, 2010, the Trust entered into definitive agreements for the development, financing and management of a $60.7 million, 20-story, 572-bed graduate collegiate housing complex at the Science + Technology Park at Johns Hopkins Medical Institute. The Trust developed and manages the building, which was constructed on land owned by Johns Hopkins University and leased to a subsidiary of East Baltimore Development, Inc., a nonprofit partnership of private and public entities dedicated to Baltimore’s urban revitalization. Under terms of the agreements, the Trust (a) received development and construction oversight fees and reimbursement of pre-development expenses, (b) invested in the form of an $18.0 million second mortgage, (c) will earn a $3.0 million fee for providing a repayment guarantee of the construction first mortgage and (d) received a 10-year management contract. As of December 31, 2013 and 2012, the note receivable for the second mortgage had a balance of $18.0 million and is recorded in notes receivable in the accompanying consolidated balance sheets. The Trust does not have an ownership interest in any form that would require consolidation. Due to its financing commitments to the project along with other factors, the Trust will not recognize the development services revenue, guarantee fee revenue and interest income earned on the second mortgage until the second mortgage is repaid, and the Trust no longer has a substantial continuing financial involvement. If the construction loan and second mortgage had been repaid prior to December 31, 2013, the Trust would have recognized development services revenue net of costs of $2.6 million (including participation in cost savings of $0.8 million), guarantee fee revenue of $3.0 million and interest income of $5.6 million since the commencement of the project.

Collegiate housing properties

Land, land improvements, buildings and improvements, and furniture, fixtures and equipment are recorded at cost. Buildings and improvements are depreciated over 15 to 40 years, land improvements are depreciated over 15 years and furniture, fixtures, and equipment are depreciated over 3 to 7 years. Depreciation is computed using the straight-line method for financial reporting purposes over the estimated useful life.

Acquired collegiate housing communities’ results of operations are included in the Trust’s results of operations from the respective dates of acquisition. Appraisals, estimates of cash flows and other valuation techniques are used to allocate the purchase price of acquired property between land, land improvements, buildings and improvements, furniture, fixtures and equipment and identifiable intangibles such as amounts related to in-place leases. Acquisition costs are expensed as incurred and are included in general and administrative costs in the accompanying consolidated statements of operations.

Management assesses impairment of long-lived assets to be held and used whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Management uses an estimate of future undiscounted cash flows of the related asset based on its intended use to determine whether the carrying value is recoverable. If the Trust determines that the carrying value of an asset is not recoverable, the fair value of the asset is estimated and an impairment loss is recorded to the extent the carrying value exceeds estimated fair value. Management estimates fair value using discounted cash flow models, market appraisals if available, and other market participant data.

When a collegiate housing community has met the criteria to be classified as held for sale, the fair value less cost to sell such asset is estimated. If the fair value less cost to sell the asset is less than the carrying amount of the asset, an impairment charge is recorded for the estimated loss. Depreciation expense is no longer recorded once a collegiate housing community has met the held for sale criteria. Operations of collegiate housing communities that are sold or classified as held for sale are recorded as part of discontinued operations for all periods presented. During the years ended December 31, 2013, 2012 and 2011, 12 properties were classified as part of discontinued operations in the accompanying consolidated statements of operations for all periods presented. All 12 of these properties were sold by December 31, 2013 (see Note 5).

Deferred financing costs

Deferred financing costs represent costs incurred in connection with acquiring debt facilities. The deferred financing costs incurred for years ended December 31, 2013, 2012 and 2011 were $4.6 million, $0.9 million and $1.7 million, respectively, and are being amortized over the terms of the related debt using a method that approximates the effective interest method. Amortization expense totaled $1.8 million, $1.2 million, and $1.2 million for the years ended December 31, 2013, 2012 and 2011, respectively. As of December 31, 2013 and 2012, accumulated amortization totaled $7.0 million and $5.7 million, respectively. Deferred financing costs, net of amortization, are included in other assets in the accompanying consolidated balance sheets (see Note 7).

Common stock issuances and offering costs

Specific incremental costs directly attributable to the issuance of common stock are charged against the gross proceeds of the related issuance. Accordingly, underwriting commissions and other stock issuance costs are reflected as a reduction of additional paid-in capital in the accompanying consolidated statement of changes in equity.

On August 14, 2012, the Trust completed a follow-on offering of 17.3 million shares of its common stock, which included 2.3 million shares purchased by the underwriters pursuant to an option to purchase additional shares. The Trust received approximately $180.9 million in net proceeds from the offering after deducting the underwriting discount and other offering expenses. The Trust used the net proceeds to repay the unsecured revolving credit facility (see Note 10) and to fund the acquisition of The Province at East Carolina University, The District on 5th serving the University of Arizona, Campus Village serving Michigan State University, The Province at Kent State serving Kent State University and The Suites at Overton Park and The Centre at Overton Park both serving Texas Tech University (see Note 4).

On September 20, 2011, the Trust entered into the 2011 equity distribution agreement. Pursuant to the terms and conditions of the agreements, the Trust could issue and sell shares of its common stock having an aggregate offering amount of up to $50 million. As of December 31, 2012, the Trust had sold 4.8 million shares of common stock under the 2011 equity distribution program for net proceeds of approximately $49.2 million and reached the aggregate offering amount of $50 million. On May 22, 2012, the Trust entered into two additional equity distribution agreements similar to the previous agreements discussed above. Under the 2012 agreements, the Trust could issue and sell shares of its common stock having an aggregate offering amount of $50 million. As of December 31, 2013, the Trust had sold 1.6 million shares of common stock under the 2012 agreements for net proceeds of approximately $17.8 million. The Trust used the net proceeds to repay debt, fund its development pipeline, fund acquisitions and for general corporate purposes.

On May 19, 2010, the Trust’s stockholders approved the Education Realty Trust, Inc. Employee Stock Purchase Plan (the “ESPP”) which became effective on July 1, 2010. Pursuant to the ESPP, all employees of the Trust are eligible to make periodic purchases of common stock through payroll deductions. Subject to the discretion of the compensation committee of the Board, the purchase price per share of common stock purchased by employees under the ESPP is 85% of the fair market value on the

applicable purchase date. The Trust reserved 300,000 shares of common stock for sale under the ESPP. The aggregate cost of the ESPP (generally the 15% discount on the shares purchased) is recorded by the Trust as a period expense. For the years ended December 31, 2013, 2012 and 2011, total compensation expense relating to the ESPP was $31,238, $25,345, and $24,338 respectively.

Debt premiums/discounts

Differences between the estimated fair value of debt and the principal value of debt assumed in connection with collegiate housing property acquisitions are amortized over the term of the related debt as an offset to interest expense using the effective interest method. As of December 31, 2013 and 2012, the Trust had net unamortized debt premiums of $2.3 million and $3.1 million, respectively. These amounts are included in mortgage and construction loans in the accompanying consolidated balance sheets.

Income taxes

The Trust qualifies as a REIT under the Code. The Trust is generally not subject to federal, state and local income taxes on any of its taxable income that it distributes if it distributes at least 90% of its REIT taxable income for each tax year to its stockholders and meets certain other requirements. If the Trust fails to qualify as a REIT for any taxable year, the Trust will be subject to federal, state and local income taxes (including any applicable alternative minimum tax) on its taxable income.

The Trust has elected to treat certain of its subsidiaries, including the Management Company, as taxable REIT subsidiaries (each a “TRS”). A TRS is subject to federal, state and local income taxes. The Management Company provides management services and through the Development Company, provides development services, which if directly provided by the Trust would jeopardize the Trust’s REIT status. Deferred tax assets and liabilities are recognized based on the difference between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates in effect in the years in which those temporary differences are expected to reverse.

The Trust had no unrecognized tax benefits as of December 31, 2013, 2012 and 2011. As of December 31, 2013, the Trust did not expect to record any unrecognized tax benefits. The Trust, and its subsidiaries, file federal and state income tax returns. As of December 31, 2013, open tax years generally included tax years for 2010, 2011, and 2012. The Trust’s policy is to include interest and penalties related to unrecognized tax benefits in general and administrative expenses. As of December 31, 2013, 2012 and 2011, the Trust had no interest or penalties recorded related to unrecognized tax benefits.

Noncontrolling interests

As of December 31, 2013, the Trust had entered into three joint venture agreements to develop, own and manage properties near Arizona State University - Downtown Phoenix (Roosevelt Point), The University of Mississippi (The Retreat at Oxford) and Duke University (605 West). The Trust is deemed to be the primary beneficiary of these communities; therefore, the Trust accounts for the joint ventures using the consolidation method of accounting. Our joint venture partners' investments in 605 West met the requirements to be classified outside of permanent equity and is therefore classified as redeemable noncontrolling interests in the accompanying consolidated balance sheets and net income attributable to noncontrolling interest in the accompanying consolidated statement of operations due to the partner's ability to put their ownership interests to the Trust as stipulated in the operating agreements. Our joint venture partners’ investments in the Arizona State University - Downtown Phoenix joint venture and The University of Mississippi joint ventures are accounted for as noncontrolling interests in the accompanying consolidated balance sheets and statements of changes in equity and net income attributable to noncontrolling interests in the accompanying consolidated statements of operations. On September 10, 2013, the Trust purchased our joint venture partner's 10% interest in the collegiate housing community referred to as East Edge located near the University of Alabama for $6.9 million (see Note 4).

The units of limited partnership of the Operating Partnership (“Operating Partnership Units”), units of limited partnership of University Towers Operating Partnership, LP (“University Towers Operating Partnership Units”) and profits interest units (“PIUs”) (see Note 9) are referred to as noncontrolling interests. The Trust follows the guidance issued by the Financial Accounting Standards Board (“FASB”) regarding the classification and measurement of redeemable securities. The Operating Partnership Units and the University Towers Operating Partnership Units are redeemable at the option of the holder and essentially have the same characteristics as common stock as they participate in net income and distributions. Accordingly, the Trust has determined that the Operating Partnership Units and the University Towers Operating Partnership Units meet the requirements to be classified outside of permanent equity and are therefore classified as redeemable noncontrolling interests in the accompanying consolidated balance sheets and net income attributable to noncontrolling interests in the accompanying

consolidated statements of operations. The value of redeemable noncontrolling interests is reported at the greater of fair value or historical cost at the end of each reporting period. As of December 31, 2013, the Trust reported the redeemable noncontrolling interests at historical cost, which was greater than fair value. During the year ended December 31, 2012, 43,832 Operating Partnership Units were redeemed for 43,832 shares of common stock.

The following table sets forth the activity with the redeemable noncontrolling interests for the years ended December 31, 2013 and 2012 (in thousands):



	2013			2012
Beginning balance – redeemable noncontrolling interests	$	8,944		$	9,776
Net income (loss) attributable to redeemable noncontrolling interests	249			305
Redemption of operating partnership units	—			(607		)
Contributions from redeemable noncontrolling interests	1,127			—
Distributions attributable to redeemable noncontrolling interests	(449		)	(530		)
Ending balance – redeemable noncontrolling interests	$	9,871		$	8,944

Earnings per share

Basic earnings per share is calculated by dividing net earnings available to common stock by weighted average shares of common stock outstanding. Diluted earnings per share is calculated similarly, except that it includes the dilutive effect of the assumed exercise of potentially dilutive securities. The Trust follows the authoritative guidance regarding the determination of whether certain instruments are participating securities. All unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents are included in the computation of earnings per share under the two-class method. This results in shares of unvested restricted stock being included in the computation of basic earnings per share for all periods presented.

The following table reconciles the basic and diluted weighted average shares for the years ended December 31, 2013 and 2012:



	2013	2012
Basic weighted average shares of common stock outstanding	114,431,996	101,243,974
Operating Partnership Units	830,343	865,727
University Towers Operating Partnership Units	207,257	207,257
Diluted weighted average shares of common stock outstanding	115,469,596	102,316,958

As of December 31, 2011, the following potentially dilutive securities were outstanding but were not included in the computation of diluted earnings per share because the effects of their inclusion would be anti-dilutive:



	2011
Operating Partnership Units	903,738
University Towers Operating Partnership Units	207,257
Total potentially dilutive securities	1,110,995

A reconciliation of the numerators and denominators for the basic and diluted earnings per share computation for 2011 is not presented, as the Trust reported a loss from continuing operations for the year ended December 31, 2011, and therefore the effect of the inclusion of all potentially dilutive securities would be anti-dilutive when computing diluted earnings per share; thus, the computation for both basic and diluted earnings per share is the same.

Repairs, maintenance and major improvements

The costs of ordinary repairs and maintenance are charged to operations when incurred. Major improvements that extend the life of an asset are capitalized and depreciated over the remaining useful life of the asset. Planned major repair, maintenance and improvement projects are capitalized when performed. In some circumstances, the lenders require the Trust to maintain a

reserve account for future repairs and capital expenditures. These amounts are classified as restricted cash in the accompanying consolidated balance sheets as the funds are not available for use.

Goodwill and other intangible assets

Goodwill is tested annually for impairment as of December 31, and is tested for impairment more frequently if events and circumstances indicate that the assets might be impaired. An impairment loss is recognized to the extent that the carrying amount exceeds the asset’s fair value. The accumulated impairment loss recorded by the Trust as of December 31, 2008 was $0.4 million. No additional impairment has been recorded through December 31, 2013. The carrying value of goodwill was $3.1 million as of December 31, 2013 and 2012, of which $2.1 million was recorded on the management services segment and $0.9 million was recorded on the development consulting services segment. Goodwill is not subject to amortization. Other intangible assets generally include in-place leases acquired in connection with acquisitions and are amortized over the estimated life of the lease/contract term. The carrying value of other intangible assets was $0.8 million and $1.4 million as of December 31, 2013 and 2012, respectively.

Investment in unconsolidated entities

The Operating Partnership accounts for its investments in unconsolidated joint ventures using the equity method whereby the costs of an investment are adjusted for the Trust’s share of earnings of the respective investment reduced by distributions received. The earnings and distributions of the unconsolidated joint ventures are allocated based on each owner’s respective ownership interests. These investments are classified as other assets or accrued expenses, depending on whether the distributions exceed the Trust’s contributions and share of earnings in the joint ventures, in the accompanying consolidated balance sheets (see Note 8). As of December 31, 2013, the Trust had investments in the following unconsolidated joint ventures that are accounted for under the equity method:


•	1313 5th Street MN Holdings, LLC, a Delaware limited liability company, 50% owned by the Operating Partnership;


•	West Clayton Athens GA Owner, LLC, a Delaware limited liability company, 50% owned by the Operating Partnership;


•	Elauwit Networks, a South Carolina limited liability company, 10% owned by the Operating Partnership; and


•	University Village-Greensboro LLC, a Delaware limited liability company, 25% owned by the Operating Partnership.

As of December 31, 2012, the Trust had investments in the following unconsolidated joint ventures that are accounted for under the equity method:


•	1313 5th Street MN Holdings, LLC, a Delaware limited liability company, 50% owned by the Operating Partnership;


•	Elauwit Networks, a South Carolina limited liability company, 10% owned by the Operating Partnership; and


•	University Village-Greensboro LLC, a Delaware limited liability company, 25% owned by the Operating Partnership.

Comprehensive income

The Trust follows the authoritative guidance issued by the FASB relating to the reporting and display of comprehensive income and its components. For all periods presented, comprehensive income (loss) is equal to net income (loss).

Revenue recognition

The Trust recognizes revenue related to leasing activities at the collegiate housing communities owned by the Trust, management fees related to managing third-party collegiate housing communities, development consulting fees related to the general oversight of third-party collegiate housing development and operating expense reimbursements for payroll and related expenses incurred for third-party collegiate housing communities managed by the Trust.

Collegiate housing leasing revenue — Collegiate housing leasing revenue is comprised of all activities related to leasing and operating the collegiate housing communities and includes revenues from leasing apartments by the bed, food services, parking lot rentals and providing certain ancillary services. This revenue is reflected in collegiate housing leasing revenue in the accompanying consolidated statements of operations. Students are required to execute lease contracts with payment schedules that vary from semester to monthly payments. Generally, the Trust requires each executed leasing contract to be accompanied by a signed parental guarantee. Receivables are recorded when billed. Revenues and related lease incentives and nonrefundable application and service fees are recognized on a straight-line basis over the term of the contracts. At certain collegiate housing facilities, the Trust offers parking lot rentals to the tenants. The related revenues are recognized on a straight-line basis over the term of the related agreement.

Due to the nature of the Trust’s business, accounts receivable result primarily from monthly billings of student rents. Payments are normally received within 30 days. Balances are considered past due when payment is not received on the contractual due date. Allowances for uncollectible accounts are established by management when it is determined that collection is doubtful. Such allowances are reviewed periodically based upon experience. The following table reconciles the allowance for doubtful accounts as of and for the years ended December 31, 2013, 2012 and 2011 (in thousands):



	2013			2012			2011
Balance, beginning of period	$	142		$	133		$	129
Provision for uncollectible accounts	1,379			1,128			1,079
Deductions	(1,425		)	(1,119		)	(1,075		)
Balance, end of period	$	96		$	142		$	133

Third-party development services revenue — The Trust provides development consulting services in an agency capacity with third parties whereby the fee is determined based upon the total construction costs. Total fees vary from 3 – 5% of the total estimated costs, and the Trust typically receives a portion of the fees up front. These fees, including the up-front fee, are recognized using the percentage of completion method in proportion to the contract costs incurred by the owner over the course of construction of the respective projects. Occasionally, the development consulting contracts include a provision whereby the Trust can participate in project savings resulting from successful cost management efforts. These revenues are recognized once all contractual terms have been satisfied and no future performance requirements exist. This typically occurs after construction is complete. For the years ended December 31, 2013, 2012 and 2011, there was $0.8 million, $0.2 million and $0.5 million of revenue recognized, respectively, related to cost savings agreements on development projects. For 2013 and 2012, this amount of participation in cost savings was attributable to the participating development at the Johns Hopkins Medical Institute (see Note 2).

Third-party management services revenue — The Trust enters into management contracts to manage third-party collegiate housing communities. Management revenues are recognized when earned in accordance with each management contract. Incentive management fees are recognized when the incentive criteria have been met.

Operating expense reimbursements — The Trust pays certain payroll and related costs to operate third-party collegiate housing communities that are managed by the Trust. Under the terms of the related management agreements, the third-party property owners reimburse these costs. The amounts billed to the third-party owners are recognized as revenue.

Costs related to development consulting services

Costs associated with the pursuit of third-party development consulting contracts are expensed as incurred, until such time that management has been notified of a contract award. At such time, the reimbursable costs are recorded as receivables and are reflected as other assets in the accompanying consolidated balance sheets (see Note 7).

Costs directly associated with internal development projects are capitalized as part of the cost of the project.

Advertising expense

Advertising expenses are charged to income during the period incurred. The Trust does not use direct response advertising. Advertising expense was $4.6 million, $3.2 million and $2.5 million for the years ended December 31, 2013, 2012 and 2011, respectively.

Segment information

The Trust discloses certain operating and financial data with respect to separate business activities within its enterprise. The Trust has identified three reportable business segments: collegiate housing leasing, collegiate housing development consulting services and collegiate housing management services.

Stock-based compensation

On May 4, 2011, the Trust’s stockholders approved the Education Realty Trust, Inc. 2011 Omnibus Equity Incentive Plan (the “2011 Plan”). The 2011 Plan replaced the Education Realty Trust, Inc. 2004 Incentive Plan (“2004 Plan”) in its entirety. The

2011 Plan is described more fully in Note 9. The Trust recognizes compensation costs related to share-based payments in the accompanying consolidated financial statements in accordance with authoritative guidance.

Fair value measurements

The Trust follows the guidance contained in FASB ASC 820, Fair Value Measurements and Disclosures. Fair value is generally defined as the exit price at which an asset or liability could be exchanged in a current transaction between willing unrelated parties, other than in a forced liquidation or sale. The guidance establishes a fair value hierarchy, giving the highest priority to quoted prices in active markets and the lowest priority to unobservable data, and requires disclosures for assets and liabilities measured at fair value based on their level in the hierarchy.

The fair value framework requires the categorization of assets and liabilities into three levels based upon the assumptions used to value the assets or liabilities. Level 1 provides the most reliable measure of fair value, whereas Level 3 generally requires significant management judgment. The three levels are defined as follows:


•	Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date.


•	Level 2 - Observable inputs other than those included in Level 1, for example, quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets.


•	Level 3 - Unobservable inputs reflecting management's own assumption about the inputs used in pricing the asset or liability at the measurement date.

Non-financial assets measured at fair value on a nonrecurring basis consist of real estate assets and investments in partially owned entities that have been written-down to estimated fair value when it has been determined that asset values are not recoverable. The fair values of these assets are determined using discounted cash flow models, market appraisals if available, and other market participant data. Note 6 provides details for the impairment charges recorded during the year ended December 31, 2013. Non-financial assets impaired during the year ended December 31, 2013 were disposed of during the year they were written down to estimated fair value. No non-financial assets were written down during the year ended December 31, 2012.

Financial assets and liabilities that are not measured at fair value in our consolidated financial statements include mezzanine notes receivable and debt. Estimates of the fair values of these instruments are based on our assessments of available market information and valuation methodologies, including discounted cash flow analyses. The table below summarizes the carrying amounts and fair values of these financial instruments as of December 31, 2013 and 2012.



	As of December 31, 2013
			Estimated Fair Value
(in thousands)	Carrying value		Level 1		Level 2		Level 3
Mezzanine notes receivable	$	18,125	$	—	$	19,330	$	—
Unsecured revolving credit facility	356,900		—		356,900		—
Variable rate mortgage and construction loans	193,381		—		193,381		—
Fixed rate mortgage and construction loans	227,009		—		239,162		—



	As of December 31, 2012
			Estimated Fair Value
(in thousands)	Carrying value		Level 1		Level 2		Level 3
Mezzanine notes receivable	$	21,000	$	—	$	23,772	$	—
Unsecured revolving credit facility	79,000		—		79,000		—
Variable rate mortgage and construction loans	125,436		—		125,436		—
Fixed rate mortgage and construction loans	270,342		—		290,409		—

The Trust discloses the fair value of financial instruments for which it is practicable to estimate. The Trust does not hold or issue financial instruments for trading purposes. The Trust considers the carrying amounts of cash and cash equivalents, restricted cash, student contracts receivable, accounts payable and accrued expenses to approximate fair value due to the short

maturity of these instruments. The carrying value of restricted cash approximates its fair value based on the nature of our assessment of the ability to recover these amounts. Due to the short-term nature of these investments, Level 1 and Level 2 inputs are utilized to estimate the fair value of these financial instruments.

Recent accounting pronouncements

In February 2013, the FASB updated the guidance related to Liabilities to provide guidance for the recognition, measurement and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this guidance is fixed at the reporting date. The updated guidance requires the entity to measure these obligations as the sum of the amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors and any additional amount the reporting entity expects to pay on behalf of its co-obligors. The updated guidance also requires an entity to disclose the nature and amount of the obligation as well as other information. The guidance is effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2013. The adoption is not expected to have a material impact on the Trust's consolidated financial statements.

In December 2011, the FASB updated the guidance related to Property, Plant and Equipment – Real Estate Sales to eliminate diversity in practice regarding whether in-substance real estate should be derecognized when the parent ceases to have a controlling financial interest in a subsidiary that is in-substance real estate because of a default of the subsidiary on its nonrecourse debt. The updated guidance clarifies that the accounting for such transactions is based on substance rather than form, and a reporting entity generally would not satisfy the requirements to derecognize the in-substance real estate before the legal transfer of the real estate to the lender and the extinguishment of the related nonrecourse debt. The guidance is effective for financial statements issued for fiscal years and interim periods beginning after June 15, 2012. The adoption had no material impact on the Trust’s consolidated financial statements.

3. Income taxes

Deferred income taxes result from temporary differences between the carrying amounts of assets and liabilities of the TRSs for financial reporting purposes and the amounts used for income tax purposes. Significant components of the deferred tax assets and liabilities as of December 31, 2013 and 2012, respectively, are as follows (in thousands):



	2013			2012
Deferred tax assets:
Deferred revenue	$	1,022		$	717
Accrued expenses	252			159
Straight line rent	366			69
Restricted stock amortization	85			—
Net operating loss carryforward	418			—
Total deferred tax assets	2,143			945
Deferred tax liabilities:
Depreciation and amortization	(634		)	(493		)
Restricted stock amortization	—			(63		)
Total deferred tax liabilities	(634		)	(556		)
Net deferred tax assets	$	1,509		$	389

Significant components of the income tax provision (benefit) for the years ended December 31, 2013, 2012 and 2011, respectively, are as follows (in thousands):



	2013			2012			2011
Deferred:
Federal	$	(296	)	$	895		$	(169	)
State	36			148			(28		)
Deferred expense (benefit)	(260		)	1,043			(197		)
Current:
Federal	312			(1,326		)	(199		)
State	151			(601		)	301
Current (benefit) expense	463			(1,927		)	102
Total (benefit) provision	$	203		$	(884	)	$	(95	)

TRS losses subject to tax consisted of $0.2 million, $1.9 million and $0.9 million for the years ended December 31, 2013, 2012 and 2011, respectively. The reconciliation of income tax attributable to income before noncontrolling interest computed at the U.S. statutory rate to income tax provision is as follows (in thousands):



	2013		2012			2011
Tax provision at U.S. statutory rates on TRS income subject to tax	$	15	$	(566	)	$	(293	)
State income tax, net of federal benefit	126		(312		)	319
Other	62		(6		)	(121		)
Tax provision (benefit)	$	203	$	(884	)	$	(95	)

4. Acquisition and development of real estate investments

During the year ended December 31, 2013, the Trust completed the following three collegiate housing community acquisitions:

Name

Primary University Served

Acquisition

Date

# of Beds

# of Units

Contract Price (in thousands)

The Cottages on Lindberg

Purdue University West Lafayette, Indiana

Aug 2013

745

193

$36,000

The Retreat at State College

Pennsylvania State University State College, Pennsylvania

Sept 2013

587

138

$56,189

The Varsity

University of Michigan Ann Arbor, Michigan

Dec 2013

415

181

$53,950

Combined acquisition costs for these purchases were $0.4 million and are included in general and administrative costs in the accompanying consolidated statement of operations for the year ended December 31, 2013. The Trust funded these acquisitions with assumed debt of $32.4 million and proceeds from draws on the Company's Fourth Amended Revolver (as defined below). A summary follows of the fair values of the assets acquired and the liabilities assumed as of the dates of the acquisitions (in thousands):



	The Cottages on Lindberg			The Retreat at State College			The Varsity			Total
Collegiate housing properties	$	35,704		$	55,812		$	53,630		$	145,146
Other assets	347			442			481			1,270
Current liabilities	(689		)	(405		)	(449		)	(1,543		)
Mortgage debt	—			—			(32,420		)	(32,420		)
Total net assets acquired	$	35,362		$	55,849		$	21,242		$	112,453

The difference between the collegiate housing community acquisition contract prices of $146.1 million and the total net assets acquired of $112.5 million is $1.2 million of net assets purchased or liabilities assumed and $32.4 million of assumed debt (see

Note 10) in addition to fixed assets. In the accompanying consolidated statements of cash flows, we have excluded from cash outflows for the 2013 acquisitions $3.0 million of cash paid as a deposit for The Varsity acquisition during 2012.

The amounts of the 2013 acquisitions’ revenue and net income (loss) included in the Trust’s accompanying consolidated statement of operations for the year ended December 31, 2013, and the unaudited pro forma revenue and net income (loss) of the combined entity had the acquisition date been January 1, 2012, are as follows:



	Revenue		Net income (loss)		Net income (loss) attributable to common stockholders per share - basic and diluted
	(in thousands)
Actual from date of acquisition – 12/31/13	$	3,221	$	911	$	0.01
2013 supplemental pro forma for 1/1/13 – 12/31/13⁽¹⁾	$	187,961	$	4,841	$	0.04
2012 supplemental pro forma for 1/1/12 – 12/31/12⁽¹⁾	$	139,714	$	9,229	$	0.09

(1)

Supplemental pro forma earnings for the year ended December 31, 2013 were adjusted to exclude $0.4 million of acquisition-related costs incurred in 2013. Supplemental pro forma earnings for the year ended December 31, 2012 were adjusted to include these charges. As The Retreat at State College and The Varsity opened for the 2013/2014 lease year, the supplemental pro forma revenue and net income for the periods above do not include full years of operations for these acquisitions.

During the year ended December 31, 2012, the Trust completed the following seven collegiate housing community acquisitions:



Name	Primary University Served	Acquisition Date	# of Beds	# of Units	Contract Price (in thousands)
The Reserve on Stinson (1)	University of Oklahoma Norman, Oklahoma	Jan 2012	612	204	$	22,954
The Province	East Carolina University Greenville, North Carolina	Sept 2012	728	235	$	50,000
The District on 5th	University of Arizona Tucson, Arizona	Oct 2012	764	208	$	66,442
Campus Village (2)	Michigan State University East Lansing, Michigan	Oct 2012	355	106	$	20,900
The Province	Kent State University Kent, Ohio	Nov 2012	596	246	$	45,000
The Suites at Overton Park	Texas Tech University Lubbock, Texas	Dec 2012	465	298	$	37,000
The Centre at Overton Park	Texas Tech University Lubbock, Texas	Dec 2012	400	278	$	37,000


(1)	The Operating Partnership had a 10% equity investment in the entity that previously owned The Reserve on Stinson collegiate housing community and also managed the property prior to the acquisition.


(2)	The Trust entered into a 32-year ground lease, with the option to extend the lease 20 additional years subject to certain conditions, which requires an increase in annual rent expense to be determined on predetermined adjustment dates based on the consumer price index for the life of the lease.

Combined acquisition costs for these purchases were $1.1 million and are included in general and administrative costs in the accompanying consolidated statement of operations for the year ended December 31, 2012. The Trust funded these acquisitions with assumed debt of $48.5 million and existing cash, including cash proceeds generated by the August 2012 (see Note 2) and sales of collegiate housing communities (see Note 5). A summary follows of the fair values of the assets acquired and the liabilities assumed as of the dates of the acquisitions (in thousands):



	The Province at East Carolina			The District on 5th			The Suites and Centre at Overton Park			Other			Total
Collegiate housing properties	$	49,609		$	65,997		$	76,678		$	88,129		$	280,413
Other assets	502			475			4,830			971			6,778
Current liabilities	(531		)	(545		)	(1,651		)	(1,356		)	(4,083		)
Mortgage debt	—			—			(51,625		)	—			(51,625		)
Total net assets acquired	$	49,580		$	65,927		$	28,232		$	87,744		$	231,483

The difference between the collegiate housing community acquisition contract prices of $279.3 million and the total net assets acquired of $231.5 million is $48.5 million of debt assumed in connection with the acquisition of the Suites at Overton Park and the Centre at Overton Park collegiate housing communities (see Note 4) and $0.7 million of net assets purchased or liabilities assumed in addition to fixed assets and debt.

The amounts of the 2012 acquisitions' revenue and net loss included in the Trust's accompanying consolidated statement of operations for the year ended December 31, 2012, and the unaudited pro forma revenue and net loss of the combined entity had the acquisition date been January 1, 2011, are as follows:



	Revenue		Net income (loss)			Net income (loss) attributable to common stockholders per share- basic and diluted
	(in thousands)
Actual from date of acquisition – 12/31/12	$	7,830	$	1,549		$	0.02
2012 supplemental pro forma for 1/1/12 – 12/31/12⁽¹⁾	$	150,370	$	10,568		$	0.10
2011 supplemental pro forma for 1/1/11 – 12/31/11⁽¹⁾	$	119,456	$	(12,490	)	$	(0.17	)


(1)	Supplemental pro forma earnings for the year ended December 31, 2012 were adjusted to exclude $1.1 million of acquisition-related costs incurred in 2012. Supplemental pro forma earnings for the year ended December 31, 2011 were adjusted to include these charges.

Also in 2012, the Trust purchased the land and parking garage associated with the University Towers residence hall for $7.5 million and simultaneously terminated the ground lease.

In September 2013, the Trust purchased our joint venture partner's 10% non-controlling interest in the collegiate housing community referred to as East Edge located near the University of Alabama for $6.9 million in cash. The Trust now owns 100% of the community. The Trust funded this acquisition by borrowing on the Fourth Amended Revolver and existing cash.

In March 2013, the Trust announced an agreement with Javelin 19 Investments, LLC ("Javelin 19") to develop, own and manage a new collegiate housing community near Duke University. The Trust is the majority owner and managing member of the joint venture and will manage the community once completed. As of December 31, 2013, the Trust and Javelin 19 had incurred $21.5 million in costs for the project. During the year ended December 31, 2013, the Trust capitalized interest costs of $0.3 million and capitalized internal development project costs of approximately $0.1 million. The community is expected to open in the summer of 2014. For a period of five years from the date on which the property receives its initial certificate of occupancy, Javelin 19 has the right to require the Trust to purchase Javelin 19’s 10% interest in the partnership at a price to be determined.

In July 2012, the 3949 collegiate housing community at Saint Louis University was damaged by fire. The Trust is in the process of rebuilding this community. As of December 31, 2013, the Trust had incurred $22.7 million in costs to rebuild the community. During the years ended December 31, 2013 and 2012, the Trust capitalized internal development costs of $32,152 and $1,936, respectively. The community reopened in August 2013.

In March 2012, the financing was finalized for the agreement executed in June 2011 between the Trust and Summa West, LLC to develop, own and manage a new collegiate housing community near Arizona State University-Downtown Phoenix campus (Roosevelt Point). The Trust is the majority owner and managing member of the joint venture and manages the community now that it is completed. As of December 31, 2013, the Trust and Summa West, LLC had incurred $51.1 million in costs for the project. During the years ended December 31, 2013 and 2012, capitalized interest costs of approximately $0.7 million and $0.5 million, respectively, and capitalized internal development project costs of approximately $0.1 million and $0.1 million, respectively, were incurred related to the development. The community opened in August 2013.

In January 2012, the Trust entered into a joint venture agreement with Landmark Properties to develop, own and manage a new cottage-style collegiate housing community near the University of Mississippi campus (The Retreat at Oxford). The Trust is the majority owner and managing member of the joint venture and manages the community since its completion. As of December 31, 2013, the Trust and Landmark Properties had incurred $36.0 million in costs for the project. During the years ended December 31, 2013 and 2012, capitalized interest costs of approximately $0.4 million and $0.3 million, respectively, and capitalized internal development project costs of approximately $49,196 and $0.1 million, respectively, were incurred related to the development. The community opened in August 2013.

In December 2011, the Trust was selected by the University of Kentucky to develop, own and manage new collegiate housing on its campus. This project will be financed through the Trust’s On-Campus Equity Plan, or the ONE Plan ^SM. As of December 31, 2013, the Trust had incurred $106.8 million in costs for the 2013, 2014, 2015, and 2016 deliveries. Phase I opened in August 2013, Phase II is expected to open in the summer of 2014, Phase II-B is expected to open in the summer of 2015, and the 2016 deliveries are expected to open in the summer of 2016. During the years ended December 31, 2013 and 2012, the Trust capitalized interest costs of $1.5 million and $0.2 million, respectively, and internal development costs of $0.7 million and $0.3 million, respectively, related to the development.

In November 2011, the Trust purchased a collegiate housing community near the University of Colorado, Boulder (The Lotus). The Trust is developing additional housing on the existing land, which is expected to open in the summer of 2014. As of December 31, 2013, the Trust had incurred $7.9 million in project costs. During the years ended December 31, 2013 and 2012, the Trust capitalized interest costs of $0.1 million and $13,800, respectively, and internal development project costs of $0.1 million and $22,878, respectively, related to the development.

In July 2010, the University of Texas Board of Regents selected the Trust to be the ground tenant to develop, own and manage a new high-rise collegiate housing community near the core of the University of Texas at Austin campus (2400 Nueces). As of December 31, 2013, the Trust had incurred $70.0 million in costs for the project, which opened in August 2013. During the years ended December 31, 2013 and 2012, the Trust capitalized interest costs of $1.2 million and $0.9 million, respectively, and internal development project costs of $0.3 million and $0.2 million, respectively, related to the development.

In September of 2010, LeylandAlliance LLC and the Trust entered into an agreement to develop the first two phases of Storrs Center, a mixed-use town center project, adjacent to the University of Connecticut. The Trust developed, owns and manages the collegiate housing communities in these first two phases and both phases will include commercial and residential offerings.

The first phase opened in August 2012 and the second phase opened in August 2013. LeylandAlliance LLC and the Trust subsequently entered into an additional agreement to develop the third phase of the project. The third phase is scheduled to be completed in the summer of 2014. As of December 31, 2013, the Trust had incurred $29.3 million in project costs for the second phase and $6.0 million for the third phase. During the years ended December 31, 2013 and 2012, the Trust capitalized interest costs of $0.6 million and $0.8 million, respectively, and internal development project costs of $0.1 million and $0.1 million, respectively, related to the development.

All costs related to the development of collegiate housing communities are classified as assets under development in the accompanying consolidated balance sheets until the community is completed and opened. The Trust has expenditures for assets under development accrued in accounts payable and accrued expenses of $0.4 million and $15.0 million, respectively, as of December 31, 2013. As of December 31, 2012, the Trust had expenditures for assets under development accrued in accounts payable and accrued expenses of $0.7 million and $19.3 million, respectively.

5. Disposition of real estate investments and discontinued operations

On December 19, 2013, the Trust sold The Pointe at Western collegiate housing community located in Kalamazoo, Michigan for a sales price of $21.0 million. The Trust received proceeds of $20.0 million after closing costs.

On June 19, 2013, the Trust sold the College Grove collegiate housing community located in Murfreesboro, Tennessee for a price of $20.7 million. The Trust received proceeds of $20.2 million after prorations and closing costs.

In 2012, the Trust sold The Reserve at Star Pass and NorthPointe, both located in Tucson, Arizona, and The Reserve on Frankford, located in Lubbock, Texas, for an aggregate sales price of $69.5 million, resulting in net proceeds of approximately $67.3 million after prorations and closing costs.

In 2011, the Trust sold the Collegiate Village, located in Macon, Georgia, and Clayton Place, located in Morrow, Georgia, respectively, for an aggregate sales price of $28.0 million resulting in net proceeds of approximately $27.8 million after prorations and closing costs.

On January 19, 2011, the Trust sold the following five properties:

•Troy Place, serving Troy University in Troy, Alabama;

•The Reserve at Jacksonville, serving Jacksonville State University in Jacksonville, Alabama;

•The Reserve at Martin, serving University of Tennessee at Martin in Martin, Tennessee;

•The Chase at Murray, serving Murray State University in Murray, Kentucky; and

•Clemson Place, serving Clemson University in Clemson, South Carolina.

The sales price was $46.1 million, and the Trust received net proceeds of approximately $29.7 million after the repayment of related debt of $16.1 million, prorations and other closing costs.

Accordingly, the results of operations of all twelve properties are included in discontinued operations in the accompanying consolidated statements of operations for all periods presented. The Trust ceased depreciation on the properties when they met the held for sale criteria.

The following table summarizes the income (loss) from discontinued operations, net of noncontrolling interests, and the related realized gains on sales of real estate from discontinued operations, net of noncontrolling interests, for the years ended December 31, 2013, 2012 and 2011 (in thousands):



	2013			2012			2011
Collegiate housing leasing revenue	$	5,409		$	16,229		$	18,603
Other leasing revenue	—			—			414
Collegiate housing leasing operating expenses	(3,014		)	(8,671		)	(10,518		)
Depreciation and amortization	(1,767		)	(4,634		)	(5,697		)
Loss on impairment	(5,001		)	—			(7,859		)
Interest expense	—			—			(1,045		)
Amortization of deferred financing costs	—			—			(48		)
Loss on extinguishment of debt	—			—			(406		)
Interest income	4			—			—
Noncontrolling interests	31			(25		)	63
Income (loss) from discontinued operations attributable to Education Realty Trust, Inc.	$	(4,338	)	$	2,899		$	(6,493	)
Gain on sale of collegiate housing property	$	3,913		$	5,496		$	2,388
Noncontrolling interests	(28		)	(42		)	(30		)
Gain on sale of collegiate housing property attributable to Education Realty Trust, Inc.	$	3,885		$	5,454		$	2,358

6. Collegiate housing properties and assets under development

Collegiate housing properties consist of the following as of December 31, 2013 and 2012, respectively (in thousands):



	2013			2012
Land	$	126,273		$	115,818
Land improvements	73,618			71,580
Leasehold improvements	74			—
Construction in progress	115,372			208,142
Buildings	1,322,892			943,279
Furniture, fixtures and equipment	71,624			56,757
	1,709,853			1,395,576
Less accumulated depreciation	(204,181		)	(175,310		)
Collegiate housing properties and assets under development, net	$	1,505,672		$	1,220,266

Following is certain information related to investment in collegiate housing properties as of December 31, 2013 (amounts in thousands):



			Initial Cost									Total Costs
Property⁽⁴⁾	Encumbrances		Land		Buildings and Improvements		Total		Cost Capitalized Subsequently			Land		Buildings and Improvements		Total		Accumulated Depreciation⁽⁵⁾		Date of Acquisition/ Construction
College Station at W. Lafayette ⁽²⁾	$	18,327	$	1,887	$	19,528	$	21,415	$	3,257		$	1,887	$	22,785	$	24,672	$	7,904	1/31/2005
Players Club	—		727		7,498		8,225		2,151			727		9,649		10,376		3,036		1/31/2005
The Commons at Knoxville ⁽¹⁾	20,396		4,630		18,386		23,016		2,907			4,586		21,293		25,879		7,174		1/31/2005
The Commons on Kinnear ⁽⁷⁾	12,556		1,327		20,803		22,130		2,403			1,327		23,206		24,533		6,984		1/31/2005
The Lofts	—		2,801		34,117		36,918		2,341			2,801		36,458		39,259		10,462		1/31/2005
The Pointe at Penn State ⁽²⁾	26,872		2,151		35,094		37,245		4,485			2,151		39,579		41,730		12,236		1/31/2005
The Pointe at South Florida	—		3,508		30,510		34,018		6,014			3,508		36,524		40,032		11,873		1/31/2005
The Reserve at Athens	7,239		1,740		17,985		19,725		1,841			1,740		19,826		21,566		5,779		1/31/2005
The Reserve at Columbia ⁽¹⁾	14,054		1,071		26,134		27,205		4,133			1,071		30,267		31,338		9,351		1/31/2005
The Reserve at Tallahassee	—		2,743		21,176		23,919		5,276			2,743		26,452		29,195		8,350		1/31/2005
The Reserve on Perkins ^{(1) (7)}	11,971		913		15,795		16,708		3,627			913		19,422		20,335		6,656		1/31/2005
The Reserve on West 31st	—		1,896		14,920		16,816		5,718			1,896		20,638		22,534		6,813		1/31/2005
University Towers	34,000		—		28,652		28,652		16,692			2,364		42,980		45,344		12,603		1/31/2005
Campus Creek	—		2,251		21,604		23,855		2,741			2,251		24,345		26,596		7,835		2/22/2005
Pointe West	9,594		2,318		10,924		13,242		1,508			2,318		12,432		14,750		4,260		3/17/2005
Campus Lodge	—		2,746		44,415		47,161		2,520			2,746		46,935		49,681		13,471		6/7/2005
The Reserve on South College ⁽³⁾	7,961		1,744		10,784		12,528		3,523			1,744		14,307		16,051		5,182		7/6/2005
Cape Trails ⁽³⁾	7,233		445		11,207		11,652		2,022			445		13,229		13,674		3,457		1/1/2006
Carrollton Place	—		682		12,166		12,848		1,621			682		13,787		14,469		3,577		1/1/2006
River Place ⁽³⁾	6,859		837		17,746		18,583		2,309			837		20,055		20,892		5,290		1/1/2006
The Avenue at Southern	—		2,028		10,675		12,703		4,047			2,028		14,722		16,750		4,939		6/15/2006
The Reserve at Saluki Pointe ⁽⁶⁾	—		1,099		32,377		33,476		1,487			1,099		33,864		34,963		5,821		8/1/2008
University Apartments on Colvin	—		—		25,792		25,792		(95		)	—		25,697		25,697		3,935		8/1/2009



			Initial Cost								Total Costs
Property⁽⁴⁾	Encumbrances		Land		Buildings and Improvements		Total		Cost Capitalized Subsequently		Land		Buildings and Improvements		Total		Accumulated Depreciation⁽⁵⁾		Date of Acquisition/ Construction
2400 Nueces	—		—		7,436		7,436		62,533		—		69,969		69,969		1,107		8/1/2010
The Oaks on the Square - Phase I and II⁽⁸⁾	31,351		1,800		15,189		16,989		34,399		1,800		49,588		51,388		1,108		9/30/2010
GrandMarc at the Corner	—		—		45,384		45,384		1,252		—		46,636		46,636		4,772		10/22/2010
Campus West	—		—		6,127		6,127		21,182		—		27,309		27,309		1,621		3/1/2011
East Edge	—		10,420		10,783		21,203		20,964		10,420		31,747		42,167		1,983		3/1/2011
Jefferson Commons	—		1,420		4,915		6,335		166		1,420		5,081		6,501		461		3/15/2011
Wertland Square	—		3,230		13,285		16,515		574		3,230		13,859		17,089		1,238		3/15/2011
The Berk	—		2,687		13,718		16,405		663		2,687		14,381		17,068		1,317		5/23/2011
Roosevelt Point	32,576		3,093		1,716		4,809		46,805		3,093		48,521		51,614		721		7/1/2011
University Village Towers	—		3,434		34,424		37,858		122		3,434		34,546		37,980		2,357		9/22/2011
Irish Row ⁽¹⁾	13,886		2,637		24,679		27,316		232		2,637		24,911		27,548		1,690		11/1/2011
The Lotus	—		5,245		2,192		7,437		6,424		5,245		8,616		13,861		58		11/14/2011
GrandMarc at Westberry Place	35,697		—		53,935		53,935		1,020		—		54,955		54,955		3,478		12/8/2011
3949	—		3,822		24,448		28,270		8,569		3,822		33,017		36,839		1,202		12/21/2011
The Reserve on Stinson ⁽²⁾	22,344		2,111		20,609		22,720		800		2,111		21,409		23,520		1,648		1/27/2012
Central Hall I & II	—		—		—		—		25,401		—		25,401		25,401		478		6/1/2012
The Retreat at Oxford	27,100		4,743		—		4,743		31,240		4,743		31,240		35,983		476		6/14/2012
605 West	—		4,794		—		4,794		16,663		4,794		16,663		21,457		—		9/1/2012
The Province	—		4,436		45,173		49,609		53		4,436		45,226		49,662		2,068		9/21/2012
The District on 5th	—		2,601		63,396		65,997		113		2,601		63,509		66,110		3,031		10/4/2012
Campus Village	—		2,650		18,077		20,727		634		2,650		18,711		21,361		1,098		10/19/2012
Champions Court I	—		—		—		—		26,749		—		26,749		26,749		—		11/1/2012
Champions Court II	—		—		—		—		13,561		—		13,561		13,561		—		11/1/2012
The Province at Kent State	—		4,239		40,441		44,680		33		4,239		40,474		44,713		1,681		11/16/2012
The Centre at Overton Park	23,024		3,781		35,232		39,013		559		3,781		35,791		39,572		1,204		12/7/2012
The Suites at Overton Park	24,695		4,384		33,281		37,665		353		4,384		33,634		38,018		1,356		12/7/2012
Haggin Hall I	—		—		—		—		8,614		—		8,614		8,614		—		11/1/2012
Woodland Glen I & II	—		—		—		—		22,933		—		22,933		22,933		—		11/1/2012
The Oaks on the Square - Phase III	235		1,531		—		1,531		4,431		1,531		4,431		5,962		—		2/13/2013
Woodland Glen III, IV & V	—		—		—		—		9,475		—		9,475		9,475		—		5/1/2013
The Cottages on Lindberg	—		1,800		—		1,800		33,964		1,800		33,964		35,764		459		8/28/2013
The Retreat at State College	—		6,251		—		6,251		49,570		6,251		49,570		55,821		581		9/11/2013
The Varsity	32,420		3,300		50,330		53,630		130		3,300		50,460		53,760		—		12/19/2013
Limestone Park I & II	—		—		—		—		177		—		177		177		—		12/31/2013
Totals	$	420,390	$	123,953	$	1,053,058	$	1,177,011	$	532,886	$	126,273	$	1,583,580	$	1,709,853	$	204,181


(1)	The Commons at Knoxville, The Reserve at Columbia, The Reserve at Perkins and Irish Row are cross-collateralized against the $56.5 million outstanding loan discussed in Note 10.


(2)	The Pointe at Penn State, The Reserve on Stinson and College Station at West Lafayette are cross-collateralized against the $67.5 million outstanding loan discussed in Note 10.


(3)	The Reserve on South College, River Pointe and Cape Trails are cross-collateralized against the $22.1 million outstanding loan discussed in Note 10.

(4)

All properties are of garden-style collegiate housing communities except for University Towers which is a traditional residence hall, 2400 Nueces and The Varsity, which are high-rise buildings, The Retreat at Oxford and The Retreat at State College, which are cottage-style communities, and The Oaks on the Square, which will be a mixed-use town center and main street development project located in Storrs, Connecticut.


(5)	Assets have useful lives ranging from 3 to 40 years.


(6)	The first phase of The Reserve at Saluki Pointe, which included 528 beds, was completed in August 2008. The second phase, which included 240 beds, was completed in August 2009.


(7)	The Commons on Kinnear and The Reserve at Perkins are cross-collateralized against the $16.4 million outstanding loan discussed in Note 10.

(8) The first phase of The Oaks on the Square, which included 253 beds, was completed in August 2012. The second phase, which included 250 beds, was completed in August

2013.

The following table reconciles the historical cost of the Trust’s investment in collegiate housing properties for the years ended December 31, 2013, 2012 and 2011 (in thousands):



	2013			2012			2011
Balance, beginning of period	$	1,395,576		$	1,026,503		$	855,151
Collegiate housing acquisitions or completed developments	290,881			353,966			192,178
Collegiate housing dispositions	(55,880		)	(104,117		)	(90,072		)
Impairment loss	(5,001		)	—			(7,859		)
Additions	84,404			120,058			77,474
Disposals	(127		)	(834		)	(369		)
Balance, end of period	$	1,709,853		$	1,395,576		$	1,026,503

The following table reconciles the accumulated depreciation of the Trust’s investment in collegiate housing properties for the years ended December 31, 2013, 2012 and 2011 (in thousands):



	2013			2012			2011
Balance, beginning of period	$	175,310		$	166,336		$	156,358
Depreciation	47,693			35,708			28,568
Disposals	(115		)	(771		)	(347		)
Collegiate housing dispositions	(18,707		)	(25,963		)	(18,243		)
Balance, end of period	$	204,181		$	175,310		$	166,336

When the Trust determines that an asset is not recoverable, management estimates fair value using discounted cash flow models, market appraisals if available, and other market participant data. There were no impairment losses in 2012. During 2013 and 2011, management determined that the carrying value of various collegiate housing communities may not be recoverable due to the potential sale of these assets. The fair value of these properties was estimated and management recorded an impairment loss of $5.0 million and $7.9 million, respectively. As the related properties were subsequently sold, the impairment loss is recorded in discontinued operations in the accompanying consolidated statements of operations.

7. Corporate office furniture and other assets

As of December 31, 2013 and 2012, the Trust had corporate office furniture with a historical cost of $5.8 million and $5.0 million, and accumulated depreciation of $2.5 million and $2.0 million, respectively. Depreciation is computed using the straight-line method for financial reporting purposes over the estimated useful lives of the related assets, generally 3 to 7 years. Depreciation expense totaled $0.6 million, $0.6 million and $0.5 million for the years ended December 31, 2013, 2012 and 2011, respectively.

Other assets consisted of the following as of December 31, 2013 and 2012 (in thousands):



	2013		2012
Accounts receivable related to pre-development costs	$	2,222	$	3,464
Receivable for construction loan guarantee (see Note 2)	3,000		3,000
Prepaid expenses	1,244		824
Deferred tax asset	2,143		945
Deferred financing costs	6,192		3,373
Investments in unconsolidated entities	21,175		11,796
Deposit	—		3,000
Insurance proceeds receivable (see Note 16)	—		14,665
Other	8,227		10,106
Total other assets	$	44,203	$	51,173

8. Investments in unconsolidated entities

As of December 31, 2013 and 2012, the Trust had investments in unconsolidated entities (see Note 2). The Trust participates in major operating decisions of, but does not control, these entities; therefore, the equity method is used to account for these investments.

The following is a summary of financial information for the Trust’s unconsolidated joint ventures (in thousands):



Financial Position: As of December 31,	2013		2012
Total assets	$	95,380	$	42,942
Total liabilities	58,025		25,394
Equity	$	37,355	$	17,548
Trust’s investment in unconsolidated entities	$	21,175	$	11,796



Results of Operations: For the years ended December 31,	2013			2012			2011
Revenues	$	22,829		$	3,847		$	9,748
Net loss	(1,824		)	(4,013		)	(3,951		)
Trust’s equity in losses of unconsolidated entities	$	(203	)	$	(363	)	$	(447	)

As of December 31, 2013 and 2012, the Trust had $1.7 million and $1.5 million, respectively, in liabilities related to investments in unconsolidated entities where distributions exceeded contributions and equity in earnings and the Trust has historically provided financial support; therefore, these investments are classified in accrued expenses in the accompanying consolidated balance sheets (see Note 2).

In 2012, the Trust invested in a collegiate housing development with GEM Realty Capital to jointly develop and own new off-campus collegiate housing. The Trust is a 50% owner and will manage the community once the development is completed. In

2013, the Trust invested in a second collegiate housing development with GEM Realty Capital to jointly develop and own new off-campus collegiate housing. The Trust is a 50% owner and will manage the community once the development is completed.

Also in 2012, the Trust purchased a 10% interest in Elauwit Networks, a provider of Internet access, high definition video and telephone service, in order to secure reliable and advanced technology services for its owned and third-party managed collegiate housing communities. The Trust accounts for this investment under the equity method.

During the year ended December 31, 2012, the Trust purchased the majority of the assets from the WEDR Stinson Investors V, LLC joint venture for $22.9 million (see Note 4). The Trust recognized $0.1 million as its portion of the loss on the investment as part of equity in losses of unconsolidated entities in the consolidated statement of operations and recorded its share of the proceeds from the sale of $45,000 as a distribution in the accompanying consolidated financial statements.

During the year ended December 31, 2011, the Trust purchased the majority of the assets from the WEDR Riverside Investors V, LLC joint venture for $38.1 million (see Note 4). During the year ended December 31, 2011, the Trust recognized $0.3 million as its portion of the losses on the investments as part of equity in losses of unconsolidated entities in the accompanying consolidated statement of operations and recorded its share of the proceeds from the sales of $0.2 million as distributions in the accompanying consolidated financial statements.

9. Incentive plans

On May 4, 2011, the Trust’s stockholders approved the Education Realty Trust, Inc. 2011 Omnibus Equity Incentive Plan (the “2011 Plan”). The purpose of the 2011 Plan is to promote the interests of the Trust and its stockholders by attracting, motivating and retaining talented executive officers, employees and directors of the Trust and linking their compensation to the long-term interests of the Trust and its stockholders. The 2011 Plan replaced the Education Realty Trust, Inc. 2004 Incentive Plan (“2004 Plan”) in its entirety and authorizes the grant of the 315,000 shares that remained available for grant under the 2004 plan, as well as 3,147,500 additional shares. As of December 31, 2013, the Trust had 3,033,098 shares of its common stock reserved for issuance pursuant to the 2011 Plan. Automatic increases in the number of shares available for issuance are not provided. The 2011 Plan provides for the grant of stock options, restricted stock, restricted stock units (“RSUs”), stock appreciation rights, other stock-based incentive awards to employees, directors and other key persons providing services to the Trust.

A restricted stock award is an award of the Trust’s common stock that is subject to restrictions on transferability and other restrictions as the Trust’s compensation committee determines in its sole discretion on the date of grant. The restrictions may lapse over a specified period of employment or the satisfaction of pre-established criteria as the compensation committee may determine. Except to the extent restricted under the award agreement, a participant awarded restricted stock will have all of the rights of a stockholder as to those shares, including, without limitation, the right to vote and the right to receive dividends or distributions on the shares. Restricted stock is generally taxed at the time of vesting. As of December 31, 2013 and 2012, unearned compensation related to restricted stock totaled $0.8 million and $1.0 million, respectively, and will be recorded as expense over the applicable vesting period. The value is determined based on the market value of the Trust’s common stock on the grant date. During the years ended December 31, 2013, 2012 and 2011, compensation expense of $0.9 million, $0.9 million and $0.7 million, respectively, was recognized in the accompanying consolidated statements of operations, related to the vesting of restricted stock. Effective January 1, 2013 and January 1, 2012, the Trust adopted the 2013 Long-Term Incentive Plan (the "2013 LTIP") and the 2012 Long-Term Incentive Plan (the "2012 LTIP"), respectively. The purpose of the 2013 LTIP and 2012 LTIP is to attract, retain and motivate the executive officers and certain key employees of the Trust to promote the long-term growth and profitability of the Trust. On January 1, 2013 and 2012, the Trust issued 65,791 and 70,595, respectively, of time vested restricted stock to executives and key employees under the 2013 LTIP and 2012 LTIP. The restricted stock granted under the 2013 LTIP and the 2012 LTIP will vest ratably over three years as long as the participants remain employed by the Trust.

An RSU award is an award that will vest based upon the Trust’s achievement of total stockholder returns at specified levels as compared to the average total stockholder returns of a peer group of companies and/or the National Association of Real Estate Investment Trusts Equity Index over three years (the “Performance Period”). At the end of the Performance Period, the compensation committee of the Board will determine the level and the extent to which the performance goal was achieved. RSUs that satisfy the performance goal will be converted into fully-vested shares of the Trust’s common stock and the Trust will receive a tax deduction for the compensation expense at the time of vesting. Prior to vesting, the participants are not eligible to vote or receive dividends or distributions on the RSUs. On January 1, 2013, the Trust granted 122,180 performance vested RSUs to executives and key employees under the 2013 LTIP described above. On January 1, 2012, the Trust granted a

total of $1.1 million of performance vesting RSUs that are denominated in cash and will convert to common stock at the end of the performance period to executives and key employees under the 2012 LTIP described above. The number of shares of common stock to be issued will be determined on the date of vesting based on the performance level achieved and the price per share of our common stock. As of December 31, 2013 and 2012, unearned compensation related to RSUs totaled $0.9 million and $0.8 million, respectively, and will be recorded as expense over the applicable vesting period. The value was determined using a Monte Carlo simulation technique. During the years ended December 31, 2013, 2012 and 2011, compensation expense of $0.8 million, $0.7 million and $0.5 million, respectively, was recognized in the accompanying consolidated statements of operations, related to the vesting of RSUs. On December 31, 2012, 198,750 of fully-vested shares of common stock were issued pursuant to the vesting of RSUs granted in 2010.

Total stock-based compensation recognized in general and administrative expense in the accompanying consolidated statements of operations for the years ended December 31, 2013, 2012 and 2011 was $2.1 million, $2.0 million and $1.5 million, respectively. Additionally during the years ended December 31, 2013 and 2012, the Trust issued 33,180 and 32,287 shares, respectively, to its independent directors under the 2011 Plan discussed above.

A summary of the stock-based incentive plan activity as of and for the years ended December 31, 2013, 2012 and 2011 is as follows:



	Restricted Stock Awards		Weighted-Average Grant Date Fair Value Per Restricted Stock Award		RSU Awards				Weighted-Average Grant Date Fair Value Per RSU
Outstanding as of December 31, 2010⁽¹⁾	210,000		$	5.62	204,000				$	5.17
Granted	138,000		7.77		207,000				6.01
Vested	(59,146	)	7.87		—				—
Surrendered	(7,020	)	9.58		—				—
Outstanding as of December 31, 2011⁽¹⁾	281,834		6.63		411,000				5.59
Granted	70,595		10.14		—		⁽²	⁾	—
Vested	(77,366	)	10.18		(140,802	)			10.64
Surrendered	(27,969	)	10.21		(63,198	)			10.64
Outstanding as of December 31, 2012⁽¹⁾	247,094		7.63		207,000				6.01
Granted	65,791		10.64		183,275				7.65
Vested	(91,020	)	10.54		—				—
Surrendered	(37,842	)	10.54		—				—
Outstanding as of December 31, 2013⁽¹⁾	184,023		$	8.96	390,275				$	6.78


(1)	Represents unvested shares of restricted stock awards as of the date indicated.

(2) On January 1, 2012, the Trust granted a total of $1.1 million of performance vesting RSUs that are denominated in cash and will convert to common stock at the end of the performance period to executives and key employees under the 2012 LTIP.

10. Debt

Revolving credit facility

On January 14, 2013, the Operating Partnership entered into a Fourth Amended and Restated Credit Agreement. The Fourth Amended and Restated Credit Agreement amended and restated the existing revolving credit facility dated September 21, 2011. The previous facility (the “Third Amended Revolver”) was a secured facility with a maximum availability of $175 million and was scheduled to mature on September 21, 2014. The Fourth Amended Revolver is unsecured, has a maximum availability of $375 million and, within the first four years of the agreement, may be expanded to $500 million upon satisfaction of certain conditions.

certain conditions. The initial maturity date of the facility is January 14, 2018, provided that the Operating Partnership may extend the maturity date for one year subject to certain conditions.

Availability under the Fourth Amended Revolver, as amended, is limited to a “borrowing base availability” equal to the lesser of (i) 60% of the property asset value (as defined in the agreement) and (ii) the loan amount, which would produce a debt service coverage ratio of no less than 1.40. As of December 31, 2013, our borrowing base availability was $500.0 million, and we had $356.9 million outstanding under the Fourth Amended Revolver; thus, our remaining borrowing base availability was $143.1 million.

The Fourth Amended Revolver contains customary affirmative and negative covenants and contains financial covenants that, among other things, require the Trust and its subsidiaries to maintain certain minimum ratios of EBITDA (earnings before payment or charges of interest, taxes, depreciation, amortization or extraordinary items) as compared to interest expense and total fixed charges. The financial covenants also include consolidated net worth and leverage ratio tests, and the Trust is prohibited from making distributions in excess of 95% of funds from operations except to comply with the legal requirements to maintain its status as a REIT. As of December 31, 2013, the Trust was in compliance with all covenants of the Fourth Amended Revolver.

Mortgage and construction debt

As of December 31, 2013, the Trust had mortgage and construction notes payable consisting of the following, which were secured by the underlying collegiate housing properties or leasehold interests:



Property	Outstanding as of December 31, 2013			Interest Rate			Maturity Date	Amortization
	(in thousands)

Irish Row/The Reserve at Perkins/The Reserve at Columbia/ The Commons at Knoxville⁽²⁾	$	56,450		6.02	%		1/1/2019	30 Year
The Reserve at Athens⁽²⁾	7,239			4.96	%		1/1/2015	30 Year
The Suites at Overton Park	24,695			4.16	%		4/1/2016	30 Year
The Centre at Overton Park	23,024			5.60	%		1/1/2017	30 Year
College Station at W. Lafayette/The Pointe at Penn State/The Reserve on Stinson⁽²⁾	67,543			6.02	%		1/1/2016	30 Year
Pointe West	9,594			4.92	%		8/1/2014	30 Year
The Commons on Kinnear/The Reserve at Perkins⁽²⁾	16,413			5.45	%		1/1/2017	30 Year
River Pointe/Cape Trails/The Reserve on South College⁽²⁾	22,053			5.67	%		1/1/2020	30 Year
The Varsity	32,420			2.42	%	⁽³⁾	8/1/2015	(1)
The Oaks on the Square - Phase I and II	31,351			2.42	%	⁽³⁾	10/30/2015	(1)
The Oaks on the Square - Phase III	235			2.11	%	⁽³⁾	9/11/2017	(1)
Roosevelt Point	32,576			2.44	%	⁽³⁾	3/20/2015	(1)
The Retreat at Oxford	27,100			1.97	%	⁽³⁾	6/12/2015	(1)
University Towers	34,000			2.29	%	⁽³⁾	7/1/2016	30 Year
GrandMarc at Westberry Place	35,697			5.02	%	⁽³⁾	1/1/2020	30 Year
Total debt / weighted average rate	420,390			4.33	%
Unamortized premium	2,291
Total net of unamortized premium	422,681
Less current portion	(13,834		)
Total long-term debt, net of current portion	$	408,847

(1) Represents construction debt that is interest only through the maturity date. See the footnotes below regarding the applicable extension periods.

(2) Represents loans under the Master Secured Credit Facility as defined below.

(3) Represents variable rate debt.

Master Secured Credit Facility

The Trust has a credit facility with Fannie Mae (the "Master Secured Credit Facility") that was entered into on December 31, 2008 and expanded on December 2, 2009. All notes under the Master Secured Credit Facility contain cross-default provisions; all properties securing the notes are cross-collateralized. The Trust was in compliance with all financial covenants, including consolidated net worth and liquidity tests, contained in the Master Secured Credit Facility as of December 31, 2013.

During 2013, the Trust prepaid a $14.6 million, five-year note under the Master Secured Credit Facility. The debt had a fixed interest rate of 5.99% and was due to mature on January 1, 2014. Two collegiate housing communities, The Avenue at Southern and Carrollton Crossing, were released from the collateral pool simultaneous with the pay-off. The mortgage debt was repaid with proceeds received from borrowings under the Fourth Amended Revolver and cash on hand.

Mortgage debt

for two 12-month periods, after an extension fee of 0.20% on the outstanding principal is paid, and if the debt service coverage ratio calculated as of the preceding quarter is at least 1.30 to 1.00. The interest rate per year applicable to the loan is, at the option of the Trust, equal to a prime rate plus a 0.50% margin or LIBOR plus a 2.10% margin and is interest only through July 1, 2015. The debt service coverage ratio is calculated quarterly on a trailing 12-month basis and must be no less than 1.25 to 1.00, increasing to 1.30 to 1.00 commencing on September 30, 2016 and thereafter. Loan fees of $0.3 million were paid at closing. As of December 31, 2013, the interest rate applicable to the loan was 2.29%.

In December 2012, in connection with the acquisition of the Suites at Overton Park and the Centre at Overton Park collegiate housing communities, both adjacent to Texas Tech University in Lubbock, Texas, the Trust assumed $25.1 million and $23.3 million of fixed rate mortgage debt, respectively. The loan for the Suites at Overton Park bears interest at 4.2% and initially matures on April 1, 2016. The loan for the Centre at Overton Park bears interest at 5.6% and initially matures on January 1, 2017. If no event of default has occurred by the initial maturity dates we have the option to extend the maturity dates one year at a base rate plus a 2.5% margin. Principal and interest are paid on a monthly basis for both loans.

During the year ended December 31, 2012, the Trust repaid in full $27.0 million of mortgage debt secured by the collegiate housing community referred to as The Lofts located near the University of Central Florida in Orlando, Florida. The debt had a fixed interest rate of 5.59% and was scheduled to mature in May 2014. The Trust also repaid $10.2 million and $4.1 million on construction loans related to the development of a wholly-owned collegiate housing community near Southern Illinois University (The Reserve at Saluki Pointe-Carbondale). The loans bore interest equal to LIBOR plus 110 and 200 basis point margins, respectively, and were scheduled to mature on June 28, 2012. The mortgage debt and construction loans were repaid with proceeds from the Third Amended Revolver and available cash.

During the year ended December 31, 2012, the Trust repaid in full $34.0 million of mortgage debt secured by the collegiate housing community referred to as Campus Lodge located near the University of Florida in Gainesville, Florida. The debt had a fixed interest rate of 6.97%, an effective interest rate of 5.48% and was scheduled to mature in May 2012. The mortgage debt was repaid with available cash.

Construction loans

As of December 31, 2013, the Trust had borrowed $27.1 million on a construction loan related to the development of a jointly owned collegiate housing community near the University of Mississippi (The Retreat at Oxford). The Trust is the majority owner and managing member of the joint venture and will manage the community when completed. The interest rate per year applicable to the loan is, at the option of the Trust, equal to a base rate plus a 1.10% margin or LIBOR plus a 2.10% margin and is interest only through June 12, 2015. As of December 31, 2013, the interest rate applicable to the loan was 1.97%. Once the project is complete and a debt service coverage ratio of not less than 1.30 to 1 is maintained, the interest rate will be reduced to a base rate plus a 0.80% margin or LIBOR plus a 1.80% margin at the option of the Trust. If certain conditions for extension are met, the Trust has the option to extend the loan twice for an additional year. During the extension periods, if applicable, principal and interest are to be repaid on a monthly basis.

As of December 31, 2013, the Trust had borrowed $32.6 million on a construction loan related to the development of a jointly owned collegiate housing community near the Arizona State University - Downtown Phoenix campus (Roosevelt Point). The Trust is the majority owner and managing member of the joint venture and will manage the community when completed. The loan bears interest equal to LIBOR plus a 225 basis point margin and is interest only through March 20, 2015. As of December 31, 2013, the interest rate applicable to the loan was 2.44%. On March 20, 2015, if the debt service ratio is not less than 1.35 to 1 and an extension fee of 0.25% of the total outstanding principal is paid to the lender, the Trust may extend the loan until March 20, 2016. On March 20, 2016, if the debt service ratio is not less than 1.45 to 1 and an extension fee of 0.25% of the total outstanding principal is paid to the lender, the Trust can extend the loan until March 20, 2017. During the first and second extension periods, if applicable, principal and interest are to be repaid on a monthly basis.

On December 23, 2013, the Trust repaid in full $33.1 million of construction debt secured by the collegiate housing community referred to as East Edge located near the University of Alabama, in Tuscaloosa, Alabama. The construction loan bore interest equal to LIBOR plus a 240 basis point margin and was scheduled to mature on July 1, 2014. The construction loan was repaid with proceeds from the Fourth Amended Revolver and available cash.

On December 23, 2013, the Trust also repaid in full $12.3 million of construction debt secured by the collegiate housing community referred to as Campus West located near Syracuse University, in Syracuse, New York. The construction loan bore interest equal to LIBOR plus a 195 basis point margin and was scheduled to mature on December 7, 2014. The construction loan was repaid with proceeds from the Fourth Amended Revolver and available cash.

On September 27, 2013, the Trust repaid in full $8.4 million of construction debt secured by the collegiate housing community referred to as University Village Apartments on Colvin located near Syracuse University, in Syracuse, New York. The construction loan bore interest equal to LIBOR plus a 110 basis point margin and was scheduled to mature on September 29, 2013. The construction loan was repaid with proceeds from the Fourth Amended Revolver and available cash.

As of December 31, 2012, the Trust had mortgage and construction notes payable consisting of the following which were secured by the underlying collegiate housing properties or leaseholds of:



Property	Outstanding as of at December 31, 2012			Interest Rate			Maturity Date	Amortization
	(in thousands)
University Towers	$	25,000		5.99	%	⁽³⁾	7/1/2013	30 Year
The Avenue at Southern/The Reserve at Columbia/ The Commons at Knoxville/College Grove⁽²⁾	57,320			6.02	%		1/1/2019	30 Year
The Reserve at Athens⁽²⁾	7,366			4.96	%		1/1/2015	30 Year
The Reserve at Perkins⁽²⁾	14,731			5.99	%		1/1/2014	30 Year
The Suites at Overton Park	25,118			4.16	%		4/1/2016	30 Year
The Centre at Overton Park	23,333			5.60	%		1/1/2017	30 Year
College Station at W. Lafayette/The Pointe at Penn State/The Reserve on Stinson⁽²⁾	68,585			6.02	%		1/1/2016	30 Year
Pointe West	9,824			4.92	%		8/1/2014	30 Year
University Village Apartments on Colvin	8,527			1.31	%	⁽³⁾	9/29/2013	30 Year
Carrollton Crossing/The Commons on Kinnear⁽²⁾	16,676			5.45	%		1/1/2017	30 Year
River Pointe/Cape Trails/The Reserve on South College(2)	22,390			5.67	%		1/1/2020	30 Year
The Oaks on the Square - Phase I and II	16,435			2.46	%	⁽³⁾	10/30/2015	(1)
Campus West	11,960			2.16	%	⁽³⁾	11/30/2014	(1)
East Edge	32,672			2.61	%	⁽³⁾	6/30/2014	(1)
ASU Phoenix	8,869			2.50	%	⁽³⁾	3/20/2015	(1)
The Retreat	10,639			2.31	%	⁽³⁾	7/1/2015	(1)
GrandMarc at Westberry Place	36,333			4.95	%	⁽³⁾	1/1/2020	30 Year
Total debt /weighted average rate	395,778			4.86	%
Unamortized premium	3,068
Total net of unamortized premium	398,846
Less current portion	(37,919		)
Total long-term debt, net of current portion	$	360,927


(1)	Represents construction debt that is interest only through the maturity date. See the footnotes above regarding the applicable extension periods.


(2)	Represents loans under the Master Secured Credit Facility as defined above.


(3)	Represents variable rate mortgage debt or construction loans.

The following table reconciles the carrying amount of mortgage and construction notes payable as of and for the years ended December 31, 2013 and 2012 (in thousands):



	2013			2012
Balance, beginning of period	$	398,846		$	358,504
Additions	122,543			119,607
Repayments of principal	(97,931		)	(79,185		)
Amortization of premium	(777		)	(80		)
Balance, end of period	$	422,681		$	398,846

The scheduled maturities of outstanding mortgage and construction indebtedness as of December 31, 2013 are as follows (in thousands):



Year
2014	$	13,834
2015	135,310
2016	125,378
2017	40,050
2018	2,424
Thereafter	103,394
Total	420,390
Debt premium	2,291
Outstanding as of December 31, 2013, net of debt premium	$	422,681

As of December 31, 2013, the outstanding mortgage and construction debt had a weighted average interest rate of 4.33% and carried a weighted average term of 2.91 years.

11. Segments

The Trust defines business segments by their distinct customer base and service provided. The Trust has identified three reportable segments: collegiate housing leasing, development consulting services and management services. Management evaluates each segment’s performance based on net operating income, which is defined as income before depreciation, amortization, ground leases, impairment losses, interest expense (income), gains (losses) on extinguishment of debt, equity in earnings of unconsolidated entities and noncontrolling interests. The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies. Intercompany fees are reflected at the contractually stipulated amounts. Discontinued operations are not included in segment reporting as management addresses these items on a corporate level. The following tables represent the Trust’s segment information for the years ended December 31, 2013, 2012 and 2011 (amounts in thousands):



		Year Ended December 31,
		2013			2012			2011
Collegiate Housing Leasing:
	Collegiate housing leasing revenue	$	167,476		$	124,087		$	91,517
	Student housing leasing operations	79,957			59,524			44,892
	Net operating income	$	87,519		$	64,563		$	46,625
	Total segment assets at end of period ⁽¹⁾	$	1,536,699		$	1,257,476		$	879,199

Development Consulting Services:
	Third-party development consulting services	$	3,759		$	1,018		$	5,682
	General and administrative	4,027			3,528			2,998
	Net operating income (loss)	$	(268	)	$	(2,510	)	$	2,684
	Total segment assets at end of period	$	5,187		$	5,695		$	3,007

Management Services:
	Third-party management services	$	3,697		$	3,446		$	3,336
	General and administrative	2,450			2,779			2,667
	Net operating income	$	1,247		$	667		$	669
	Total segment assets at end of period	$	10,135		$	10,218		$	5,399

Reconciliations:
	Segment revenue	$	174,932		$	128,551		$	100,535
	Operating expense reimbursements	10,214			9,593			8,604
	Eliminations / adjustments	(770		)	(198		)	(1,579		)
	Total segment revenues	$	184,376		$	137,946		$	107,560

	Segment operating expenses	$	86,434		$	65,831		$	50,557
	Reimbursable operating expenses	10,214			9,593			8,604
	Eliminations / adjustments	—			(44		)	(75		)
	Total segment operating expenses	$	96,648		$	75,380		$	59,086

	Segment net operating income	$	87,728		$	62,566		$	48,474
	Other unallocated general and administrative expenses	(7,678		)	(7,913		)	(6,726		)
	Depreciation and amortization	(48,098		)	(33,240		)	(23,858		)
	Ground lease	(7,622		)	(6,395		)	(5,498		)
	Nonoperating expenses	(18,837		)	(15,322		)	(18,647		)
	Equity in earnings (losses) of unconsolidated entities	(203		)	(363		)	(447		)
	Income (loss) before income taxes and discontinued operations	$	5,290		$	(667	)	$	(6,702	)

	Total segment assets, end of period ⁽²⁾	$	1,552,021		$	1,273,389		$	887,605
	Unallocated corporate amounts:
	Cash	10,729			8,436			66,469



Notes receivable (see Note 2)	18,125		21,000		18,000
Other receivables	1,456		—		—
Investments in unconsolidated entities (see Note 8)	20,602		11,796		29
Deposit	—		3,000		—
Other assets	4,293		6,017		3,993
Deferred financing costs, net	3,339		1,049		1,713
Total assets, end of period	$	1,610,565	$	1,324,687	$	977,809

⁽¹⁾ The increase in segment assets related to collegiate housing leasing during the year ended December 31, 2013 is primarily related to the purchase of three additional communities and the continued development of fourteen collegiate housing communities for the Trust’s ownership offset by the sale of two collegiate housing communities (see Note 5). The increase in segment assets related to collegiate housing leasing during the year ended December 31, 2012 is primarily related to the purchase of seven additional communities and the continued development of eleven collegiate housing communities for the Trust's ownership offset by the sale of three collegiate housing communities (see Note 5).
⁽²⁾ Total segment assets include goodwill of $2,149 related to management services and $921 related to development consulting services.

12. Related party transactions

The Trust incurs certain common costs on behalf of Allen & O’Hara, Inc. (“A&O”), which is 100% owned by the chairman of the Board of the Trust. These costs relate to human resources, information technology, legal services and certain management personnel. Prior to January 1, 2012, the Trust allocated the costs to A&O based on time and effort expended. Indirect costs were allocated monthly in an amount that approximates what management believes costs would have been had A&O operated on a stand-alone basis. For the year ended December 31, 2011, the Trust incurred common costs on behalf of A&O in the amount of $0.1 million. For the years ended December 31, 2013 and 2012, the Trust charged fees of $32,000 and $54,000, respectively, for the services provided. Beginning in 2013 and continuing through 2014, these shared services are being phased out. By December 31, 2014, EdR will cease to provide services to A&O’s hotel properties operations.

Prior to December 2012, the Trust engaged A&O to procure furniture, fixtures and equipment from third party vendors for its owned and managed properties and for third-party owners in connection with its development consulting projects. The Trust incurred a service fee in connection with this arrangement and the expense totaled $0.2 million for each of the years ended December 31, 2012 and 2011. Beginning in December 2012, the Trust no longer engaged A&O to perform these services.

13. Lease commitments and unconditional purchase obligations

The Trust has various long-term ground lease agreements with terms ranging from 40 to 99 years. Some of these agreements contain an annual increase to rent expense equal to the greater of 3% or the increase in the consumer price index. Additionally, the Trust leases corporate office space and the agreement contains rent escalation clauses based on pre-determined annual rate increases. The Trust recognizes rent expense under the straight-line method over the terms of the leases. Any difference between the straight-line rent amounts and amounts payable under the leases’ terms are recorded as deferred rent in accrued expenses in the accompanying consolidated balance sheets. As of December 31, 2013 and 2012, deferred rent totaled $15.9 million and $10.5 million, respectively.

The Trust has various operating leases for furniture, office and technology equipment which expire at varying times through fiscal year 2023. Rental expense under the operating lease agreements totaled $0.7 million, $0.8 million and $0.6 million for the years ended December 31, 2013, 2012 and 2011. Furthermore, the Trust has entered into various contracts for advertising which will expire at varying times through fiscal year 2014.

Future minimum rental payments required under operating leases that have initial or remaining noncancellable lease terms as well as future minimum payments required under advertising contracts that have noncancellable terms in excess of one year as of December 31, 2013 are as follows (in thousands):



Year Ending	Advertising		Leases
2014	$	245	$	59,120
2015	—		12,934
2016	—		10,692
2017	—		8,675
2018	—		8,478
Thereafter	—		576,492

14. Employee savings plan

The Trust’s eligible employees may participate in a 401(k) savings plan (the “Plan”). Participants may contribute up to 15% of their earnings to the Plan. Employees are eligible to participate in the Plan on the first day of the next calendar quarter following six months of service and reaching 21 years of age. Additionally a matching contribution of 50% is provided on eligible employees’ contributions up to the first 3% of compensation. Employees vest in the matching contribution over their first 3 years of employment then immediately vest in the matching contribution from then on. Matching contributions were approximately $0.2 million for each of the years ended December 31, 2013, 2012 and 2011.

15. Accrued expenses

Accrued expenses consist of the following as of December 31, 2013 and 2012 (in thousands):



	2013		2012
Payroll	$	3,176	$	2,070
Real estate taxes	6,848		5,421
Interest	2,060		1,780
Utilities	1,203		1,111
Ground leases (including straight-line rent)	15,012		9,554
Construction loan guarantee	3,000		3,000
Assets under development	15,034		19,312
Deferred revenue related to insurance proceeds (See Note 16)	5,998		3,860
Other	13,026		9,266
Total accrued expenses	$	65,357	$	55,374

16. Commitments and contingencies

In April 2013, the Trust entered into a presale agreement with a private developer that obligates the Trust to purchase a newly developed collegiate housing community adjacent to Florida International University for $43.5 million as long as the developer completes the project in time for fall 2014 occupancy.

In July 2012, the Trust's 3949 community located in St. Louis, Missouri was partially destroyed by a fire. The community was rebuilt and fully reopened in August 2013. This fire caused substantial business interruption and property damage, both of which are covered under the Trust's existing insurance policies. Management anticipates that the ultimate proceeds received from insurance will exceed the book value of the property destroyed, and accordingly a gain on insurance settlement will be recorded in a future period. For the years ended December 31, 2013 and 2012, the Trust recognized business interruption proceeds of $1.7 million and $1.2 million, respectively. These amounts are included in collegiate housing leasing revenues in the accompanying consolidated financial statements. Management anticipates that the remaining gain will be recognized during 2014, once all contingencies have been resolved and the amount of the gain is determinable.

The Operating Partnership entered into a letter of credit agreement in conjunction with the closing of the acquisition of a collegiate housing community at the University of Florida. The mortgage debt on this community was repaid on during the year ended December 31, 2012 (see Note 10), and the $1.5 million letter of credit is no longer outstanding.

The Operating Partnership serves as non-recourse, carve-out guarantor, for secured third party debt in the amount of $24.0 million, held by one unconsolidated joint venture. The Operating Partnership is liable to the lender for any loss, damage, cost, expense, liability, claim or other obligation incurred by the lender arising out of or in connection with certain non-recourse exceptions in connection with the debt. Pursuant to the respective operating agreement, the joint venture partner agreed to indemnify, defend and hold harmless the Trust with respect to such obligations, except to the extent such obligations were caused by the willful misconduct, gross negligence, fraud or bad faith of the Operating Partnership or its employees, agents or affiliates. Therefore, exposure under the guarantee for obligations not caused by the willful misconduct, gross negligence, fraud or bad faith of the Operating Partnership or its employees, agents or affiliates is not expected to exceed the Operating Partnership’s proportionate interest in the related mortgage debt of $6.0 million.

The Operating Partnership, along with the joint venture partner, have jointly and severally guaranteed partial repayment for secured third-party construction debt held by one unconsolidated joint venture under development. The partial repayment guaranty is limited to $8.8 million. In addition, the Operating Partnership serves as a non-recourse, carve-out guarantor for the secured third-party debt and is liable to the lender for any loss, damage, cost, expense, liability, claim or other obligation incurred by the lender arising out of or in connection with certain non-recourse exceptions in connection with the debt. Pursuant to the respective operating agreement, the joint venture partner agreed to indemnify, defend and hold harmless the Trust with respect to such obligations, except to the extent such obligations were caused by the willful misconduct, gross negligence, fraud or bad faith of the Operating Partnership or its employees, agents or affiliates. Therefore, exposure under the

guaranties for obligations not caused by the willful misconduct, gross negligence, fraud or bad faith of the Operating Partnership or its employees, agents or affiliates are not expected to exceed the Operating Partnership's proportionate interest in the related mortgage debt in the case of the non-recourse, carve-out guaranty, or in the Operating Partnership's proportionate interest in the partial repayment guaranty of $8.8 million. As of December 31, 2013, the joint venture had drawn $13.1 million on the construction loans.

In connection with the development agreement entered into on July 14, 2010 for a project at the Science + Technology Park at Johns Hopkins Medical Institute (see Note 2), the Trust has committed to provide a guarantee of repayment of a $42.0 million third-party construction loan for a $3.0 million fee, of which the carrying value approximates fair value. The guarantee fee will not be recognized until the second mortgage loan is repaid. The project will have a $2.5 million reserve to fund any operating or debt service shortfalls that are to be replenished annually by East Baltimore Development, Inc., until a 1.10 debt service coverage ratio is achieved for twelve consecutive months. The second mortgage loan and related debt service are the first at risk if such reserve is not adequate to cover operating expenses and debt service on the construction loan.

In connection with the condominium agreement related to The Oaks on the Square project in Storrs, Connecticut (see Note 4) the Operating Partnership and LeylandAlliance LLC have jointly committed to provide a guarantee of repayment of a $46.4 million construction loan to develop the residential and retail portions of the first two phases of the project. As of December 31, 2013 and 2012, $43.2 million and $22.7 million, respectively, had been drawn on the construction loan of which $11.8 million and $6.3 million, respectively, is attributable to LeylandAlliance LLC; these amounts are not included in our accompanying consolidated financial statements. During August, 2013, the Operating Partnership and LeylandAlliance LLC entered into a $13.8 million construction loan for the third phase of the project. Similar to the construction loan for the first and second phases, the Operating Partnership and LeylandAlliance LLC have jointly committed to provide a guarantee of repayment for the construction loan. As of December 31, 2013, $1.3 million had been drawn on the construction loan, of which $1.0 million, is attributable to LeylandAlliance LLC; these amounts are not included in our accompanying consolidated financial statements.

As owners and operators of real estate, environmental laws impose ongoing compliance requirements on the Trust. The Trust is not aware of any environmental matters or liabilities with respect to the collegiate housing communities that would have a material adverse effect on the Trust’s consolidated financial condition or results of operations.

In the normal course of business, the Trust is subject to claims, lawsuits and legal proceedings. While it is not possible to ascertain the ultimate outcome of such matters, in management’s opinion, the liabilities, if any, are not expected to have a material effect on our financial position, results of operations or liquidity.

Under the terms of the limited partnership agreement of University Towers Operating Partnership, LP, so long as the contributing owners of such property hold at least 25% of the University Towers Partnership Units, the Trust has agreed to maintain certain minimum amounts of debt on the property to avoid triggering gain to the contributing owners. If the Trust fails to do this, the Trust must repay the contributing owners the amount of taxes they incur.

After being awarded a development consulting contract, the Trust will enter into predevelopment consulting contracts with educational institutions to develop collegiate housing communities on their behalf. The Trust will enter into reimbursement agreements that provide for the Trust to be reimbursed for the predevelopment costs incurred prior to the institution’s governing body formally approving the final development contract. As of December 31, 2013 and 2012, the Trust had reimbursable predevelopment costs of $1.6 million and $3.5 million, respectively, which are reflected in other assets in the accompanying consolidated balance sheets.

17. Quarterly financial information (unaudited)

Quarterly financial information for the years ended December 31, 2013 and 2012 is summarized below (in thousands, except per share data):



2013	1st Quarter			2nd Quarter			3rd Quarter			4th Quarter			Total
Revenues	$	44,671		$	41,038		$	43,469		$	55,198		$	184,376
Operating expenses	37,558			37,344			42,718			42,426			160,046
Nonoperating expenses	4,355			4,141			4,878			5,463			18,837
Equity in losses of unconsolidated entities	(20		)	(21		)	(61		)	(101		)	(203		)
Income taxes expense/(benefit)	(237		)	—			(32		)	472			203
Noncontrolling interests	169			(143		)	(20		)	302			308
Discontinued operations⁽¹⁾	503			4,157			(326		)	(4,790		)	(456		)
Net income (loss) attributable to Education Realty Trust, Inc.	$	3,309		$	3,832		$	(4,462	)	$	1,644		$	4,323
Net income (loss) per share-basic and diluted	$	0.03		$	0.03		$	(0.04	)	$	0.02		$	0.04



2012	1st Quarter			2nd Quarter			3rd Quarter			4th Quarter			Total
Revenues	$	33,233		$	31,473		$	32,041		$	41,199		$	137,946
Operating expenses	27,568			28,169			34,040			33,151			122,928
Nonoperating expenses	4,438			3,729			3,533			3,622			15,322
Equity in losses of unconsolidated entities⁽²⁾	(263		)	(38		)	(39		)	(23		)	(363		)
Income taxes expense/(benefit)	(75		)	(404		)	(638		)	233			(884		)
Noncontrolling interests	226			(80		)	(119		)	189			216
Discontinued operations⁽¹⁾	1,075			1,235			5,303			807			8,420
Net income attributable to Education Realty Trust, Inc.	$	1,888		$	1,256		$	489		$	4,788		$	8,421
Net income per share-basic and diluted	$	0.02		$	0.01		$	—		$	0.04		$	0.08


(1)	All quarterly information presented above for 2013 and 2012 reflects the classification of the properties sold during 2013 and 2012 in discontinued operations (see Note 5). Discontinued operations for the 4th quarter of 2013 includes an impairment loss of $5,001.


(2)	Equity in losses for the 1st quarter of 2012 includes the Trust’s $88 share of the loss on the sale of assets.

18. Subsequent events

Our Board declared a fourth quarter distribution of $0.11 per share of common stock for the quarter ended on December 31, 2013. The distribution was paid on February 14, 2014 to stockholders of record at the close of business on January 31, 2014.

On January 13, 2014, the Operating Partnership and certain of its subsidiaries (together with the Operating Partnership, the “Borrowers”), each of which is an indirectly owned subsidiary of the Company, entered into the Credit Agreement. The Credit Agreement provides for unsecured term loans in the initial aggregate principal amount of $187.5 million, consisting of a $122.5 million Tranche A term loan with a seven-year maturity (the “Tranche A Term Loan”) and a $65.0 million Tranche B term loan with a five-year maturity (the “Tranche B Term Loan” and, together with the Tranche A Term Loan, the “Term Loans”). The Credit Agreement contains an accordion feature pursuant to which the Borrowers may request that the total aggregate amount of the Term Loan be increased to $250.0 million, which may be allocated to Tranche A or Tranche B, subject to certain conditions, including obtaining commitments from any one or more lenders to provide such additional commitments. The

Company used proceeds from the Term Loan to repay a portion of the outstanding balance under the Fourth Amended Revolver.

The interest rate per annum on the Tranche A Term Loan is, at the Borrowers’ option, equal to a base rate or LIBOR plus an applicable margin ranging from 155 to 225 basis points, depending upon the Company’s leverage. The interest rate per annum on the Tranche B Term Loan is, at the Borrowers’ option, equal to a base rate or LIBOR plus an applicable margin ranging from 120 to 190 basis points, depending upon the Company’s leverage.

The Credit Agreement contains customary affirmative and restrictive covenants substantially similar to those contained in the Company’s Fourth Amended Revolver. The Company serves as the guarantor for any funds borrowed by the Borrowers under the Credit Agreement.

In connection with entering into the Credit Agreement, the Company entered into multiple interest rate swaps with notional amounts totaling $187.5 million to hedge the interest payments on the LIBOR-based Term Loans. As of the date of the Credit Agreement, the blended interest rate on the Tranche A Term Loan was 3.95% (weighted average swap rate of 2.30% plus the current margin of 1.65%) and the blended interest rate on the Tranche B Term Loan was 2.96% (weighted average swap rate of 1.66% plus the current margin of 1.30%).

On January 31, 2014, the Trust repaid outstanding variable rate mortgage debt of $35.6 million that was secured by the GrandMarc at Westberry collegiate housing community located at Texas Christian University. A prepayment penalty of $0.4 million was incurred as a result of the prepayment. At payoff, the interest rate of the debt was 4.88%. The loan was repaid with proceeds from the Fourth Amended Revolver and available cash.

In February 2014, the Operating Partnership entered into a purchase and sale agreement for the pending sales of The Reserve on West 31st at the University of Kansas and College Station at West Lafayette at Purdue University. These properties are an average of 1.7 miles from their respective campuses and both pending sales are expected to close by the end of the first quarter of 2014. The contracts, for a total of $41.9 million, became binding on February 14, 2014 with nonrefundable deposits. The Trust expects to recognize an impairment loss related to one of these transactions, with an expected gain on sale on the second in the first quarter of 2014.

100

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls and Procedures.

Disclosure Controls and Procedures

The Trust maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Trust’s filings under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and to ensure that such information is accumulated and communicated to the Trust’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. The Trust also has investments in unconsolidated entities which are not under its control. Consequently, the Trust’s disclosure controls and procedures with respect to these entities are necessarily more limited than those it maintains with respect to its consolidated subsidiaries.

Our management, under the supervision of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of the Trust’s disclosure controls and procedures (as defined in Rule 13a-15(e) or 15d-15(e) of the Exchange Act) as of December 31, 2013. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer had concluded that, as of December 31, 2013, the Trust’s disclosure controls and procedures were effective in causing material information relating to the Trust to be recorded, processed, summarized and reported by management on a timely basis and to ensure the quality and timeliness of our public disclosures with SEC disclosure obligations.

Changes in Internal Control Over Financial Reporting

There were no changes in the Trust’s internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) of the Exchange Act) during the quarter ended December 31, 2013 that materially affected, or are reasonably likely to materially affect, the Trust’s internal control over financial reporting.

Management’s Report on Internal Control Over Financial Reporting

Management’s report on our internal control over financial reporting is included in Item 8, Financial Statements and Supplementary Data, of this Annual Report.

Item 9B. Other Information.

None.

PART III

Item 10. Directors, Executive Officers and Corporate Governance.

The information required by this Item will be presented in the Trust’s definitive proxy statement for the annual meeting of stockholders to be held on May 21, 2014, which will be filed with the Securities and Exchange Commission and is incorporated herein by reference.

Item 11. Executive Compensation.

101

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Equity Compensation Plan Information

The following table provides information related to securities available and outstanding under EdR’s equity compensation plans as of December 31, 2013:



Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights		Weighted-average exercise price of outstanding options, warrants and rights		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in the first column)
Equity compensation plans approved by security holders	257,680	⁽¹⁾	—	⁽²⁾	2,810,068	⁽³⁾
Equity compensation plans not approved by security holders	—		—		N/A	⁽⁴⁾
Total	257,680		—		2,810,068


(1)	Represents up to 257,680 shares of common stock subject to outstanding equity awards granted pursuant to our 2013 Long-Term Incentive Plan and 2011 Long-Term Incentive Plan.


(2)	Does not account for the potential 257,680 shares of common stock subject to outstanding restricted stock units granted pursuant to our 2013 Long-Term Incentive Plan and 2011 Long-Term Incentive Plan.


(3)	Includes 223,030 shares of common stock available for issuance under the Education Realty Trust, Inc. Employee Stock Purchase Plan and 3,033,098 shares available for issuance under the Education Realty Trust, Inc. 2011 Omnibus Equity Incentive Plan.


(4)	Does not include 50,000 shares of restricted common stock which were granted to Randy Churchey on January 12, 2010 pursuant to an inducement award.

Except as set forth above, the information required by this Item will be presented in the Trust’s definitive proxy statement for the annual meeting of stockholders to be held on May 21, 2014, which will be filed with the Securities and Exchange Commission and is incorporated herein by reference.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

Item 14. Principal Accountant Fees and Services.

102

PART IV

Item 15. Exhibits and Financial Statement Schedules.

(a)List of Documents Filed.

1.Financial Statements

The financial statements of Education Realty Trust, Inc. are included in Item 8 of this Annual Report on Form 10-K.

The financial statements of University Village-Greensboro, LLC required by Rule 3-09 of Regulation S-X are included as Exhibit 99.1 to this Annual Report on Form 10-K.

2.Financial Statement Schedules

All schedules required are included in the financial statements and notes thereto.

3.Exhibits

The list of exhibits filed as part of this Annual Report on Form 10-K is submitted in the Exhibit Index in response to Item 601 of Regulation S-K.

103

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



	Education Realty Trust, Inc.
Date: March 3, 2014	By:	/s/ Randy Churchey
		Randy Churchey President, Chief Executive Officer and Director

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.



Signature		Date
/s/ Randy Churchey		March 3, 2014
Randy Churchey President, Chief Executive Officer and Director (Principal Executive Officer)

/s/ Randall H. Brown		March 3, 2014
Randall H. Brown Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer)

/s/ J. Drew Koester		March 3, 2014
J. Drew Koester Senior Vice President, Assistant Secretary and Chief Accounting Officer (Principal Accounting Officer)

/s/ Paul O. Bower		March 3, 2014
Paul O. Bower Chairman of the Board of Directors

/s/ Monte J. Barrow		March 3, 2014
Monte J. Barrow Director

/s/ William J. Cahill, III		March 3, 2014
William J. Cahill, III Director

/s/ John L. Ford		March 3, 2014
John L. Ford Director

/s/ Howard A. Silver		March 3, 2014
Howard A. Silver Director

/s/ Wendell W. Weakley		March 3, 2014
Wendell W. Weakley Director

104

INDEX TO EXHIBITS



Exhibit Number		Description
3.1		Second Articles of Amendment and Restatement of Education Realty Trust, Inc. (Incorporated by reference to Exhibit 3.1 to the Trust’s Amendment No. 2 to its Registration Statement on Form S-11 (File No. 333-119264), filed on December 10, 2004.)
3.2		Amended and Restated Bylaws of Education Realty Trust, Inc. (Incorporated by reference to Exhibit 3.2 to the Trust’s Current Report on Form 8-K, filed on February 20, 2009.)
4.1		Form of Certificate for Common Stock of Education Realty Trust, Inc. (Incorporated by reference to Exhibit 4.1 to the Trust’s Annual Report on Form 10-K filed on March 16, 2010.)
10.1		Amended and Restated Agreement of Limited Partnership of Education Realty Operating Partnership, LP. (Incorporated by reference to Exhibit 10.1 to the Trust’s Annual Report on Form 10-K, filed on March 16, 2009.)
10.2		First Amendment to Amended and Restated Agreement of Limited Partnership of Education Realty Operating Partnership, LP. (Incorporated by reference to Exhibit 10.2 to the Trust’s Quarterly Report on Form 10-Q, filed on August 1, 2008.)
10.3		Amended and Restated Agreement of Limited Partnership of University Towers Operating Partnership, LP. (Incorporated by reference to Exhibit 10.2 to the Trust’s Registration Statement on Form S-11 (File No. 333-119264), filed on September 24, 2004.)
10.4(1)		Education Realty Trust, Inc. 2004 Incentive Plan. (Incorporated by reference to Exhibit 10.3 to the Trust’s Amendment No. 4 to its Registration Statement on Form S-11. (File No. 333-119264), filed on January 11, 2005.)
10.5(1)		Form of Indemnification Agreement between Education Realty Trust, Inc. and its directors and officers. (Incorporated by reference to Exhibit 10.4 to the Trust’s Amendment No. 1 to its Registration Statement on Form S-11 (File No. 333-119264), filed on November 4, 2004.)
10.6(1)		Executive Employment Agreement between Education Realty Trust, Inc. and Randall L. Churchey, effective as of January 1, 2010. (Incorporated by reference to Exhibit 10.1 to the Trust’s Current Report on Form 8-K, filed on January 12, 2010.)
10.7(1)		Executive Employment Agreement between Education Realty Trust, Inc. and Randall H. Brown, effective as of January 1, 2011. (Incorporated by reference to Exhibit 10.1 to the Trust’s Current Report on Form 8-K, filed on January 3, 2011.) (2)
10.8(1)		Amended and Restated Executive Employment Agreement between Education Realty Trust, Inc. and Thomas Trubiana, effective as of January 1, 2013. (Incorporated by reference to Exhibit 10.1 to the Trust's Current Report on Form 8-K, filed on January 2, 2013.)
10.9(1)		Executive Employment Agreement between Education Realty Trust, Inc. and J. Drew Koester, effective as of January 1, 2011. (Incorporated by reference to Exhibit 10.3 to the Trust’s Current Report on Form 8-K, filed on January 3, 2011.) (2)
10.10(1)		Executive Employment Agreement between Education Realty Trust, Inc. and Christine Richards, effective as of January 1, 2011. (Incorporated by reference to Exhibit 10.4 to the Trust’s Current Report on Form 8-K, filed on January 3, 2011.) (2)
10.11(1)		Restricted Stock Award Agreement between Education Realty Trust, Inc. and Randall L. Churchey, dated as of January 12, 2010. (Incorporated by reference to Exhibit 10.2 to the Trust’s Current Report on Form 8-K, filed on January 12, 2010.)
10.12		Contribution Agreement dated as of September 24, 2004, by and among University Towers Operating Partnership, LP, Allen & O’Hara, Inc., Paul O. Bower, Clyde C. Porter, Robert D. Bird, Thomas J. Hickey, Barbara S. Hays and Hays Enterprises III, Ltd. (Incorporated by reference to Exhibit 10.8 to the Trust’s Amendment No. 2 to its Registration Statement on Form S-11 (File No. 333-119264), filed on December 10, 2004.)
10.13		Contribution Agreement dated as of September 20, 2004, by and between Melton E. Valentine, Jr. and University Towers Operating Partnership, LP. (Incorporated by reference to Exhibit 10.9 to the Trust’s Amendment No. 2 to its Registration Statement on Form S-11 (File No. 333-119264), filed on December 10, 2004.)
10.14(1)		Form of Restricted Stock Award Agreement. (Incorporated by reference to Exhibit 10.1 to the Trust’s Current Report on Form 8-K filed on August 17, 2006.)
10.15(1)		Education Realty Trust, Inc. 2011 Omnibus Equity Incentive Plan. (Incorporated by reference to Exhibit 99.1 to the Trust's Registration Statement on Form S-8 (file No. 333-173932), filed on May 4, 2011.)
10.16(1)		Restricted Stock Award Agreement between Education Realty Trust, Inc. and Randall L. Churchey, dated as of April 13, 2010. (Incorporated by reference to Exhibit 10.1 to the Trust’s Current Report on Form 8-K, filed on April 14, 2010.)

105



Exhibit Number		Description
10.17(1)		Education Realty Trust, Inc. 2011 Long-Term Incentive Plan. (Incorporated by reference to Exhibit 10.6 to the Trust’s Current Report on Form 8-K, filed on January 3, 2011.)
10.18(1)		Form of Restricted Stock Award Agreement (Time-Vested Restricted Stock) for the Education Realty Trust, Inc. 2011 and 2012 Long-Term Incentive Plans. (Incorporated by reference to Exhibit 10.7 to the Trust’s Current Report on Form 8-K, filed on January 3, 2011.)
10.19(1)		Form of Restricted Stock Unit Award Agreement (Performance-Vested Restricted Stock) for the Education Realty Trust, Inc. 2011 Long-Term Incentive Plan. (Incorporated by reference to Exhibit 10.8 to the Trust’s Current Report on Form 8-K, filed on January 3, 2011.)
10.20		Promissory Note, 929 N. Wolfe Street LLC and Education Realty Operating Partnership, LP, dated as of July 14, 2010. (Incorporated by reference to Exhibit 10.4 to the Trust’s Quarterly Report on Form 10-Q, filed on August 6, 2010.)
10.21		Agreement to Guarantee Loan, entered into as of July 14, 2010, by and between 929 N. Wolfe Street LLC and Education Realty Operating Partnership, LP. (Incorporated by reference to Exhibit 10.4 to the Trust’s Quarterly Report on Form 10-Q, filed on November 5, 2010.)
10.22		Amended and Restated Master Credit Facility Agreement, dated as of December 2, 2009, by and among Education Realty Trust, Inc., Education Realty Operating Partnership, LP and certain subsidiaries, Red Mortgage Capital, Inc. and Fannie Mae. (Incorporated by reference to Exhibit 10.1 to the Trust’s Current Report on Form 8-K, filed on December 8, 2009.)
10.23		Amendment No. 1 to Amended and Restated Master Credit Facility Agreement, dated as of February 25, 2010, by and among Education Realty Trust, Inc., Education Realty Operating Partnership, LP and certain subsidiaries, Red Mortgage Capital, Inc. and Fannie Mae. (Incorporated by reference to Exhibit 10.45 to the Trust’s Annual Report on Form 10-K, filed on March 16, 2010.)
10.24		Amendment No. 1 to the Education Realty Trust, Inc. 2004 Incentive Plan. (Incorporated by reference to Exhibit 10.47 to the Trust’s Annual Report on Form 10-K, filed on March 16, 2010.)
10.25(1)		Education Realty Trust Deferred Compensation Plan, effective as of October 1, 2011. (Incorporated by reference to Exhibit 10.55 to the Trust's Annual Report on Form 10-K, filed on March 8, 2012.)
10.26(1)		Education Realty Trust, Inc. 2012 Long-Term Incentive Plan. (Incorporated by reference to Exhibit 10.57 to the Trust's Annual Report on Form 10-K, filed on March 8, 2012).
10.27(1)		Amendment to the Education Realty Trust, Inc. 2010 and 2011 Long-Term Incentive Plans. (Incorporated by reference to Exhibit 10.58 to the Trust's Annual Report on Form 10-K, filed on March 8, 2012).
10.28		Fourth Amended and Restated Credit Agreement, dated as of January 4, 2013, among Education Realty Operating Partnership, LP, and certain of its subsidiaries as borrowers, the lenders party thereto and KeyBank, National Association as administrative agent. (Incorporated by reference to Exhibit 10.1 to the Trust's Current Report on Form 8-K, filed on January 15, 2013.)
10.29(1)		Education Realty Trust, Inc. 2013 Long-Term Incentive Plan. (Incorporated by reference to Exhibit 10.37 to the Trust’s Current Report on Form 10-K, field on March 1, 2013.)
10.30(1)		Education Realty Trust, Inc. Annual Incentive Compensation Plan. (Incorporated by reference to Exhibit 10.38 to the Trust’s Annual Report on Form 10-K, filed on March 1, 2013.)
10.31		First Amendment to Fourth Amended and Restated Credit Agreement, effective October 24, 2013. (Incorporated by reference to Exhibit 10.1 to the Trust’s Current Report on Form 8-K, filed on October 28, 2013.)
10.32(1)		Executive Employment Agreement between Education Realty Trust and Randall H. Brown, effective as of January 1, 2014.(Incorporated by reference to Exhibit 10.1 to the Trust’s Current Report on Form 8-K, filed January 7, 2014.)
10.33(1)		Executive Employment Agreement between Education Realty Trust and J. Drew Koester, effective as of January 1, 2014. (Incorporated by reference to Exhibit 10.2 to the Trust’s Current Report on Form 8-K, filed on January 7, 2014.)
10.34(1)		Executive Employment Agreement between Education Realty Trust and Christine Richards, effective as of January 1, 2014. (Incorporated by reference to Exhibit 10.2 to the Trust’s Current Report on Form 8-K filed on January 7, 2014.)
10.35		Credit Agreement, dated as of January 13, 2014 among Education Realty Operating Partnership, LP and certain of its subsidiaries and PNC Bank, National Association, as Administrative Agent and PNC Capital Markets LLC and Regions Capital Markets, as Joint-Bookrunners and Joint Lead Arrangers. (Incorporated by reference to Exhibit 10.1 to the Trust’s Current Report on Form 8-K filed on January 17, 2014)

106



Exhibit Number		Description
10.36		First Amendment to the Credit Agreement, dated as of February 14, 2014 among Education Realty Operating Partnership, LP and certain of its subsidiaries and PNC Bank, National Association, as Administrative Agent and PNC Capital Markets LLC and Regions Capital Markets, as Joint-Bookrunners and Joint Lead Arrangers, filed herewith.
10.37		Second Amendment to Fourth Amended and Restated Credit Agreement dated as of February 14, 2014, filed herewith.
10.38(1)		Education Realty Trust, Inc. 2014 Long-Term Incentive Plan, filed herewith.
12		Statement Regarding Computation of Ratios, filed herewith.
21.1		List of Subsidiaries of the Trust, filed herewith.
23.1		Consent of Independent Registered Public Accounting Firm, Deloitte & Touche LLP, filed herewith.
23.2		Consent of Independent Auditors, Dixon Hughes Goodman LLP, filed herewith.
31.1		Certificate of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.
31.2		Certificate of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.
32.1		Certificate of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, furnished herewith.
32.2		Certificate of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, furnished herewith.
99.1		Financial statements of University Village - Greensboro, LLC as of December 31, 2013 (unaudited) and 2012 and for the years ended December 31, 2013 (unaudited), 2012 and 2011(unaudited), filed herewith.
101.		INS XBRL Instance Document*
101.		SCH XBRL Taxonomy Extension Schema Document*
101.		CAL XBRL Taxonomy Extension Calculation Linkbase Document*
101.		LAB XBRL Taxonomy Extension Label Linkbase Document*
101.		PRE XBRL Taxonomy Extension Presentation Linkbase Document*
101.		DEF XBRL Taxonomy Extension Definition Linkbase Document*


(1)	Denotes a management contract or compensatory plan, contract or arrangement.


(2)	Superseded by employment agreement entered into effective as of January 1, 2014.



*	Attached as Exhibit 101 to this Annual Report on Form 10-K are the following materials, formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets as of December 31, 2013 and 2012, (ii) the Consolidated Statements of Operations for the years ended December 31, 2013, 2012 and 2011, (iii) the Consolidated Statements of Changes in Equity for the years ended December 31, 2013, 2012 and 2011, (iv) the Consolidated Statements of Cash Flows for the years ended December 31, 2013, 2012 and 2011 and (v) the Notes to Consolidated Financial Statements.

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