Three main business segments
EdR (EDR) classifies its business segments by their unique customer base and services provided. The company has the following three segments:
- collegiate housing leasing
- development consulting services
- management services
Collegiate housing leasing
The collegiate housing properties are normally off-campus properties located very close to the campus. The median distance of EdR’s properties from the campus is 0.1 miles. The average age of the properties is around seven years as of September 2015. The company generated 83% of its net operating income from properties adjacent to campus.
The company’s off-campus properties can appeal to some students, as they offer more flexible rules than on-campus housing properties. However, the support of the educational institutions for properties located near their campus is important to the success of EdR’s off-campus properties.
Development consulting services
The development consulting services division is one of the company’s smaller business segments. EdR’s development services include short-term consulting assignments as well as complete development and construction projects. EdR provides development consulting services to educational institutions that are planning to redevelop their on-campus student housing communities. The company also provides its services to other third parties.
The management services segment is the smallest business segment of the company. The company provides management services for student housing communities owned by third parties like educational institutions. In such contracts, the company is mainly responsible for the operational aspects.
The other major apartment REIT players like Equity Residential (EQR), Essex Property Trust (ESS), and AvalonBay Communities (AVB) mainly focus on resident leases. EdR makes up 0.53% of the iShares U.S. Real Estate ETF (IYR). EdR makes up 0.20% of the SPDR DJ Wilshire Global Real Estate ETF (RWO).
In the next article, we’ll take a closer look at student housing industry dynamics.