FINANCING

EdR has the experience and financial strength to deliver your project through various financial alternatives. Together, we will find the financial structure that's right for your university or college.

Since 2000, EdR has developed and acquired $2.4 billion of collegiate housing communities. While we can be creative with our approaches, our three most common methods of financial delivery for on-campus developments are:

• The ONE Plan℠ — The On-Campus Equity Plan
• The ONE Plan PLUS
• Tax Exempt Bond Financing

As a public company, we have the capacity to finance acquisitions or off-campus developments with our own equity investments or via loans with lending institutions, with which we have excellent relationships. EdR also can call on our relationships with lending institutions for primary support.

University Village Apartments on Colvin Syracuse University	University of Texas at Austin

EdR On-Campus Equity Plan — The ONE Plan℠ — allows colleges and universities to use our equity and financial stability to develop and revitalize campus housing while preserving their funds and debt capacity for other campus projects.

With The ONE Plan℠, EdR funds the project and develops the design in collaboration with the university to meet its needs and goals.

Structure and Benefits

• EdR assumes 100% of our equity investment and debt responsibility reducing potential adverse impact on the university's debt capacity.
• With The ONE Plan, the university or college has one partner and one equity source. We are your financial, development and operating partner. Our interests and desire for success align with yours in every aspect of the project.
• As a for-profit entity, EdR becomes ground lessee for a specific parcel and owner of leasehold interest for a specified lease term (typically 50-75 years). University land is not subordinated to any debt.
• EdR does not require a financial or occupancy guarantee. Based on review of actual market demand, the university may be required to provide marketing support.
• EdR funds and develops projects with approved plans and specifications.
• EdR (not a third party) assumes equity and debt responsibility. EdR's equity can't count against your debt capacity.
• Upon completion, EdR owns the project or a leasehold interest in the project, for term of ground lease. University receives annual ground-lease payments. EdR receives the balance of the project's net cash flow to provide a return on their significant investment in the project.
• Because we own the ground lease interest, EdR does not charge a development fee.
• EdR manages the housing operations and maintenance and can provide a Residence Life program for the students in accordance and conjunction with the university.
• At the end of the ground lease, ownership of the asset reverts to the university.

For additional information, contact the Development Team at 901.259.2500 or e-mail development@edrtrust.com.

Graduate Student Housing in the Science + Technology Park at Johns Hopkins

EDR created The ONE Plan PLUS to improve those situations where the cost of real estate taxes may make it difficult to provide the desired quality housing at affordable rent levels.

The same business structure and criteria applies as with The ONE Plan℠, but with one major exception: Instead of acquiring a leasehold interest, EdR secures a second mortgage to make financing the project balance feasible.

EdR still uses our equity, but instead of acquiring a leasehold interest, we secure a second mortgage along with conventional construction financing.

As a 501(c)(3), the project is often exempt from real-estate taxes, resulting in lower rental rates for residents as well as higher annual ground lease payments for the university.

Structure and Benefits

• EdR assumes 100% of equity investment and debt responsibility reducing potential adverse impact on the university's debt capacity.
• With The ONE Plan PLUS, the university or college has one partner and one equity source. We are your single financial, development and operating partner. Our interests and desire for success align with yours in every aspect of the project.
• A not-for-profit entity typically affiliated with the university becomes ground lessee for a specific ground parcel and owner of leasehold interest for a specified lease term (typically 50-75 years). University land is not subordinated to any debt.
• EdR does not require a financial or occupancy guarantee. Based on review of actual market demand, the university may be required to provide marketing support.
• EdR funds and develops project with institutions' approved plans and specifications.
• EdR (not a third party) assumes equity and debt responsibility. Our equity can't count against your debt capacity.
• EdR owns a second mortgage interest in the project. University receives annual ground-lease payments. Either the university or the not-for-profit entity receives the balance of the project's net cash flow, providing a return on its significant investment in the project.
• EdR manages the housing operations and maintenance and can provide a Residence Life program for the students in accordance and conjunction with the university.
• At the end of the ground lease, ownership of the asset reverts to the university.

For additional information, contact the Development Team at 901.259.2500 or e-mail development@edrtrust.com.

California University of Pennsylvania

EdR has broad experience and expertise in financing through tax-exempt bonds, wherein the university is not the borrower. This "project-specific-financing" typically does not require any guarantee or financial support from the university. Since 2000, EdR has delivered more than $1.3 billion of on-campus student housing around the nation with "project-specific" tax-exempt bond financing.

Structure

Under this structure, typically a 501(c)(3) not-for-profit entity owns the housing under a long-term ground lease from the university. The university controls all aspects of the project. Since EDR does not participate in project cash flow, 100% of the net cash operating profit flows back to the university or the not-for-profit entity.

The not-for-profit entity is the borrower, and the university does not typically guarantee the debt. The most common structure entails the university leasing its land to a university-related foundation or a limited liability corporation subsidiary of a foundation. EdR's role is as a fee-for-service developer for the project, not the owner.

The project financing involves project-based debt, requiring self-sustaining operations. The loan to cost is 100 percent. EdR provides development and construction oversight services for a fee based on project cost. EdR and the not-for-profit entity execute a reimbursement agreement for development-related costs prior to closing. Repayment is received when bond financing closes.

Benefits

• The university saves its limited capital and human resources to build the project, which is built and managed to university specifications, policies and goals.
• The university receives substantial annual ground rent payments.
• With no financial obligation, the university receives an excellent on-campus amenity and state-of-the-art housing for its residents.
• Savings on real-estate taxes and sales taxes on materials are realized.
• Typically this financing option provides a lower cost of capital.
• Improvements revert to the university upon completion.

Other Considerations

• Depending on the nature of housing and level of financial commitment by the university to the project, this structure may adversely impact the institution's debt capacity as determined by the rating agencies. Conversely, the university's credit rating may improve, as occurred with the Pennsylvania State System of Higher Education.
• Cost of issuance and reserves may or may not add 15 to 20% to the total development costs.

"Our revitalized housing community has helped grow our enrollment by 40% in the last six years. Our applications for women and men wanting to live in the new residence halls increased by 95% and 75%, respectively. Our students' satisfaction with the residence halls is significantly higher than the national norm."

Dr. Angelo Armenti, Jr.
Former President
California University of Pennsylvania

For additional information, contact the Development Team at 901.259.2500 or e-mail development@edrtrust.com.