ATLANTA-Education Realty Trust Inc. of Memphis has closed on a $195-million, sale-leaseback deal with locally based Place Properties LP. The renewable, five-year contract involves 13 student housing properties in six states, as GlobeSt.com reported on Sept. 21. The cash-debt deal equates to $33,084 per bed. The portfolio is 94.3% leased.

Paul O. Bower, EDR's chairman, CEO and president, calls the transaction the largest student housing portfolio purchase from a single party since his company's acquisition of 14 properties in January 2005 from affiliates of Dallas-based JPI Investment Co. LP.

"The sale-leaseback structure allows us to grow our company, our holdings and our revenues without growing our overhead at these individual properties," Bower says. "This is a very efficient way for us to enter into these regional markets, keeping experienced managers with local knowledge on the job, as we help enhance operations."

In the deal that close Jan. 6, Bower disclosed EDR paid $95.8 million in cash used to repay debt; assumed interest-only mortgage loans on the portfolio of about $98.7 million; and contributed 36,954 limited partnership units which are convertible into a like number of EDR common shares. The mortgage debt carries an average interest rate of 6.44% and an average term of 3.9 years.

Bower says the company's cash for the deal came from about $67.2 million raised in a private placement of EDR shares in September 2005 and from $28.6 million drawn from the firm's $100-million credit facility.

The acquisition from Place Properties increases EDR's student housing holdings to 39 properties with 25,395 beds, including 26 properties with 19,501 beds that EDR owns and manages. Bower says EDR continues to provide third-party management services for 20 additional collegiate communities containing 11,073 beds and has student housing communities with 5,590 beds under construction or in development.