MEMPHIS—Education Realty Trust (EdR), one of the nation's largest developers, owners, and managers of student housing, has released its first quarter earnings. Core funds from operations totaled $19.4 million in the quarter, compared to $16.4 million in the year ago period.

Here are some other quick numbers: Net operating income (NOI) was $21.4 million for the quarter, an increase of 1.9%, or $0.4 million, from the prior year. Revenue for the quarter was up 3% as compared to the prior year with a 2.9% increase in rental rates.

"During the first quarter, we continued to execute on our plan to produce solid internal growth through successful preleasing and meaningful external growth through our 2014-2016 development deliveries," says Randy Churchey, EdR's president and CEO. "As a result, the company is on track for a strong and successful 2014."

Same-community revenue for the quarter increased 3%. Without the reclassification of six properties moving into the same-community portfolio at the beginning of 2014, same-community revenue was up 4.2%.

Meanwhile, same-community operating expenses for the quarter increased $0.7 million. And preleasing for the 2014 to 2015 lease term is 300 basis points ahead of last year with the same-community portfolio 70.6% preleased.

According to EdR, the same-community portfolio is projected to open the 2014-2015 lease term with an increase in revenue ranging from 3% to 4%. That includes 1% to 2% increase in occupancy and about a 2% increase in net rental rates. EdR expects new supply in markets served to slow by 9% from 2014 to 2015.

Equity research firm MLV called EdR's same-community operating fundamentals “slightly sluggish,” as NOI was only up 1.9% in the quarter. The firm indicated that management commentary further supported its view that supply concerns across the student housing space are unwarranted and have created a compelling entry point for all student housing REITs.

Equity research firm MLV called EdR's same-community operating fundamentals “slightly sluggish,” as NOI was only up 1.9% in the quarter. The firm indicated that management commentary further supported its view that supply concerns across the student housing space are unwarranted and have created a compelling entry point for all student housing REITs.

“With continued plans for capital recycling, management is also confident the company can fund its planned development pipeline without tapping the equity markets,” MLV wrote in its analysis. “This strategy should further increase the quality and value of EdR's portfolio, which should, in turn, lead the stock higher. While we continue to see upside to EdR's shares, we favor ACC and CCG within the student housing sector, where we see deeper valuation discounts or stronger operating growth. As such, we maintain our hold rating and $11 year-end price target.”

Pulling back the lens, EdR reaffirmed a full-year increase of 13% to 24% over 2013. The REIT also sold two communities that were an average of 3.4 miles from their respective campuses for a combined price of $41.9 million and inked a $187.5 million term loan in January with five- and seven-year tranches at an effective fixed interest rate of 3.6%.

"Our on-site teams have done a wonderful job maintaining the leasing momentum we built early in this year's leasing cycle," says Christine Richards, EdR's senior vice president and COO. "We have remained focused on our leasing efforts while continuing to improve resident satisfaction and controlling direct operating expenses."