NASHVILLE, TN—Despite leasing “vigor” in the second quarter,analysts at MLV & Co. Inc. maintain a “hold”position on Education Realty Trust, Inc. due toits slight miss on quarterly revenue estimates.

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In its research report, MLV states that Education Realty's FFOcame in a penny below consensus at $0.15 a share and two centsbelow MLV's FFO estimate for the student housing real estateinvestment firm.

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EdR is one of the largest owners, developers and managers ofcollegiate housing in the United States. The self-administered andself-managed REIT owns or manages 64 communities in 24 states withmore than 36,000 beds in more than 12,000 units.

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“EdR continues to lay out a solid pipeline for growth as thecompany continues to execute on its portfolio recycling strategywhile successfully juggling the 2014/15 lease-up,” MLV states. “Wefind the company's involvement in the RFQ for theUniversity of Georgia to be interesting given thenature of the universities involved, but we see the potential forEdR's involvement to be entirely in a fee for services capacity,which would likely be viewed favorably by investors.”

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MLV Senior Analyst Ryan Meliker is forecastinga $12-a-share target price for the stock by year's end. He and MLKAssociate Michael Kodesch state that among thepositive trends at Education Realty include its on-campusdevelopment deals, including a large transaction with theUniversity of Kentucky.

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“The portfolio has and is expected to deliver the strongestinternal growth profile among the Campus Housing REITs; and webelieve EdR's 4.4% current dividend yield, which is above theApartment REIT average of 3.3%, is safe,” MLV states in itsreport.

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The MLV analysts are concerned about EdR's external growth,which is trading at a material discount to net asset value. “Whilewe don't see any near-term capital needs given the company's assetdisposition plans, for continued growth, equity offerings may be inorder. Trading at a material discount to our NAV estimate, eitherthe company will elect to limit its growth or dilute shareholdersat a material discount to NAV. Either scenario limits upside to thestock,” the analysts state in their report.

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John Jordan

John Jordan is a veteran journalist with 36 years of print and digital media experience.