As a result of the termination, Allen & O'Hara Education Services Inc. began managing the properties on Feb. 1. Under the lease termination, Education Realty will receive a one-time payment of $5.8 million. The company will begin recognizing the actual net operating income of the properties beginning Feb. 1.
Education Realty Trust CFO Randy Brown tells GlobeSt.com that the company acquired the properties from Place Properties in January 2006 and leased them back to Place as part of the sale agreement. The sale-leaseback deal carried a $195-million price tag and was 94.3% leased at the time of the sale, as GlobeSt.com previously reported.
"Place decided to terminate the lease because they are focused on other aspects of their business," Brown says. "It was a mutually agreeable arrangement." Brown adds that these properties are the only ones Education Realty owns that were managed by an outside third party.
"We believe the early termination of the lease will enable the company to more strategically manage the properties and will ultimately allow our shareholders to more fully participate in the upside of owning these assets," says Education Realty Trust president and CEO Paul Bower, in a prepared statement.
The properties include the 854-bed Clayton Place at Clayton College & State University in Morrow, GA; the 480-bed Berkley Place and the 288-bed Clemson Place at Clemson University in Clemson, SC; the 528-bed Statesboro Place at Georgia Southern University in Statesboro, GA; the 504-bed Jacksonville Place at Jacksonville State University in Jacksonville, AL; the 336-bed Macon Place at Macon State College in Macon, GA; the 408-bed Murray Place at Murray State University in Murray, KY; the 360-bed Cape Place at Southwest Missouri State University in Springfield, MO; the 336-bed Carrollton Place and the 504-bed River Place at State University of West Georgia in Carrollton, GA; the 408-bed Troy Place at Troy State University in Troy, AL; the 384-bed Martin Place at University of Tennessee-Martin in Martin, TN; and the 504-bed Western Place at Western Kentucky University in Bowling Green, KY.
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