Allen & O'Hara Completes Financing for California State University Student Apartments.

Business Editors & Education Writers

MEMPHIS, Tenn.--(BUSINESS WIRE)--March 26, 2002

Allen & O'Hara Education Services, LLC (AOES), a wholly-owned subsidiary of Allen & O'Hara, Inc., today announced that it has completed financing for the University Village student apartments it is developing on the campus of California State University at San Marcos, California. AOES was selected by the California State University (CSU) system to develop and manage the first privatized, on-campus student housing complex on any of its 23 state university campuses. The development format established at the Cal State San Marcos site will become a prototype for developments on other CSU locations. Project development costs of approximately $27.8 million were financed through the sale of tax-exempt bonds.

University Village, the first of several phases of housing to be built on the Cal State San Marcos campus, will accommodate 476 students, primarily freshmen. The apartments were designed by ONYX Architects of Pasadena, California, and are composed of two and four-bedroom units. The project includes a large community building where recreational and educational amenities will be provided for the students, and the architecture will compliment the existing design of the main campus.

Working with AOES as development consultant is Hutton Development Company of Costa Mesa, California. Hutton has over 20 years development experience, including student housing at the University of California Riverside. Bond financing was arranged by Morgan Keegan & Company of Memphis, Tennessee, which has extensive experience in university bond financing. All operating profits from the facility will be paid to the CSU Foundation as land rent.

Groundbreaking is expected in early March, and students will move in at the beginning of the fall semester of 2003.

Cal State San Marcos President Dr. Alexander Gonzalez said, "We are excited about the development of our first on-campus housing for students, and we are convinced that AOES was the right company to develop and manage it. Allen & O'Hara's expertise ensures that the new apartments will provide our students with an enriching learning/living environment at Cal State San Marcos. We're also pleased to be the site for the CSU system's first privatized student housing, and we are confident that our new apartment community will serve as a model for other universities in California and elsewhere," Gonzalez added.

"It's always fun to be a pioneer," said Paul O. Bower, president and CEO of Allen & O'Hara. "We pioneered the development of private student housing nearly 40 years ago, and we now continue that tradition at Cal State San Marcos by developing their first on-campus residence and the first privatized student housing for the California State University system. We appreciate the opportunity to work with the university on this project, and we look forward to many years of providing Cal State San Marcos students a comfortable and uplifting home away from home."

Cal State San Marcos is a rapidly growing university of 6,500 students nestled in the foothills of northern San Diego. Distinguished by its small class sizes, accessibility of faculty, and challenging academic programs, Cal State San Marcos is projected to double in size by the year 2010.

Memphis-based Allen & O'Hara is a diversified real estate developer and manager with almost 40 years experience in the student housing industry. Allen & O'Hara has developed, owned, or managed 80 student housing properties comprising over 28,000 beds in 21 states. Through the years, Allen & O'Hara has housed nearly 400,000 students. AOES is currently managing more than 7,600 beds at student residences at the University of Louisville, the University of North Carolina, North Carolina State University, Alabama A&M University, and Salisbury State University, to name a few.