Latest posts by Andrew Gordon (see all)
- The Need for Privatized Student Housing - April 12, 2019
- Alternative Financing — Real Estate Crowdfunding - March 11, 2019
- Should Countries Restrict Foreign Real Estate Investment? - November 20, 2018
In today’s hyper-competitive college application process, student housing is a focus for many institutions of higher learning. The administrations and boards of trustees often believe that, by creating more attractive housing opportunities, they can improve their institution’s ability to attract and retain students and faculty residents. College housing preferences have changed drastically as students are now looking for more amenities and conveniences. Universities that decide to undertake these projects themselves can become exposed to significant financial and operational risks. The time dedicated to these projects can also interrupt the fundamental academic roles of these institutions. In response to these housing concerns, universities nationwide have increasingly turned to the private sector to fulfill their housing needs.
The Rise of Campus Housing Communities
The organization of campus housing into communities of common interest plays a significant role in defining the culture of a college or university. They provide housing options that build meaningful personal and social relationships that can promote and foster student intellectual growth and development (Bronstein, Taylor, & Samuels, 2010). Universities are not always equipped with the development and management expertise to execute and maintain such student housing projects. Like any real estate development, successful implementation of these projects requires diligent planning as well as the financial and operational resources.
Developing Appropriate Private Student Housing
Universities have often looked for alternative solutions to satisfy their housing needs and to mitigate development risk and financial exposure. With limited access to capital, institutions of higher education have recognized the value in partnering with private developers to assist in the financing, construction, and management of new student housing projects. Private developers can provide universities and colleges with valuable knowledge and expertise. There are various types of partnership structures and lease arrangements that can facilitate the processes. For example, private companies can receive long-term leases to develop and operate the land. Corvias is a private corporation that has been actively involved in student housing. In 2015, the company signed a 40-year deal with Wayne State University in Detroit that involved $300 million in upfront program capital, renovating 3,100 existing beds and delivering 841 more new beds (Fang, 2017). The University of Pennsylvania collaborated with University
Partners in the construction of the privately owned and managed Radian apartment complex. The project was in response to an increase in demand for desirable off-campus housing options with community and lounge spaces. Situated at the northwest edge of the University of Pennsylvania’s campus, the Radian is a 500-bed apartment complex that has expanded the array of housing closer to campus (Harman Group, 2019). The privatization of student housing has proven to be an attractive alternative for institutions of higher education to improve housing options and the overall campus community environment.
Bronstein, R. D., Taylor, J. A., & Samuels, S. L. (2010). Public-Private Partnerships in Student Housing: Why and how institutions of higher education seek partners to deliver, own and operate. Retrieved April 5, 2019, from http://www.thesciongroup.com/pdf/scion_whitepaper2.pdf
Croce, B. (2016, October 21). Corvias Enters Into 40-Year Partnership With Detroit’s Wayne State University. Retrieved April 5, 2019, from https://www.multifamilyexecutive.com/property-management/corvias-enters-into-40-year-partnership-with-detroits-wayne-state-university_o
Fang, H. (2017, June 16). Universities Are Increasingly Asking Private Developers To Build Their Student Housing. Retrieved April 5, 2019, from https://www.forbes.com/sites/bisnow/2017/06/16/universities-are-increasingly-asking-private-developers-to-build-their-student-housing/#69413a7a1f32
Ripley, H. (2019, February 19). How Penn and Drexel diverge in response to growing demand for housing. Retrieved April 5, 2019, from https://www.thedp.com/article/2019/02/upenn-drexel-housing-philadelphia-on-campus-private-sector
Shaver, L. (2012, August 8). Widescale Privatization Could Usher a New Era for Student Housing. Retrieved April 5, 2019, from https://www.multifamilyexecutive.com/property-management/demographics/widescale-privatization-could-usher-a-new-era-for-student-housing_o
The Radian Student Residence, University of Pennsylvania. (n.d.). Retrieved April 5, 2019, from https://harmangroup.com/projects/the-radian-student-residence-university-of-pennsylvania/
Williams, D. (2016, May 10). Privatized housing program paying off for University System of Georgia. Retrieved April 5, 2019, from