The number of public-private partnership (P3) developments continues to increase as universities look to upgrade their housing stock to attract and retain students while juggling how to pay for new residence halls.
“The cost of providing education continues to increase for universities, while state funding remains stagnant,” says Jason Taylor, vice president of public-private partnerships at American Campus Communities. “Meanwhile, deferred maintenance of campus facilities is at an all-time high and the median new or renovated age of campus housing exceeds 40 years.”
“This leaves a critical challenge for universities to find the resources to build, update and repair student housing communities that will support recruitment, retention and student success,” Taylor continues. “More than ever, higher education institutions are leveraging public-private partnerships to transfer long-term maintenance risk to the private sector.”
And increasingly, P3 projects aren’t just addressing housing needs — universities are partnering with the private sector to create masterplanned districts geared towards enriching the campus for students, faculty and visitors, alike, with the addition of mixed-use elements and features that enhance mobility around campus.
“Colleges and universities expect new on-campus developments to serve multiple institutional needs,” says Peter Isaac, executive vice president of public-private partnerships at CA Ventures. “Student housing continues to be an anchor for on-campus development, but institutions are using the housing to drive other campus masterplan initiatives such as enhanced mobility, sustainability and spacial planning. An increasing number of institutions are willing to support the cost of these non-residential or non-retail spaces with a mid- or long-term master lease for a portion of the space.”
When it comes to design, it’s no secret that today’s students prioritize personal success, and new developments on-campus have placed a heavy focus on academically-minded amenities and affordability. Group and individual study spaces and fitness and wellness facilities featuring top-of-the-line technology that help students achieve their goals both in and out of the classroom are top of mind for those designing and developing on-campus housing.
“Many residents are more interested in education-focused amenities, including computer rooms, free wifi and group study lounges, rather than lifestyle-focused amenities like tanning beds, so our focus is on providing student tenants with the tools they need to be successful,” says Kyle Bach, president and CEO of The Annex Group.
Julie Skolnicki, senior managing director of university partnerships at Greystar, agrees. “Community, academic and wellness spaces are the top priorities for on-campus developments,” she says. “Generation Z’s behavioral tendencies have been described by consulting firm McKinsey & Company as ‘communaholic,’ with a desire to be radically inclusive. A variety of spaces that allow students to come together and connect in unique ways both digitally and in-person are essential to a successful project.”
A Change in Amenities
Generation Z is also looking for affordability. “The key aspect of any project these days is affordability and tying the project to specific educational outcomes,” says Jeff Turner, executive vice president at Brailsford & Dunlavey. “We are seeing less amenity spaces that are not core to the mission, and more study spaces and academic spaces. For example, we are working on honors housing projects to help schools elevate their honors housing programs.”
To help on the affordability front, Greystar is looking to international projects and urban-infill developments across its portfolio for inspiration. “The focus on affordability is real and is here to stay,” says Skolnicki. “Our university partners are looking to us to innovate and advance the idea of collegiate living with a focus on academic outcomes, community engagement and affordability. We are taking cues from our global portfolio of student housing in London, Paris and Barcelona as well as Greystar’s flex-housing communities in urban areas like San Francisco and New York City to drive efficiency into the units and create authentic community spaces. This focus on smart unit design and high-quality finishes drive efficiencies in development, construction and operations.”
Another important feature for today’s student is excellent wifi. “With a renewed focus on affordability, amenities such as tanning beds and lazy rivers are seemingly a thing of the past,”says Ned Williams, senior vice president at Michaels. “But there is one amenity that is by far the most important to every student we talk to — high speed internet. Wifi has to have a huge capacity given the popularity of streaming content and we spend a lot of time with industry partners designing substantial internet infrastructure that is modular and can adapt as technology changes.”
In a survey conducted by American Campus Communities, 65 percent of students noted that they prefer using a wireless connection when accessing online, social media and streaming content. “We make it a priority to have reliable, high-speed wifi bandwidth available to all residents, and we are continuously exploring innovative ways to deliver the best connectivity for academic and social purposes,” notes Taylor.
The benefits of wifi don’t stop at the student population — properly utilized technology can help the institution work smarter and more efficiently. “Higher education professionals — not just in housing — are racing the evolution of technology and our students’ desires and needs to benefit from it, use it, explore it and learn with it,” says Becky Sierp, regional manager at COCM. “Our ability to manage technology advancement and to manage the personnel, software and hardware to support it, directly impacts the student experience, learning and the ability for faculty and staff to function optimally.”
Alongside excellent wifi, the integration of smart technology is an attractive element for the current generation of students entering campus. “Students are enjoying the smart home technology we’ve implemented in our new communities,” says Amy Aponte, vice president at Balfour Beatty Campus Solutions. “The app-based management of their physical environment — like their thermostat, lighting and living scenes — finds a natural home in their daily stream. On a communal level, it also connects students in a community-wide consciousness about energy-use and collective behavior. Sharing life in common areas is an important component of the collegiate experience and harnessing technology to build community is a win. We believe the utility savings and marketing advantage of these investments easily pay for themselves.”
Entrepreneurial space is another big topic in on-campus development, providing students with a space to create and academically shine. “We’re seeing more maker spaces in communities today,” says Jeremy Doss, senior vice president of RISE: A Real Estate Company. “Entrepreneurship centers are a hot program topic across the board. Today’s students are creative and industrious and we’re making sure to explore the concept in each of our latest partnerships. These spaces are flexible and adaptable but are designed and located to be highly-visible and work to not only draw residents and other campus constituents in but also be another place for students to see and be seen.”
Convenience plays another big part in design for Generation Z, with students having grown accustomed to near-instant package delivery, ride-share services and app-based food delivery. “Quick and convenient access for ride share and delivery businesses is another important design consideration,” continues Doss. “Uber, Uber Eats and other similar applications need to be thoughtfully planned for in the design and programming of new buildings. Package delivery coordination is also important as packages are coming in at an increasing rate.”
While universities have traditionally focused on providing housing for freshmen and sophomore students, many are shifting gears and looking to attract upperclassmen and graduate students back on-campus. “We’re beginning to see more schools wanting to accommodate their middle and upperclassmen on-campus,” says Doss of RISE. “Universities are looking at what is popular off-campus and working with us to develop a project and program that makes students want to stay on-campus. Amenities and independence are important factors for students, while parents are often attracted to on-campus options and are willing pay premiums for the new facilities.”
Jeff Jones, principal at Capstone Development Partners, is also seeing a greater number of requests for housing geared towards upper-level students. “We are exploring new and innovative unit types to address the evolving needs of upper-division students, including graduate students,” he says. “These explorations are focused on the needs of current and future generations, as well as affordability long-term. Price point continues to be a key driver of unit programming — particularly in urban and/or expensive construction markets — so creativity and flexibility in unit sizes and with furniture configurations is increasingly important.”
Some universities are even looking at offering affordable housing for faculty on-campus. “Much of the undergraduate demand has been met, either on- or off-campus,” says Williams of Michaels. “In the past year, many of the requests for proposal we have seen released by universities were for graduate students, faculty and staff, or a combination of both. We are currently shortlisted for a 600-unit project at the University of California, Santa Barbara, that is exclusively for faculty and staff. It is a mix of for-sale and for-rent units, but all under a P3 structure on the university’s land. Affordable housing for faculty is just as much of a problem as it is for students in a lot of markets. Universities are turning to us to help them provide housing to make sure they can market to — and retain — faculty.”
Looking Towards the Future
All signs point to continued interest from universities in public-private partnership development moving forward, as more and more successful projects continue to shine light on the benefits of the P3 structure. “As universities are becoming more familiar with the P3 structure and its flexibility, they are increasingly understanding the value of, and embracing the concept of, privatizing the facility and asset management functions for new on-campus facilities,” says Doss of RISE.
Jones of Capstone Development echoes this prediction. “I believe universities will continue to turn to private partners for assistance in funding, developing, replacing and renovating on-campus housing, as traditional funding sources continue to shrink, and as more experienced and capable facility staff on campuses retire,” he says. “Institutions will continue to see and appreciate the experience, efficiency and value that proven, highly-qualified developers and operators bring to their campus housing developments.”
“P3 housing initiatives will continue to be combined into larger campus development projects that address academic, dining, recreation, athletic, retail and parking facility needs,” continues Jones. “On-campus sites are getting more scarce as universities grow and build out their campuses, so there will likely be more vertical development and integration of these various components. This will make the projects more complicated, but also more dynamic.”
From housing-focused projects to masterplan districts, public-private partnerships are growing at a fast pace across the country and show no sign of slowing. “We are being asked about non-housing P3 solutions at a skyrocketing rate,” says Aponte of Balfour Beatty Campus Solutions. ”Housing partnerships have provided the data set on what makes for a strong P3. Campus leaders are thinking differently about the bright, shiny opportunities to evolve in a new campus masterplan. Fifteen years ago, universities might have prioritized projects for state funding. Today, they work to quickly evaluate where public-private partnerships make sense. Curricular facilities, office space, athletics, arts, energy and infrastructure investments are all being evaluated as potential P3s. Frankly, it’s quite an exciting time to be serving colleges and universities in this space. We are encouraged to see provosts, faculty, students, alumni and broader campus constituents look into these projects.”
— Katie Sloan
This article originally ran in the November/December 2019 issue of Student Housing Business magazine.