It’s been a long time coming for new student housing residences at Howard University.
The private institution in Washington, D.C. recently partnered with Philadelphia-based Campus Apartments for a new $107 million project to house 1,360 students and classroom spaces by 2014.
"The institutions in general move methodically and sometimes slowly, but you have to balance many concerns," says Dan Bernstein, chief investment officer at Campus Apartments.
For years, the university pushed to fill a much-needed housing void, as its campus housing stock failed to keep pace with student enrollment. After responding to the university’s request for proposal four years ago, Campus Apartments began working with it closely to determine the best practices for developing a new residence that balanced a proper live/work environment.
A small hurdle included the terms of the partnership. Campus Apartments are only a part of the development and planning stage at Howard. The company typically invests in its own balance sheets and does third party management, but will not manage the building post-delivery due to it being an underclassmen housing option.
“You have to understand how universities think and what their sensitivities are,” Bernstein says. “In some cases when you’re dealing with underclassmen, the school has a very specific way in which it socializes their students.”
Typically, if the school wants to retain the management, it’s because they’re underclassmen buildings, he adds. This type of business structure has plenty to do with it being a public/private partnership (P3) as well. The P3, as Bernstein describes, is a niche within a niche.
The business is difficult to get into because it’s so small, and requires a full-fledged understanding of how to strike deals and work with universities. But there’s plenty of opportunity there.
“There’s been a paradigm shift to P3s,” Bernstein says. “Even some of the well-known private institutions with large endowments are turning to the public sector. There’s a lot of institutional capital coming into the student housing space.”