Student Housing Business

JUL-AUG 2018

Student Housing Business is the voice of the student housing industry.

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Monday: In the president's first year — he's been here seven years so he came about a year before I got here — we've been able to expend over $2.2 billion in facili- ties across this campus. When we think about that, housing is a criti- cal component. Approximately $450 million of that $2.2 billion is in student housing. We com- pleted 6,850 beds in 14 new resi- dence halls between fall of 2012 and fall of 2017. That's 2.6 mil- lion square feet of new housing spaces on our campus. That then propelled new thinking and a new opportunity for us to look at other strategies. We also launched a public-private partnership (P3) for our dining program, as well as a new student center that we just opened in the last few weeks. The Gatton Student Center is a magnificent facility focused on belonging and on student success. It is fast becoming what President Capilouto calls 'the living room' of our campus. Dining was that core, though, that began to push us to think a little bit differently. If you think about those six quality- of-life areas, we've done athletic facilities, transportation facilities and recreation facilities and we've spent more than $80 million in dining facilities in the past few years. We have a number of alums who come back, and their first observation is that it looks like a different campus. The facilities look wonderful, but more impor- tant is what happens inside those facilities. We know that students learn better in an improved facil- ity environment where they can sit around the table and work in teams and produce their projects and push them up to a screen that others can then review immedi- ately. These facilities foster col- laboration — the kind of collabo- ration they will have to excel at in the modern workplace. We know that our students — when they have study spaces in their housing facilities — can collaborate and build teams and relationships. They can build memories when they sit around a table in a dining hall. In an important sense, it's not just going to the dining hall to eat, it's going to the dining hall to build community. We're reaping the benefits of this. We're seeing a first- and second-year retention rate that we expect to move at least 3 percent within two years. Overall retention of our first-year class, from the first to second year, we'll have moved from 81 percent to 85 percent retention in the past few years. We're going to be between 85 and 86 percent this fall. It's one of those core fabrics. Housing and dining and the student center play a role in supporting student belonging and engagement and academic success. We are also layering in strategies to address unmet finan- cial need. Rewarding our students in the scholarship program dif- ferently has helped that. But it's a fabric that has helped us build that environment that is produc- ing higher levels of success. SHB: How did the P3 come about with EdR? Why was it necessary to execute in this way? Monday: It's really framed around what we found in 2010, 2011 and 2012. The president arrived in 2011. Our undergradu- ate housing had an average age of more than 44 years. The infra- structure was starting to fail. We'd only built 686 beds in the past few decades. We built those in 2005. We also wanted to grow enrollment. Competition for stu- dents was getting much more aggressive. We also wanted to be able to respond to more out-of- state residents wanting to come to the University of Kentucky. What solutions exist? One of the reasons why housing P3s have some momentum is there's capital available. There's not capital nec- essarily to build a student center in a P3 model, but there is capital that's available; it used to just be in dining and bookstores. Now you see capital markets respond- ing to the needs of housing on student campuses and how that's changed in the past few years. We also wanted to do it in a timely fashion. We wanted to have the same pricing that we charge for the 2005 halls and the new halls. So that meant we had to do it quickly. We wanted to also not crowd out other capital plans that we had on our campus. We have an academic medical center on our campus that has huge capital needs. We needed to build addi- tional academic buildings and those have huge capital needs. So H A R R I S O N S T R E E T Focused Investments in Education, Healthcare & Storage Real Estate With over a decade of experience and more than 82,000 beds under management, o u r i nve s t m e n t ex p e r t i s e a n d exc l u s i ve f o c u s i n Ed u c a t i o n, H e a l t h c a r e a n d St o r a g e p r ov i d e s c o n f i d e n c e o f exe c u t i o n . Harrison Street is the largest private owner of student housing in the country and partners with highly skilled developers and operators to invest capital across the risk/return spectrum. The firm's diversified capital sources allow for a variety of investment strategies within the Education sector including on-campus Public-Private Partnerships and off-campus urban, mid-rise, garden, and cottage-style properties. W W W.HARRISONST.COM | 312.920.0500 ACTIVELY INVESTING IN STUDENT HOUSING Development • Acquisition • Disposition VIE W FROM THE ACADEME July/August 2018 43

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