Student Housing Business

JUL-AUG 2018

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

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VIE W FROM THE ACADEME July/August 2018 StudentHousingBusiness.com 44 where are we going to go get $400 million or $500 million? We could borrow it. But that may limit our borrowing capabilities for other projects. We wanted to see, could the market respond? So, we laid out this grand challenge. Initially, our first signed lease with EdR was for one project — 601 beds in two residence halls that we opened that first year. We had such a good experience with them that it led from 601 to 6,850 beds in the course of five years based on having a great proof of concept. Our students responded to it. It helped us grow. It helped us to be more competitive and then that launched into the other phases that produced the other 6,249 beds over the next four years after. We had the need. We wanted to begin with the end in mind. We believe in that concept. We negotiate all our P3s under something we call TRIPP. That acronym stands for Term, Return, Investment, Program and Principles. Program and Principles are most important. For us, this includes a lot of factors. We're going to charge the same rate. We need to have more social and academic spaces in these halls. We don't want to go much more than two thirds revenue spaces. We want to have a lot of non-revenue space — academic spaces, study rooms, classrooms. We weren't going to adjust our building requirements. We wanted to see limestone and red brick and high-quality buildings. We want to respond to what our students are telling us. We want more private rooms. We're not going to have hall baths. And then we back up and say based on those programs and principles, what do we need in a level of investment? What's the amount of return we need from our partner? And then what's the term? That's what led us. We got good market response. And then we started negotiations. We chose a partner. We did the proof of concept. At the same time, we painted this picture that it could be up to 9,000 total beds on campus, but focused on 601 first. It worked. SHB: What did you do with your old housing stock? Monday: Most of the old housing stock was torn down and built back on the existing phas- es. We used most of that land. We have the Kirwan Blanding complex that we've taken offline. We sought approval in the past year to remove those facilities from the campus. Those could be future housing sites or can be utilized for other institutional needs as well. We'll move to tear those down in the coming one to two years as well for green space for our students' short-term use. SHB: Explain your history with P3s, and how you brought this model from LSU when you came to Kentucky. Monday: UK had contracted housing and the bookstore before I got here. I participated in a dining P3 in the late '90s at LSU. We did a bookstore P3 at LSU in the late '90s, early 2000s. That was my frame of experience. We were looking at some modernization opportu- nities. If you've seen the Nicholson develop- ment at LSU, it was launched my last two years there. The P3 process for housing had started when I arrived at the University of Kentucky. A number of leaders here at UK had done good work on that. What we've done in P3s since I've been here is the bookstore, dining, and multimedia. Then we've been creative in how we've looked at our licensing program. Our trademark licensing program has generated a significant eight-digit return for the university as well. We've tried to be reasonable in how we've looked at these public-private partner- ships and be bold in how we define that. Lewis Hall is the residence hall for UK's Lewis Honors College. Opened in 2017, the hall houses 346 students.

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