WHAT DOES IT TAKE TO MAKE A PUBLIC-PRIVATE PARTNERSHIP WORK?

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1 Page 1 of 5 National News > Real Estate News News WHAT DOES IT TAKE TO MAKE A PUBLIC-PRIVATE PARTNERSHIP WORK? Matthew Rothstein, FREE PHILADELPHIA E-NEWSLETTER I accept the terms of use SIGN UP FOR FREE! Facebook Twitter LinkedIn Print At 's Annual 2016, the final panel of the day broke down the nature and challenges of publicprivate partnerships, or P3s, in getting student housing built at universities. NATIONAL ANNUAL MULTIFAMILY AND MIXED-USE CONFERENCE Bill Witte -- Related California Victor MacFarlane -- MacFarlane Partners Brian Eisendrath -- CBRE There are two main reasons for a college or university to enter into a P3: to seek assistance in financing and/or to seek

2 Page 2 of 5 guidance in the development process. want to do a P3 because a private firm has more knowledge in the real estate sphere, and they can act more quickly in the market. P3s are becoming more common a notable example of this is the Schuylkill Yards project, of which Drexel is a partner and that s no accident, Provident Resources Group s Steve Hicks says. You also have to consider the herd mentality when colleges see other schools doing P3s, they wonder if they can do it too. Of course, to desire something and to be able to pull it off are two different things. Some universities may not know quite what they re getting into. If it s a university s first P3 venture, it s the developer s job to educate the client about the deal up front, says Roger Demareski, who oversees finance for Lafayette College. It can feel like you re treating them like they don t know anything, but it s worth it to have a discussion that puts everyone on the same page regarding a project s goals. That education can be a long process one major university Steve worked with took four years to put together the development team it wanted but it s crucial, especially with the wave of mixed-use developments for student housing that has been going on. MOST READ STORIES 1 What Does It Take To Make A Public-Private Partnership Work? 2 Stone Manor Corporate Center In Warrington Sells For $19.7M Office Retail space on the ground floor of student housing buildings has become more common, but universities and 3 4 Post Brothers To Spend $50M On Two Center City Retail Properties Jun 08, 2016 Retail PMC No Longer Wants Affordable Housing In One

3 Page 3 of 5 colleges are often still requires engagement from the university. It can be tempting to simply turn over all decisions to the developer, but Julie Skolnicki of EdR cautions, The university needs to understand to which project their revenue is going. Student housing is at least as much about the financing as all other forms of commercial real estate, and making a project cost effective is not just about profit margin. For colleges, keeping the cost of living down is an important way to improve access to education for low-income students. The industry needs to be reminded that the consumer is so concerned with return on investment, we can t continue to grow the cost of attending a university the rate it s been going, Roger warns. 5 Water Street Multifamily Development Jun 08, 2016 Multifamily Radnor Property's David Yeager On Breaking Ground At New Development Vue32 May 18, 2016 Mixed-Use MORE TOP STORIES Many developers and financiers can also be new to P3s, and for those, the panelists had some advice: listen and communicate with the university, to make sure you re meeting its needs and developing a project that has the potential to remain successful long term. It s the difference between P3s and most developments the commitments colleges are forced to make with their buildings. For private companies assisting colleges, how to respect that commitment depends on what service you re providing.

4 Page 4 of 5 Steve says. A building will be occupied for far more time than it takes to build it, which is why the life of the project requires thought from the beginning. Todd says that often falls by the wayside. You spend years working on all the agreements, but it s uncommon to see a college do a post-occupancy assessment. You have to check yourself. Roger agrees, adding that respective parties involvement over the life of a project needs to be discussed up front, and for all the nuances involved with financing, land use and weighing amenities with occupancy, one thing stands out above all: communication. As with any successful partnership, the more communicative each side is, the better a project can serve everyone s needs. Pictured: BASH's speed networking See Also: Moving Up Related Topics: EdR, Julie Skolnicki, Todd Stern, Steve Hicks, U3 Advisors, Provident Resources Group, Roger Demareski Facebook Twitter LinkedIn Print RELATED STORIES Big Projects at Penn Gen Y Makes New Rules For Multifamily Moving Up

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