As North American institutions of higher education review the ways in which they currently function, physical space will constitute a major portion of that discussion. It makes sense: space is more costly than ever, both in upkeep and rental costs. When looking towards their budgeting for the future, institutions should consider their real estate investments to determine where money can be saved, and space can be optimized. And there hasn’t been a better time for space evaluation. In light of COVID-19 and the increase in virtual learning, institutions can take a thorough inventory of the space they have and how to best utilize it.
As of 2020, North American colleges manage 250,000 facilities over 5 billion square feet. Of that real estate, more than 58% are more than 25 years old, often making them outdated and inefficient as well as incapable of being able to support the latest technology. $15 billion is spent every year in construction and renovation of college campuses, and $20 billion is spent in annual maintenance, operating and utilities.
How Higher Education can Best Utilize Their Real Estate
When it comes to getting the most out of an institute’s space, there are four considerations that can help make your current assets work for you.
- Maximize the efficiency of your existing facilities. As previously mentioned, $20 billion is spent every year on maintenance, operating and utilities by North American colleges. While updates and renovations may cost more up-front, the long-term investment can help your institution save money over time.
- Prioritize capital improvements and allocation of capital funds toward real estate. Capital improvements are those that do three things: ads substantial value to the property, becomes part of the property or is permanently affixed so that removal would cause damage to the property itself, and is intended as a permanent installation. Renovating existing buildings with capital improvements and utilizing capital funds in doing so can be far more beneficial than trying to build from the ground-up.
- Leverage facilities as a source of revenue for reinvestment. Multi-use buildings are commonplace, so if there’s a spot on campus that could be utilized by an outside or third party entity to bring in extra revenue, that partnership can be beneficial for both parties. These partnerships can include providing space for a third-party coffee shop or convenience store.
- Promote a positive environment that will attract and retain students on your campus. The longer students stay on campus, the more money, energy, and time they spend. Making your institution an ecocosm of its own will help students to stay on campus, utilizing the resources more and cycling their money through university amenities.
Creating a Strategic Real Estate Plan
When considering the above ways of best utilizing the current resources in higher education, it’s important to understand not only what your institution can do, but how it fits into a strategic real estate plan. A strategic plan looks over how space will be utilized long-term and will help you find ways to cut costs and generate higher revenue over the years.
In looking at future considerations, it’s important to know a few ways in which higher education facilities are changing:
- Facilities will be better utilized by right-sizing the ways in which space is used and recycling existing property assets. Especially as online learning continues, which doesn’t require a physical space–or requires very minimal space–for the university, institutions will be reassessing what space they have and where offices, labs and classrooms should move to better utilize what space already exists.
- Some locations may realize there is an advantage to decentralizing key faculties or providing co-locations in a variety of spaces.
- Institutions will increasingly acquire more flexible buildings and infrastructure. While a college classroom used to be built to be just a college classroom, the college of the future will take into consideration the ways in which a space can be used as a classroom one year, an open-office space for faculty the next, and so-on. There will be an increase in one-size-fits-most solutions when it comes to space.
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