University of Colorado-Denver finds a creative path to finance student housing

Located in vibrant downtown Denver, University of Colorado-Denver (CU Denver) enjoys an enviable reputation for its medical school, music-business program and other offerings among 130 different degree programs. Historically, it has served non-traditional commuter students, most of whom don’t live on or near campus. Looking to increase enrollment among students seeking a traditional on-campus experience, major questions arose. Where would the students live, learn and play? And, how would the university funds its ambitions?

Clearly, achieving the vision was going to require a thoughtful road map. CU Denver created a 15-year real estate master plan to provide high-quality learning, living and leisure facilities and create a more cohesive student community. Planning was only half the battle. The other half?

Financing and implementing the plan amidst limited state funding prospects. CU Denver needed creative approaches that would make the most of the institution’s valuable real estate assets.

CU Denver turned to JLL to analyze ways of generating revenue from its real estate assets as a means of advancing the new facilities master plan. The university needed a realistic strategy that would take advantage of its significant property holdings and help fund priority projects, including new student housing, on-campus dining and a new engineering building.

With the master plan goals in mind, CU Denver reviewed its property portfolio and identified several opportunities to generate revenues—or monetize—its campus assets. One appealing approach was to create public-private partnerships (P3s), where feasible, to support major project development or renovations. P3s would provide opportunities to reduce university risk while creating revenue streams.

UC Denver’s initial focus was student housing—a critical element of the traditional on-campus experience. Following the portfolio review, CU Denver found an opportunity to monetize its off-campus, 250,773-square-foot, 685-bed Campus Village apartments and an adjacent parcel with a private sector partner. Located near public transit, the site would offer an attractive development opportunity for the private partner, along with a steady revenue stream from the in-demand apartments.

Next, CU Denver set out to secure a leading student housing developer/operator for a long-term partnership to support student housing options. We helped the university team evaluate different P3 transaction structures with different levels of risks and rewards to determine the best approach. Then, CU Denver was able to issue a solicitation and market the opportunities to attract competitive proposals from highly qualified housing developers.

The solicitation has three main objectives. One is to monetize the Campus Village Apartments and adjacent site through a sale or long-term ground lease to the private sector partner. Then, the proceeds would fund development of a new on-campus freshman residential hall and dining facility. Third, the partnership would require the private partner to provide high-quality operations and maintenance services for CU Denver student housing.

With the solicitation process underway, CU Denver is now evaluating and selecting a development partner and negotiating the P3 contract. The facilities team is also engaging its stakeholders to review potential uses for the Campus Village property and associated financial impacts.

As the student housing P3 gets underway, CU Denver is now finding additional opportunities in its real estate portfolio to advance the master plan. Next up: structuring P3s around a new engineering building and a legacy architectural program building with promising development potential on a highly valuable site. As CU Denver has found, a creative enrollment strategy takes a creative facilities approach, too.