Higher ed property appraisal
Purchase costs and long-term maintenance make adding real estate assets an expensive proposition for colleges and universities.
Moreover, when institutions invest in off-campus properties, officials must also consider their relationships with nearby communities, as well as alumni and donors.
In addition, public institutions typically have regulations and state or federal policies to navigate.
To ensure they’re using resources prudently and meeting institutional needs, many institutional real estate directors turn to spreadsheets, government databases, and asset management or space management modules within an ERP or building management system.
Here’s how that technology is bringing institutional real estate strategy to the next level.
Using a mix of tools
When determining if a property might meet the needs of Arizona State University, real estate department administrators have accessed several low- or no-cost tools.
One is the Maricopa County GIS (geographic information system) Mapping Application, which is available online at no charge and offers aerial photos and information on each parcel’s size and zoning type, among other data, says Patrick Panetta, director of project management, university real estate development.
They also use a free version of LoopNet—a “commercially based Zillow,” he says—to research available commercial sites.
After completing initial research, they’ll typically work with several brokers to obtain more information on and visit properties—which are appealing primarily because the university needs more academic or research space.
ASU has on- and off-campus real estate valued at a total of $5.6 billion.
Got a tech story to tell? Present at UBTech 2019.
The university is rolling out a cloud-based software application to help manage leasing activity, Panetta says. Its custom reports will, for instance, identify the amount of vacant space or the occupancy rate in different buildings.
Leveraging ERP solutions
Another institution that has successfully leveraged a publicly available GIS database is UNC Greensboro. Over the past 10 years, the university has purchased about 55 acres to expand its perimeter, says Charles Maimone, vice chancellor for business affairs.
Developments include several new residence halls with a total of about 1,000 beds, a 200,000-square-foot wellness/recreation center, and 25,000 square feet of retail. About 20 of the 55 acres—valued at about $237 million now, including the facilities—remain undeveloped.
In making these purchases, Maimone and his colleagues used Guilford County’s publicly available GIS Data Viewer to identify potential properties and their values, among other information.
“We’re constantly tracking properties of interest and using the information to understand the conditions, ownership and more,” he says.
The GIS application helps establish a reference point for an anticipated sale price based on tax value. It also guides initial due diligence in identifying potential red flags, such as flood plains or deed issues.
Maimone enters new properties into the facilities ERP system, which holds the schematics and floor plans, among other information. Such information guides future property development.
For instance, a building that has been repurposed (by the institution or a previous owner) may have offices that are too big for the university’s purposes. These types of determinations guide future development.
Engaging third-party experts
Some institutions, particularly public ones, find success in hiring outside consultants who bring in their own technology to inform real estate decisions.
Kansas State University differs from many other institutions in that it doesn’t require freshmen to live on campus, says Derek Jackson, associate vice president of student life.
Since incoming students can choose to live anywhere, he adds, “We have to be market sensitive and promote our product in the market.”
“Getting a third-party analysis is required by the bonding agencies to make sure the bonds will be repaid. ... Basically, the market must be able to handle the cost of the project,” he says. State agencies also often ask for an independent assessment.
The consultants deploy proprietary tools to complete these analyses, Jackson says. For instance, a recent market study examined the demand for different amenities—say, one bedroom apartments versus two—among other information.
Jackson and his colleagues provided numerous data points, including census data and leasing information, which the firm fed into its analytics tools.
Another practice, while not requiring technology, helps Kansas State stay abreast of the local real estate market.
Several times each year, Jackson, along with his colleagues in campus housing, invite city and county planners, bankers, realtors, appraisers and others in the industry to meet and share information about the housing market. It’s like a local “think lab,” Jackson says.
Tracking current spaces
Technology can aid in tracking leases and managing space. While such platforms aren’t designed to guide real estate decisions, keeping tabs on properties already owned can fine-tune that activity.
For instance, some tools can help show how a facility contributes to student success through measures such as weekly student course contact hours or average hours per week of use, says Rob Berthelman, a principal at California-based architecture and design firm Steinberg Hart.
These products also can measure cost of operations, energy consumption and other metrics.
The main campus of Oregon Health & Science University, a public academic health center, is located on Marquam Hill in Portland. “Geographically, it’s challenging,” says Sara Vonde Veld, director of campus planning and real estate. The area is congested, and traffic is a big issue.
As a result, the university has expanded into South Waterfront, which is about 2 1/2 miles away by car or 1 mile by an aerial tram owned by the city and operated by the university.
“It’s allowed us to grow in an area that’s nice and flat,” Vonde Veld says. (Another campus of about 120 acres, which is approximately 30 minutes west of Portland, has less of a physical connection to the other campuses, she adds.)
For on-campus buildings, the university also uses a web-based platform that connects a space planning database to floor plans, providing square footage and other information, and acting as a “visual database,” Vonde Veld says.
As it moves into a community health care model, the university has begun leasing facilities of about 10,000 to 20,000 square feet from property owners around Portland. A GIS tool from a third party assists in efforts by mapping coverage areas of both its own and competitors’ clinics.
“We can get a visual of the market,” Vonde Veld says. The tool will layer on information about local freeway access, public transportation and other data. “We want to make it easy for patients to get to us,” she adds.
Spreadsheets help in tracking requests for space from different departments and incorporating them into the institution’s five-year building use strategy. This information will guide efforts to move some departments that don’t need to be located on campus, such as IT and finance, to outside areas.
At the moment, such decisions are based largely on knowledge of the departments’ functions. While Vonde Veld and her colleagues use visualization tools, such as blocking and stacking diagrams, to communicate these decisions to the relevant parties, “the reasoning and rationale is a manual process.”
Driving to a single source of truth
The University of California San Francisco occupies about 230 buildings, which span about 10.3 million square feet of leased and owned property and are mostly in the city. To manage these properties, officials had been using homegrown space management and lease administration solutions.
In 2015, the institution moved to a single third-party integrated workplace-management system for both, with several benefits, says Ritesh Khanna, director of space analytics. To start, his team no longer has to reconcile information between the two systems.
“When you create siloed systems, there’s no single source of truth,” Khanna says. The third-party system integrates with other enterprise financial and accounting systems as well, eliminating the need to manually feed in information.
Administrators can now track information such as building addresses, types of spaces and their dimensions, room numbers, and the entities assigned to each area. Information on trade-offs—say, one department has extra space that can be loaned to another—gets documented.
The university is connecting its GIS application to its workplace management system to create “a powerful multilayered perspective of our real estate portfolio,” Khanna says. This will allow for visual queries of interior and exterior spaces.
The ultimate goal: one view of the data that everyone in the organization agrees on and trusts, Khanna says. “It will empower us to get a unified view of our portfolio, infrastructure, facilities and assets to align our organizational goals and real estate strategies.”
No matter what tools they use, colleges can benefit by taking an all-encompassing approach to real estate decisions, says Chris Keller, vice president of client services with Archibus, which offers a platform that spans real estate, infrastructure and facilities data.
“Instead of thinking, ‘I have a real estate problem to solve,’ leaders need to think more holistically,” Keller says. “Ask, ‘How does this real estate solution support the aim of the university?’ ”
Karen Kroll is a Minnesota-based writer.