Universities have always been anchor institutions, large landowners and significant economic drivers. They stay put, encourage business and residential developers to put down roots to supply faculty and student needs and they generate tremendous commerce.
Now that government/public money is and/or has disappearing/disappeared, shifts in the economy and academia have left universities to seek new financial partners. Enter startups and tech firms. (Just look at what has happened to Seattle’s housing market and its university systems when Microsoft and Amazon moved in.)
The Brookings Institute studied the relationship between universities and startups in 2017. It found that companies the once left fled downtowns to suburbs are flocking back to downtown city centers. Population is rebounding. Real estate values are appreciating.
In fact, universities are now the largest employers in 2/3 of America’s 100 largest cities. They employ 4M people and they spend $43B/year.
Universities are shifting their real estate focus from expanding residential space into “place making” and economic development. “Place making” is more inclusive than residential space…it involves single-family housing multi-family, community schools and community workers, commercial and service providers and satellite campuses that are case studies of university-led urban development. For example, the University of Pennsylvania’s West Philadelphia Initiative shaped an entire neighborhood complete with employee housing.
Other examples include the self-styled innovation hub and tech district in St. Louis called Cortex. Drexel University plans for a multi-billion dollar development WITH HOUSING. Arizona State University and its recent biomedical campus expansion into Phoenix has made downtown Phoenix the place to live (as the condo prices and apartment rentals reflect.) Johns Hopkins University is affecting an 88-acre new expansion into Baltimore with ancillary residential real estate opportunities.
Bottom line, real estate agents…. go and/or go back to school to find out what opportunities you can cultivate as universities and startups change the face of urban real estate where you work.
