- Part 1 – General Administration and Management
- Part 2 – Operations and Maintenance
- Part 3 – Energy, Utilities, and Environmental Stewardship
- Part 4 – Planning, Design, and Construction
Real Estate
Introduction
During the last half century, enormous expansion and growth have occurred in higher education. This expansion has resulted in a corresponding increased need for land and building space to support increasing enrollments and research activities. As the need to increase physical facilities has occurred, there has also been a need to acquire additional land and, in many cases, to acquire or develop buildings to support the growth demands.
The acquisition and ongoing management of new parcels of land and facilities have required many institutions to become more sophisticated in their basic real estate capabilities and to integrate their real estate functions into the facilities management and capital planning activities of their institutions. The acquisition of buildings and land should be considered as part of the overall facility development strategy of an institution. In addition, once a building or parcel of land is acquired, the facilities management organization will often be required to provide ongoing service and care of the new assets as they become part of the overall inventory of the institution’s physical plant.
The facilities management organization needs to work closely with the institution’s real estate office to help ensure that potential acquisitions are consistent with the institution’s long-term facility master plan. During the acquisition process, the facilities management organization needs to be involved to help provide a condition assessment of a potential real estate asset and the estimated cost of bringing that new asset to a maintainable level of service under the institution’s facility standards and code requirements.
An involvement in real estate management has become nearly universal for all colleges and universities. From time to time, almost every institution will need to conduct at least straightforward real estate transactions such as property acquisitions and sales, leases, or the negotiation of right-of-way easements or license agreements. Regardless of the mission of an institution’s real estate office, the real estate function needs to be highly integrated into the organization of the institution and aligned with the institution’s facilities management planning and maintenance organizations.
College and university real estate functions are organized and operated in a variety of ways. Many institutions have highly sophisticated and entrepreneurial real estate offices that are considered as important profit centers and produce considerable revenue to support other institutional needs. Other schools view real estate as a necessary support function but only in support of the institutional need to occasionally purchase a real estate asset or to lease space off-campus to support temporary shortages in their owned facilities.
In addition, institutions are turning to much more complex real estate activities as a means to provide a more creative financing tool for the development of needed facilities, realize income from idle or underutilized institutional property, perform an endowment investment activity, or achieve other institutional objectives.
This chapter reviews the basic strategies and issues related to managing institutional real estate, including consideration of real property acquisitions, leasing, and property management responsibilities. It also discusses how it is essential to consider real estate as part of the larger capital development strategy of an institution. Guidelines for developing a real estate function at an institution are provided as well as some of the essentials for the acquisition and disposal of property through purchase, sale, and exchange; development of agreements such as leases, easements, rights-of-way, and licenses; property appraisals and environmental assessments; and property management responsibilities. Additional information includes a description of the internal staff or external resources needed to carry out these activities and an overview of several of the innovative approaches for real estate investment and development activities currently being conducted by colleges and universities.