Why Investing in Educational Institutions is a Smart Move
Plant a tree in a vacant space, and you may slowly watch the surrounding lot blossom with life. The same can be said when constructing real estate projects that benefit underserved communities in towns and cities across the globe.
While new construction is part of a thriving community, so too are educational institutions for the professional and economic development of each local community. Providing the resources and space for growing educational needs, from skilled labor to intellectual job roles, is imperative.
Global real estate trends and predictions are shifting due to politics, limiting the funding and enrollment incentives for smaller, public institutions. According to the American Association of Community Colleges, enrollment within community colleges has decreased since 2010. While researchers’ predictions run the gamut on the future of community college, they certainly have some odds in their favor.educta
But that’s where CRE professionals can ace the challenging arithmetic in calculating community college's unique equation. As the cost of higher education is expected to increase and the demand for some technical and training careers skyrockets by 2024, more community colleges may be a surprise asset for real estate pros and institutional investors alike. Here are three reasons CRE pros should consider investing in them, and how to do so.
1. Increase Job Creation And Business Partnerships
Local economies depend on businesses and jobs to remain stable. Investing in community college real estate means extending the opportunity for not just campus employment, but also large-scale job creation through nearby or on-campus business growth.
Community colleges have begun to partner with local and national businesses to draw people and revenue to their campuses. An IBM Education report found that 57% of industry and academic leaders think that increased partnerships are necessary for higher education improvement, and 56% think collaboration is necessary to develop curriculum. For example, community colleges should look to large-scale universities that frequently build and rent out commercial space to chain restaurants in or nearby campus buildings.
The Community College of Baltimore County partnered with Barnes & Nobles to manage its bookstores. In addition, outside vendors are employed on campus to provide childcare services while parents who are continuing their education are in class. Not only does this demand ongoing commercial real estate; it creates jobs and supports businesses.
One beacon of hope remains: the Community College Partnership Tax Credit, which connects local businesses with job-training programs. In fact, the most successful community college programs are those that offer associate degrees, which provide real-life training with local employers and industries. As local jobs increase local revenue, ultimately, investment in community colleges will revitalize hyperlocal housing and downtown markets.
2. Grow Assets With Emerging Technologies
Teaching in-demand fields, technical and skilled subjects requires continuous investments in technology and equipment. Real estate investors have the opportunity to create desirable and lucrative assets through proptech (property or real estate technology) that will lead to accessible and solution-oriented results. For instance, internet of things (IoT) infrastructure, cloud services and AI-driven features can create a foundational environment for future learning. Not only can students be hands-on; they can also connect with innovators in their field of study.
If community colleges can dare to try implementing new, emerging technologies in their designs, the value of their properties will rise, and so too will enrollment and usage of buildings in the community. It may be strange to think of community colleges as leaders in the implementation of emerging learning or training technologies, but because companies and universities are, thus far, slow to invest in them, these schools could lead the way. The reliance on a mixture of investors, local businesses, governments and community organizations to install these tools that can potentially help their cities thrive (and even bring new business and innovation into the community) can allow for a worthwhile if not long-term investment — and also reap steady returns and multiply business clients for real estate owners.
3. Promote New Collaborative Innovation Hubs
Since the country’s most successful community colleges often thrive via the partnerships they hold with local businesses, it’s crucial that innovation — or the quest for it — becomes a stable environment to develop students’ skills. In addition, innovation hubs can assist in a community college’s ability to provide improved performance and outcomes.
The profound impact of tech startups on today’s world makes community college real estate a more lucrative investment for communities and the CRE investors that help build them. Big data centers and tech hubs are trends that investors need to start looking into and implement near college campuses.
Arizona State University has already created a program through a partnership with a private Silicon Valley business, Draper University, to stir tech industry entrepreneurship through student programs designed to pitch their own tech startups. If community colleges can implement these data hubs as commercial space for tech companies, real estate investors can reap their fair share of the profits.
The key to building innovation hubs on smaller campuses is to create more than one-time destinations, turning the community college experience into a continued educational resource that provides upskilling and reskilling as the economy evolves. In addition to educational tech like online classroom learning, on-campus data centers that implement cloud services and big data technology can provide direct training and local business connections as part of a student’s curriculum. Big data portals and updates, along with AI machine learning, can help offer students the personalization and diversity they seek in their education. According to the California Community College system, this can also help students build their digital reputations and explore ways to verify non-classroom experiences.
Futurescape: Educate With Real Estate
Among the myriad of economic and social benefits, investing in smaller higher-ed institutions through REITs or other forms of investor financing can indicate long-term financial gains.
Where community colleges thrive, the potential for thriving cities and livelihood begins. By actively investing in small college institutions, real estate professionals can actively invest in communities, big and small.
Article Resource: Forbes