Colleges and universities are always expanding; that is part of how they stay competitive. However, lately universities are taking advantage of bargain prices on properties and buying big – even if they do not have clear plans for the purchase. For example, in 2009 the University of Dayton purchased 115 acres of land for $18 million, while the University of Delaware bought 272 acres from Chrysler for $24 million. While some universities consider this type of investing nothing more than giving “future generations the ability to create their own university,” analysts fear that colleges banking on the real estate market being at the bottom could pay a hefty price in the future.
Colleges and universities were largely “shut out” of the real estate boom, say experts, which has forced universities like Columbia in Manhattan to invest in property wherever it could. However, the attractiveness of an Upper West Side location can be relied on – even in tough economic times – whereas finding a use for more rural purchases could be difficult, and in the meantime the universities will have to pay for the maintenance and development of those areas.
Regardless of the wisdom of the strategy, the fact remains that colleges and universities are buying up real estate wherever they can find it, now more than ever before. Would you be happy about it if your child’s school or your own university sunk a large sum of money into a land purchase without a detailed strategy?
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