Stepping into the real estate market

As development surrounding Wilfrid Laurier University continues to thrive, the university is looking at ways to grow its portfolio and maximize the benefits of growing private sector development. The university is approaching the issue of space and money by hiring a new executive director of real estate and property management who will be responsible for building and managing a portfolio of real estate holdings in order to change the financial landscape of Laurier on a long-term scale.

This is the first position of its kind at Laurier, as part of a strategy to stabilize the financial pain of the recession, and to produce profit for a growing university.
“We’re landlocked,” said Jim Butler, Laurier’s vice president of finance and administration. “We need to be able to control our future as we move forward.”
Butler explained that the university faces a unique challenge in such a small location, contrary to the University of Waterloo which has many real estate holdings.

“The land development around the university, I mean, have you looked? It’s just extraordinary what is taking place. If we’re not careful we’re going to get boxed in,” he said. “We need to be very strategic with what we do with respect to real estate, probably more so than other universities.”

While space grows to be an issue, the most imminent problem facing the university arguably is financial growth.

“The university is also at a point where it has reached its borrowing capacity, so unless we develop an organization which takes a different view of how real estate is approached, we’re going to be constrained,” said Butler.

Butler mentioned the idea came from seeing other higher education institutions in British Columbia, namely the University of British Columbia (UBC). UBC has an operating budget of over $1.4 billion and receives a continuously large portion of its funding from its private company UBC Properties Trust, which manages and acquires real estate holdings. Currently, Laurier has a budget of around $350 million but faces serious financial constraints due to pension commitments and debt.

“This is an effort to change our thinking about how we manage real estate,” Butler explained. “Instead of letting all the profits take place in the private sector, the university is going to profit from that. We can then control our destiny a little bit more in the future. It’s more of a long-term strategy.”

By creating partnerships with developers and the City of Waterloo, Butler hopes the new executive director will build long-lasting relationships that will provide the university with a long-term yet non-traditional solution to what is currently a pressing issue.

“We would be trying to control our vicinity. For example, rather than have the private sector do that we could organize a partnership arrangement that would see us co-owning or have a interest in developments in our environments,” Butler said.

Developments could include parking lots or a small commercial space such as a pharmacy. Butler said these developments could be specific to students but the community as well.

“When there’s lots of real estate activity in your area, it helps you to control how the development takes place rather than let the private sector do it. We want it to meet our needs rather than the private sector,” he said.