Surviving the Amenities Arms Race - Financial Modeling & Student Housing

Balancing Revenue and Liabilities – With enrollment in four-year institutions declining on a national basis, colleges and universities are often forced to compete for smaller cohorts. In recent decades, an “amenities arms race” has spurred colleges and universities to spend lavishly on new construction and renovation projects, leaving many in the red. According to a report by Bain & Company and Sterling Partners, “Institutions have more liabilities, higher debt service and increasing expense without the revenue or the cash reserves to back them up.” Moody’s Investor Services has taken notice in recent years, with credit downgrades affecting three dozen four-year colleges and universities between 2013 and 2014 alone.

Read Full Article

Author: Taylor Poole
Published: June 2018