Space utilization, tech, outsourcing — universities will look to FM for added value and cost savings in 2018, finds JLL

by Brianna Crandall — January 8, 2018 — Facing the dueling pressures of delivering a high-quality, high-tech campus experience while reducing costs, US higher education leaders in 2018 will look to campus facilities as a source of added value and savings, say experts from global professional and real estate services firm JLL. From using energy and space more efficiently to tackling deferred maintenance and outsourcing facilities management (FM), colleges and universities are taking a fresh look at their facilities.

David Houck, co-leader of JLL’s Higher Education practice, stated:

With tech-enabled classrooms and connected living and gathering spaces, campuses are evolving to provide today’s students with the wired experience they expect. It has been widely publicized that higher education institutions are also experiencing significant financial pressures. As a result, some are rethinking how they plan, deliver, manage and maintain their facilities because facilities are second only to personnel in campus expenditures.

Declining revenues from tuition and public support, coupled with aging facilities and rising pension liabilities, mean all colleges and universities are looking to the private sector for ideas. Houck continued:

We’re seeing more chief business officers being hired from the private sector rather than academia. These executives are opening the door to fresh thinking about outsourcing strategies and looking at facility management and public-private partnerships as a means of filling funding gaps.

Five campus facilities trends to watch in 2018

Houck and Higher Education practice co-leader Kevin Wayer​ predict five trends that will shape real estate and facilities in higher education in 2018:

1)     Smarter space utilization will rule the day. As teaching delivery models have evolved, so have the spaces needed for learning. A traditional lecture hall, for example, may sit empty while professors hold court in smaller classrooms that facilitate collaborative and interactive learning. No wonder many public and private universities are using space utilization studies. Why build new facilities when you could use existing space more effectively? Wayer remarked:

Brand new facilities can help “sell” a campus to students, and some donors like the opportunity to leave a lasting legacy on campus. However, stretched resources and the drive for cost-efficiency mean institutions have a greater appetite for repurposing under-utilized spaces.

2)     Outsourced FM will become increasingly top of mind. In the hunt for savings, college and university business officers are looking closely at how their facilities are managed. More institutions are exploring how out-tasking and outsourcing FM can unlock savings while creating a more vibrant campus community. They’re also taking a close look at energy efficiency as a means of reducing costs while delivering on sustainab​​ility goals important to trustees, professors and students.

3)     Technology will be leveraged for new real estate efficiencies. One way to uncover potential savings in campus facilities is to analyze how buildings are used and how efficiently building equipment is operating. Using data and insights tools created specifically for facilities, higher education institutions can identify opportunities to reduce energy waste, expedite work orders, extend equipment life, or even gain the advantage in lease negotiations. ​Wayer added:

Universities have a ton of data, but it’s not typically aggregated in a way that allows them to assess opportunities for savings. Today’s data and insights tools can translate the data generated from university real estate operations into actionable insights that more than pay for the technology investment.

4)     Higher education facilities managers (FMs) will prepare for the campus of the future. The tech-enabled campus of the future can only become a reality if universities have skilled people to manage smart building technologies and analyze the treasure trove of data coming from sensors and other connected devices. To close the skills gap, universities are investing in education for their FM teams. More campus FMs are attending educational seminars and conferences organized by the International Facility Management Association (IFMA) and APPA, as well as in-house training. The end goal? An FM team that’s comfortable using the latest building technologies to drive efficiencies on campus.

5)     Institutions will seek alternative ways to finance a broader range of new construction and renovation projects. Interest in public private partn​erships (P3s) is growing as both public and private higher education institutions look to fund new developments without tapping public debt. Traditionally used for student housing projects, P3s are becoming more widely adopted for other types of developments. Houck added further:

Schools have seen the broad success of student housing projects established through P3s. Now they are looking at how this funding and operating structure can be used to realize other campus and off-campus projects, from academic facilities to mixed-use commercial projects and parking garages. Students, faculty and administrators alike want their campuses to be sustainable, tech-friendly, vibrant communities. As we look ahead to 2018, one thing is certain: colleges and universities are searching for creative solutions and partnerships to help realize their goals for the student experience and campus transformation.

JLL’s Higher Education practice partners with public and private universities, as well as university health systems, to help fulfill their missions through the stewardship of real estate. The group taps the unrealized potential of real estate to produce cost savings, improve financial strength, manage risk, and improve the overall student experience. JLL has provided a broad range of services for more than 200 colleges and universities throughout the world, encompassing: brokerage, project and development management, sustainability solutions, public-private partnerships, FM, and master planning. JLL’s expertise includes student housing, athletic stadiums, gateway and innovation projects, science and research facilities, parking garages, continuing education, hospitals and international campuses.