ECON 1101-Construction Development Financing; Instructor - David Boren

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Aug 16, 2012
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#1
https://www.barrons.com/articles/un...elopment-51568115000?siteid=yhoof2&yptr=yahoo

So they are coming up short $8 million per year.

Some math (apparently not taught at OU).

416 apartments at this development.
$13,000 annual rent for each unit
$5.408 million in rental income

40,000 SF of rentable commercial space
$15.51 current average lease rate in Oklahoma for commercial space
$620,400 projected income from commercial space rentals.

This is right at $6 million, yet they find themselves with an $8 million per year deficit.

Genius.
 

Boomer.....

Territorial Marshal
Feb 15, 2007
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#4
They've said student housing is an irreversible money pit for the university. Not sure why Boren kept building complex after complex instead of allowing private companies to come on campus.

I worked on a couple failed apartment complexes which were shut down at the city council level the moment Boren said no.
 

CTeamPoke

Legendary Cowboy
Jun 18, 2008
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#5
I want to make fun of them but the state is going to bail them out and that will be that.

Meanwhile, if this was going on in Stillwater it would be daily news in the paper and they would be calling to shutter the institution.
 
Jul 25, 2018
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#6
They've said student housing is an irreversible money pit for the university. Not sure why Boren kept building complex after complex instead of allowing private companies to come on campus.

I worked on a couple failed apartment complexes which were shut down at the city council level the moment Boren said no.
Who said student housing's a money pit for the university?

I ask because I spent 5 years in Residential Life at OSU when they were really cranking out student housing in the early 2000's. Under that arrangement, the construction company actually owns the physical structures (& built them for a 30 year lifespan, but that's another story....) & OSU owns the land they sit on.

Sure, you have your normal maintenance & wear & tear, but you've got to seriously mismanage it for them not to be profitable. Especially when you make every one of those kids buy a meal plan through campus.
 

Boomer.....

Territorial Marshal
Feb 15, 2007
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#7
Who said student housing's a money pit for the university?

I ask because I spent 5 years in Residential Life at OSU when they were really cranking out student housing in the early 2000's. Under that arrangement, the construction company actually owns the physical structures (& built them for a 30 year lifespan, but that's another story....) & OSU owns the land they sit on.

Sure, you have your normal maintenance & wear & tear, but you've got to seriously mismanage it for them not to be profitable. Especially when you make every one of those kids buy a meal plan through campus.
Not sure where I read it, but there were articles going around when Gallogly was brought in to clean up Boren's mess. Boren had gone full steam ahead constructing new dorms and renovating old dorms. All the while having a high occupancy rate despite requiring all freshmen to live in the dorms.
 
Aug 16, 2012
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#8
Not sure where I read it, but there were articles going around when Gallogly was brought in to clean up Boren's mess. Boren had gone full steam ahead constructing new dorms and renovating old dorms. All the while having a high occupancy rate despite requiring all freshmen to live in the dorms.
And therein lies part of the idiocracy with this development. It is geared toward upper-year and grad students. By the time I was a junior, I only knew of a handful of people who still lived in the dorms.

I posted this because it was an easy jab at OU. But in all fairness, this nonsense happens everywhere. I was at Prairie View A&M at the beginning of the year to look at their two primary dorm complexes for investors. Roughly 1400 doors (units) and over 3500 total beds across something like 40-50 buildings. Occupancy rate was about 40% and the A&M University System was pumping millions upon millions into them...because they had the money and had to spend it somewhere or lose it.