Under Pressure, Higher Ed Leans On Real Estate
The co-chair of Herrick's Real Estate department, Jonathan Adelsberg, was quoted by Law360 Real Estate Authority discussing how higher education selling or otherwise monetizing their real estate assets to try to stabilize their finances. As higher ed contends with declining enrollment, in addition to federal funding cuts and the question what to do with underutilized space, some are finding creative ways to monetize real estate assets
To make the most of colleges and universities' tax exemption in leasing deals, Jonathan said a leasehold condominium structure is often used. Instead of a college or university renting space on a property whose landlord pays property taxes and passes a portion along to tenants, a building can be "condominiumized" in favor of the tax-exempt educational institution for a period of time, usually 30 years.
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