Opportunities for Social Infrastructure P3s (Yes, Including Colleges and Universities)

Earlier this summer, Plenary Properties Merced completed construction on the well-known UC Merced 2020 campus-expansion project—a $1.2-billion, 1.2-million-square-foot social-infrastructure P3 that has been called the largest social infrastructure completed in the United States to date. The project was completed on time and on budget (with fortuitous timing based on the need for additional space to comply with social-distancing guidelines), and is a dramatic example of what can be achieved under the P3 model for colleges and universities, and for social infrastructure more generally, in the United States. The Miami-Dade County Civil Courthouse P3, which was also awarded to a Plenary-led team, reached financial close this January, and several other social infrastructure projects are currently in the pipeline, including another new courthouse project, in Clackamas County, Oregon (RFQ estimated Q1 2021), and numerous university energy and utility projects. 

College campuses are, of course, heavily impacted by the COVID-19 pandemic, and now may not be the time to launch a new student-housing project, or a campus expansion, or perhaps anything transferring revenue risk. However, even before the pandemic, many colleges and universities had begun to shift towards virtual instruction and other alternative instructional models. As a result, higher-education infrastructure needs are changing, and even if many schools will not require more physical classrooms or housing, they will still require new infrastructure development. In some cases this means downsizing a campus so that excess land can be redeveloped or liquidated (essentially a reverse UC Merced 2020). COVID-19 did not create the movement away from on-campus instruction, but it is accelerating it, and new development opportunities in this space should be expected to follow.