Innovative approach will add nearly 4,000 beds to nine campuses and ensure that student housing is "like new" at the end of the 65-year partnership
Cary, NC (May 14, 2015) — Corvias Campus Living, a wholly-owned subsidiary of Corvias Group, today announced that it has successfully secured $548.3 million in private financing to fund the initial phase of an innovative public-private partnership (P3) with the Board of Regents of the University System of Georgia (USG).
Under the terms of the 65-year partnership, Corvias Campus Living will significantly improve on-campus student housing at nine of the USG's 30 campuses, including the development, construction, management and long-term maintenance of 3,753 new beds and 6,195 existing beds. This agreement marks the first time that a state system has privatized student housing across a portfolio of campuses.
"The USG is to be commended for taking such an innovative approach to improve their student housing," said Kurt Ehlers, Managing Director of Corvias Campus Living. "The customized solution that we developed will allow the USG to defease approximately $300 million in existing debt and build the new 3,753 beds without incurring additional debt. Ultimately, this will directly benefit students by keeping housing updated and affordable while allowing the schools to focus on their core mission of education."
Over the life of this partnership, the ground rent, contingent rent, retained services, and reinvestment fund returned to the BOR will be in excess of $8 billion. Another feature of this long-term approach is that every bed will be renovated and/or replaced multiple times during the partnership, returning all assets to the campus in new or like new condition.
"About 70 percent of student housing nationwide is more than 25 years old, and most of it hasn't been properly maintained" explained Ehlers. "Establishing a reinvestment reserve solves that problem by providing funding to ensure that student housing is in as good condition at the end of a long-term partnership as it was on the day it was built."
Unlike traditional developers, who typically retain a large share of cash flow for profit, Corvias earns only negotiated, performance-based, fixed fees. This mutually aligns partnership interests and allows Corvias to return any additional cash flow to the reinvestment reserve where it benefits the campus. In addition to contingent rent, Corvias pays a retained services fee to support the campuses as they continue to manage residence life services such as social and educational programming, security and room assignments.
According to Ehlers, USG students at all nine campuses will begin enjoying improved student housing as early as the Fall semester. The partnership includes at least $6.3M of up-front funding for capital repairs and renovations on all residence halls during the first year and Corvias has already broken ground at six USG campuses for the new housing.
In order to retain the unique architectural features and cultural aspects of each campus, renovation and new construction designs have been tailored to meet the needs of each of the nine USG schools. Care has been taken to design flexible spaces that encourage student engagement and provide affordability without sacrificing quality.
As part of its longstanding commitment to giving back to the communities in which it lives and works, Corvias has already hired eight Georgia-based architecture, engineering and construction firms to assist with the USG student housing program, and will seek additional subcontractors.
Nationally, Corvias' portfolio extends from Alaska to Florida with more than 26,145 units and 82,807 beds owned and operated across nine states on more than 16,577 acres. The company's student housing division, Corvias Campus Living, was established in 2012 and is based in Cary, North Carolina.
About Corvias Group
Corvias Group is a privately-owned company that strives to tackle tough, large-scale challenges through trusted partnerships that put client interests first; focus more on performance than profit; and, produce sustainable long-term solutions. Three business divisions deliver our mission of Living Made Better – Corvias Military Living, Corvias Campus Living and Corvias Solutions. We work on behalf of the U.S. military, colleges and universities, and public sector agencies to develop tailored solutions that remedy some of America's most challenging deficiencies in infrastructure and facilities caused by chronic underinvestment. All Corvias Group companies are governed by three core principles: Be the best provider of service; be the best place to work; and, generously give back to the communities where we live and serve. Corvias (kor-vee-us) Group is headquartered in East Greenwich, R.I. www.corvias.com