Page 7 - College Planning & Management, January/February 2019

2019 FACILITIES & CONSTRUCTION BRIEF
EDUCATIONAL CONSTRUCTION SPENDING
The total dollar value of education construction work done in the U.S. (including all 50 states and the District of Columbia) is estimated to have exceeded $98.9 billion in 2018. That is a 9-percent increase from the actual amount spent on education con- struction in 2017.
CAPITAL INVESTMENT IN REVIEW: MORE DATA
The amount of capital investment dedicated to existing campus facilities by North American colleges and universities reached an 11-year high in 2017, according to a new report from Sightlines, a Gordian company.
The sixth annual “State of Facilities in Higher Education” report found that total capital investment into exist-
ing properties on college campuses reached nearly $5 per gross square foot in 2017. This caps a steady climb that began in 2011 and is the highest figure recorded since 2007.
The report also identified a po- tentially challenging trend for college facilities managers. A deep dive into the ages of existing buildings on hundreds of campuses indicated the coming need for major capital investments.
Other notable trends identified in the report included:
• Campus expansion continues
despite declining enrollment —The educational landscape has become increasingly competitive in recent years, causing institutions to double down on the construction of new facilities. This strategy may pay off for research institutions (14 percent increase in space, 16 percent increase in enrollment since 2007), but it will likely leave many masters institutions
(17 percent increase in space, 4.5 percent increase in enrollment since 2007) with swollen campus footprints and declining tuition revenues to cover the costs.
• College debt continues to pile up — With enrollment revenues, endow- ment support, and state funding
all on the decline, institutions have financed their capital investments
by borrowing money at low interest rates for the past decade, compound- ing existing debt issues. Total debt funding (more than $41 billion in 2016, according to The Atlantic) may prove harder to service if interest rates continue to rise.
• There’s no stopping the backlog — Despite positive capital investment trends, funding is unable to keep pace with the mounting list of project needs. Backlogs continue to grow and significantly impact campus opera- tions and the overall experience of students, faculty, staff, and guests.
The report is based on comprehen- sive data collected and analyzed by Sightlines (www.sightlines.com) from more than 360 college and university campuses annually, which collectively operate more than 52,000 buildings that serve 3.5 million students.
YEAR
TOTAL
(Millions of Dollars)
2004
$ 74,251
2005
$ 79,687
2006
$ 84,929
2007
$ 96,758
2008
$ 104,891
2009
$ 103,203
2010
$ 88,405
2011
$ 84,986
2012
$ 84,673
2013
$ 79,059
2014
$ 79,681
2015
$ 83,518
2016
$ 91,953
2017
$ 90,734
2018
$ 98,891
Educational construction spending includes expenditures for new buildings and structures, additions, renovations, rehabilitations, major replace-
ments (such as the complete replacement of a roof or heating system); mechanical and electrical installations; site preparation and outside con-
EDUCATIONAL CONSTRUCTION
struction of fixed structures or facilities such as sidewalks, parking lots, and utility connections. Educational facilities include preschools, primary/
secondary schools, higher education facilities, trade schools, training facilities, and other educational spaces including museums and libraries.
EDUCATION CONSTRUCTION (Millions of D[oMllaris)llions of Dollars] $110,000
$100,000 $90,000 $80,000 $70,000 $60,000 $50,000
Source: U.S. Census Bureau
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
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