Several developers are handling purchasing, leasing and construction of dormitory buildings in the city, a job usually done by the postsecondary schools themselves.
Dormitories fit more tenants in a given space than apartments – and universities can save money by outsourcing the job of developing the facilities. But developers have also been criticized for constructing dorms as a tactic to circumvent zoning rules and build double the size of a typical apartment complex.
SL Green, the Harel Group and Wharton Properties jointly built a 23-story Pace University residential hall at 180-182 Broadway, which opened in August. TD Bank and Urban Outfitters are slated to move into the ground-floor commercial condominium space in the building this year.
SL Green also teamed up with the Harel Group and the Naftali Group to develop a 34-story Pace dormitory at 33 Beekman Street. Both buildings are leased to Pace for 30 years.
Magnum Real Estate Group and 40 North Properties are developing a new 146,000-square-foot, six-story dormitory building for the School of Visual Arts at 407 First Avenue in Kips Bay, The Real Deal reported earlier this week. The $90 million project will include 11,000 square feet of retail space.
But the choice to build dorms may be yet another way developers have found to make their financial calculus pencil out in the face of skyrocketing land prices, according to the New York Times.
“You’re putting four people into spaces that are usually for one or two,” Robert Knakal of Massey Knakal Realty Services told the New York Times. “So on a cost-per-square-foot basis, you’re getting pretty high rents.” [NYT] – Mark Maurer