JLL’s David Carlos: 5 Questions

There’s an unfortunate reason why universities are selling off or adapting parts of their campuses, but David Carlos is there to help them make the most of a tough situation.

Since leaving his professional home of 16 years at Savills in September 2023, Carlos, JLL’s vice chairman and head of nonprofit, education and government practice for the New York tri-state area, has been working on deals for higher ed institutions to traverse a future with dramatically fewer students.

Carlos has been helping the College of St. Rose in Albany, N.Y., through its bankruptcy disposition in which a number of buildings were sold to Albany County, which plans to turn them over to a local charter school. His team is also marketing the sale of Bard College’s former Simon’s Rock campus in Great Barrington, Mass., spanning 275 acres.

But it isn’t all bad news.

Carlos’s team advised Hebrew Union College in its $32 million acquisition of the First Battery Armory at 56 West 66th Street after the college unloaded some property at 1 West Fourth Street to New York University for $75.5 million. His team also worked on Weill Cornell’s acquisition of a leased building on East 74th Street.

This interview has been edited for length and clarity.

Commercial Observer: What’s driving all the recent movement in the market around university campuses?

David Carlos: Demographics are shifting in such a way where there just aren’t going to be as many high school kids graduating and enrolling in college. Overall, nationally, we’re seeing projected over the next 15 years about a 13 percent decline. Depending on the state, it could be even more severe. In New York, I think that stat is going to be in the mid-20s, 23 to 24 percent.

How are universities liquidating assets or shifting their portfolios?

Not all of them are looking to liquidate assets. It really depends on their current situation. We’re helping all different types of colleges and universities that are being affected a little differently. 

So I would say that the commonality across all of them, regardless of size of endowment or student enrollment, is really that they’re trying to optimize their portfolio. We’ve been hired even in the last 12 months by nine different colleges and universities that really are trying to streamline and trying to make sure that they’re utilizing their assets as much as possible. How well are they utilizing classrooms? How well is every dormitory bed fully occupied? What’s their work from home policy? Are they still at two days a week, three days a week? What does that look like? Are they utilizing their administrative spaces? What do student-centric spaces look like? Student lounges, different types of athletic facilities — the schools are really taking a hard look at a very granular level to see which spaces perhaps aren’t being fully utilized, and can those be repurposed? 

Who is buying college campuses, and what are buyers doing with the space?

Every situation is different. In the case of the College of St. Rose, it was actually the County of Albany that was the ultimate purchaser. This was 27 acres and a million square feet in Downtown Albany, surrounded by residential communities, so they wanted to make sure that the neighborhood was going to continue to thrive and not go into disrepair. 

They’re now looking at different types of workforce housing to stabilize that community. The county also moved its offices into one of the buildings. It looks like the University of Albany is going to be buying one of the big dormitories.

How could Bard College’s almost 300-acre campus in Great Barrington be adapted?

The leadership of Bard was actually really, really smart. Starting a few years ago, they knew that they were going to vacate the property, and they bought an additional campus near their main campus, which is in Annandale-on-Hudson. They moved this program to that location. 

They knew that this real estate was going to be excess, so they started working with the Town of Great Barrington to get some more flexible zoning that allowed a number of different types of uses and their benefits. Because it’s a nonprofit, it’s been off the tax rolls for decades, and more flexible zoning increases the likelihood that it’ll be mixed-use or some component would actually get on the tax roll.

We always counsel our clients to be as proactive as they can be. This was a really smart, strategic move by Bard because they got out in front of it. So, whatever proposals a potential developer might have are already going to be as of right because of this zoning.

I assume they do this for ease of the sale, not to drive down the price?

It may drive down the price. It definitely affects timing. The biggest thing that it affects is certainty. That’s really a big component here because you have to go through all the levels of getting approval from leadership, getting approval from the board of the college or the university. 

And, so, you’re building a lot of consensus to hopefully get something done, and to have that be contingent upon some discretionary approval by a third party is really difficult to manage. If you know that hospitality, single-family residential and some other uses are already as of right and approved, it makes that process much, much smoother.

Mark Hallum can be reached at mhallum@commercialobserver.com.