Author Archives: Scott M. Helfrich, D.Ed.

About Scott M. Helfrich, D.Ed.

I am a higher education professional with over 20 years of full-time university student affairs experience. I earned a doctorate (D.Ed.) in higher education from Penn State University and am the Principal Owner of Helfrich Advisory Services, LLC.

COVID-19 Solutions: Virtual Building Tours – Vivid Media

The pandemic has certainly affected student housing business operations across the globe in many unprecedented ways. One crucial process that has been impacted is the campus tour. Admissions and housing departments alike need to develop alternate marketing strategies to showcase key campus facilities for prospective students and their families. A 2017 report by APPA – Leadership in Educational Facilities notes that “Students are deeply influenced by their first impression of a campus; multiple surveys of college-bound students point to the campus visit as the most significant factor in choosing an institution.”

Being able to showcase your facilities, particularly student housing, will help you to meet your recruitment and retention goals. Virtual tours of campus facilities are a smart and economical way to allow prospective students and their families to get a “first look” without actually stepping foot on campus. Because my campus was planning on pausing in-person tours of the residence halls due to COVID safety measures, I partnered with Vivid Media to develop an immersive, virtual tour experience for current and prospective students to view residence hall room options.

Through this platform, students and their families can explore the residence hall rooms in more detail to see the various amenities and conveniences that are offered. The virtual tours feature each building with the option to explore each room type as well as the common areas, including study lounges, recreation rooms, kitchens, and laundry rooms. In each specific building tour, visitors can click into a menu in the upper left-hand corner of the viewer to choose what type of area they would like to explore. Each room type and area is specifically listed. Additionally, there are four different viewing options to use, including the following: Explore 3D Space, Dollhouse View, Floorplan View, and Measurements. These options can be toggled by clicking on the corresponding icons on the bottom left-hand corner of the viewer. Hovering over each icon with the mouse arrow will indicate what each icon represents. The menu options will change dependent upon the current view that is showing.

Explore 3D Space | Dollhouse View | Measurements

Dollhouse View | Floorplan View | Measurements

Explore 3D Space

In this view, you can literally explore the area by clicking and progressing throughout the room as if you are actually there. Also, if you left-click and hold on the mouse, you can spin the view in all directions. The faint circles on the floor indicate the vantage point from that particular spot.

Dollhouse View

The Dollhouse View permits you to view the areas as if it were an dollhouse model. Again, if you left-click and hold on the mouse, you can spin the view in all directions. This is beneficial because it gives you a sense of the spaciousness of the room.

Floorplan View

The floorplan view gives you a simplistic overhead shot of the room that is being explored. This view can be used in conjunction with the “Measurements” option to manually click on any two areas to take a measurement. This is helpful so students and their parents can make measurements of the rooms for various furnishing and decoration considerations.

The process of working with the Vivid Media staff was easy and pre-planned prior to their coming to campus to film the dozens of different residence hall areas. My staff decorated each of the suite rooms and bathrooms ahead of time so that they were fully cleaned and prepared for Vivid Media to film. The actual filming process took less than one full working day, and I worked with their team afterward to develop the link naming conventions for each of the particularly buildings and associated suites and common areas. Once the virtual tours were completed, I was able to simply add the links to our existing housing webpage so that visitors can easily access each building’s tour.

To find out more about Vivid Media and to view examples from their student housing portfolio, visit

Helfrich Advisory Services, LLC is a boutique consultancy that specializes in college and university Housing Operations and Residence Life development, including the public-private partnership (P3) market. With 20-years of professional experience, my mission is to be a leading provider of affordable and practical solutions for the college and university student housing industry.

Effects of COVID-19 on the P3 Student Housing Industry

Those of us in the student housing profession have been facing complicated challenges because of the COVID-19 pandemic. With campus closures and the rapid pivot from face-to-face to remote learning, students were required to vacate campus housing communities to comply with directives coming from various state governments and associated educational agencies. As a result, multitudes of institutions also refunded various student fees, including housing and dining charges. This posed a myriad of systemic implications for student housing public-private partnerships (P3) given the complexity of the business relationships that exist with this type of arrangement. While universities with wholly owned housing portfolios will certainly suffer the effects of refunding millions into tens of millions of dollars for housing fees, universities with P3’s, on the other hand, will face unique financial and operational challenges.

Because of the various entities that are involved in a student housing P3, the effects will not simply be confined to a campus to manage. Between ownership entities, operating firms, investors, underwriters, and various campus departments, there will plenty of shared distress to go around. In some cases, the host university has picked up the bill for refunds given to students mandated to vacate while in other cases the project itself may dip into their own reserves to cover this.

The Downside

S&P Global and Moody’s Investors Service have already negatively downgraded the outlook for multiple privatized student housing projects given the precarious situation that colleges and universities will face with the challenges of paying debt service. The uncertainty with how the 2020-21 academic year will play out adds to the situation as institutions that decide to go to fully remote will quickly put P3 campus projects in financial risk. Financial stress will still occur even if there are plans to open, but with decreased occupancy to conform to social distancing standards. Given the partnership dynamics that exists, any direct and / or subordinate personnel expenses will be negatively affected resulting in the potential for position layoffs. Additionally, any net revenues contributed to the university will essentially be eliminated should debt covenants not be met. This will have ripple effects throughout the institution as those funds are utilized for operational expenses, discretionary projects, and even student scholarships that feed a recruitment and retention strategy.

The Upside

Privatized housing that offers apartment-style housing in most cases is more suited to accommodate the types of conditions for prevent the spread of COVID-19. Apartments with single bedrooms, bathrooms, and full kitchens can easily house two to four students each unlike large residence hall buildings that can house dozens to hundreds of students on a single floor. Universities that have P3 arrangements with affiliates with apartments are better positioned to permit students to remain with a certain level of social distancing that can not necessarily be accommodated elsewhere. Additionally, institutions that do not panic with occupancy management decisions and responsibly balance business operations with CDC guidelines will certainly weather the storm quicker.

The Outlook

Given the ability for the higher education industry overall to bounce back from the pandemic financial crisis, analysts are relatively confident that student housing will get back to normal from a cashflow, construction, and credit standpoint. P3 projects are typically positioned to have reserves that can help to alleviate short-term financial distress. Also, given that the universities will typically step in to help with a short-term emergency, the outlook is even more encouraging. Seeing the hope for a vaccine on the horizon, the stress on P3 communities is temporary and should not extend over the course of multiple years.

Helfrich Advisory Services, LLC is a boutique consultancy that specializes in college and university Housing Operations and Residence Life development, including the public-private partnership (P3) market. With 20-years of professional experience, my mission is to be a leading provider of affordable and practical solutions for the college and university student housing industry.

Understanding Debt-Service Coverage Ratio (DSCR) for Student Housing

A very important concept that is inexorably tied to student housing financing is the Debt-Service Coverage Ratio or DSCR. Not only must college and university chief financial officers understand this, but all senior housing officers should also know what this is as well in order to fully appreciate the financial requirements and ramifications that come with borrowing money in order to develop, construct, and operate new student housing. This post will explain the basics behind the Debt-Service Coverage Ratio and how it impacts that day-to-day operations of managing student housing communities.

Investopedia defines the debt-service coverage ratio as follows: “…the debt-service coverage ratio (DSCR) is a measurement of the cash flow available to pay current debt obligations. The ratio states net operating income as a multiple of debt obligations due within one year, including interest, principal, sinking-fund and lease payments.”

While the definition may sound complicated, the DSCR is essentially an annual calculation that illustrates whether or not you have enough funds to cover the payments for the money you borrowed. When an institution borrows millions upon millions of dollars to construct new student housing, the lender needs reassurance that the project is financially healthy enough to make the required payments on the debt (i.e., debt-service). Just like any loan, there is the expectation that the money borrowed will be paid back by the agreed-upon terms (i.e., length of loan, interest, etc.) In this particular case, because it’s a real estate-based transaction, the lender uses a DSCR test as a means to set a benchmark for what is acceptable from a cash flow standpoint.

One important distinction, however, is that the lender expects a project to be more financially successful over simply just earning enough money to cover the debt payments. They want to see that a project is operating prudently so that there is enough money remaining over and above the annual debt payment amounts. A student housing project that is essentially living “paycheck-to-paycheck” (or not even to that level) is a huge financial risk, which lending institutions attempt to avoid. Having sufficient cash flow permits the ability to make the principal and interest payments, pay for operational costs (e.g., personnel, facilities maintenance, etc.), set aside funds for capital projects (i.e., building and property improvements), and still have some money remaining.

Therefore, a lender will typically require an annual debt-service coverage ratio (DSCR) of 1.20, which is generally a national industry standard. This means that, overall, the income must be 120% of what the annual debt service requirements are. This extra amount up-and-above the debt-service is essentially a buffer. Understand that the lender does not keep this extra amount, but simply uses this as a annual requirement to make sure that the administrators of the housing project are managing it soundly. The borrower must illustrate annually what the DSCR is via required financial statements and budgets provided to the lending institution.

The DSCR is calculated in two different steps: 1.) First, subtract the operating expenses from the revenue earned to obtain the Adjusted Income; and 2.) Second, divide the Adjusted Income by the Debt Service Requirements to calculate the Debt-Service Coverage Ratio (DSCR). Let’s look at a successful theoretical calculation from a fictional 400 bed student housing community. Please note these numbers are just for illustration’s sake:

Revenue Earned – Operating Expenses = Adjusted Income

$2,400,000 – $1,200,000 = $1,200,000 Adjusted Income

Adjusted Income ÷ Debt Service Requirements = Debt-Service Coverage Ratio

$1,200,000 ÷ $1,000,000 = 1.20 DSCR

As you can see, this fictional student housing community meets the 1.20 DSCR test. In this particular case, they are exactly meeting the mark for what is financially required. 

Now let’s look at the same 400 bed, student housing community, but reflecting less income earned (i.e., lower student occupancy), but the same level of operating expenses:

Revenue Earned – Operating Expenses = Adjusted Income

$2,250,000 – $1,200,000 = $1,050,000 Adjusted Income

Adjusted Income ÷ Debt Service Requirements = Debt-Service Coverage Ratio

$1,050,000 ÷ $1,000,000 = 1.05 DSCR

As you can see in this example, they are clearly below the required 1.20 DSCR by $150,000. While they would still be able to make the debt service payments, they would still be scrutinized for not meeting the debt-service coverage ratio test. This can cause some proverbial alarms to sound as the DSCR test not being met could be symptomatic of one or a combination of many factors, including, but not limited to, poor asset management, new competitors in the local market, enrollment issues at the institution, and financial mismanagement. Because of this, the financiers can require various remedies to occur, including financial and management advisers to scrutinize all operations because they would not want this trend to continue into subsequent financial years.

In some dire situations, the DSCR can go below a 1.00, which essentially means that the housing community is not only unable to meet its debt obligations, but neither its budgeted operational expenses as well. At the end of the day, the only way to remedy a DSCR lower than a 1.20 is to increase revenue and / or decrease expenses. However, it’s important to understand that you cannot “cut” your way to financial success; you cannot make enough cuts to make up for the revenue that you are not earning. You must be able to earn enough revenue to meet the debt requirements. As with the case of the 1.05 DSCR example, attempting to cut $150,000 from the operational budget of a 400 bed community is going to next to impossible without significantly altering the services provided. This is why maintaining a strong occupancy is crucial. If, theoretically, the average fee for an academic year of housing costs $8,000 per student at that community, only 19 additional housing contracts would need to be obtained in order to meet the debt service requirements. 

While there are others nuances and operational strategies in order to meet the debt-service coverage ratio, the key is making sure that your occupancy levels generate enough income to cover both the principal and interest payments as well as operational costs. 

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*Photos courtesy of Marcelo Moura and Ayhan Yildiz.