In January 2018, I served as a faculty member for the ACUHO-I Senior Housing Officer (SHO) Institute in Pittsburgh, PA. I presented on student housing public private partnerships (P3) with a colleague from Brailsford & Dunlavey. I shared that I myself worked for over 10 years for a student housing industry firm at two public university P3 communities in order to gain much needed experience in budgeting, staff supervision, and capital project management. I was approached by a handful of the institute attendees who stated that they were being recruited to work for various privatized housing firms and wanted my perspective and some advice. The following information should prove insightful if you are debating a potential opportunity to work for a privatized, student housing firm.
PRIVATE MANAGEMENT COMPANIES – There are multiple student housing industry firms in the United States that develop, construct, own and / or manage college housing. Some of these firms are privately-owned while others are a public corporation whose shares are publicly-traded on the stock market. Some firms may own and manage private housing in your local off-campus community while others may directly own and / or operate student housing in a P3 relationship on (or near) a college campus. Like any organization, these firms have different histories, goals, priorities, leadership styles, and company cultures. *Note: Do not confuse privately-owned student housing communities near your campus with P3’s. There needs to be a direct public-private financial arrangement between the university and the private firm in order for it to be considered a P3. REIT (i.e., real estate investment trust) firms may own a property off-campus that is completely independent of your university.
ORGANIZATIONAL & STAFFING STRUCTURE – Each housing community (i.e., “property”) has its own staff, which typically includes a community manager, leasing and marketing staff, student account / financial staff, maintenance staff, and student staff. Student housing properties can be small or relatively large depending upon the college or university it serves. I managed two different, campus-affiliated apartment communities of 407 and 770 beds respectively, but I worked with colleagues who managed properties of 1,000+ beds. It should go without saying that the larger properties have a larger staff infrastructure.
The community manager (CM) is in charge of the property and supervises all of the staff. In some cases, the CM and / or maintenance manager (MM) may live on the property. In turn, a regional manager (RM) supervises a portfolio of properties and is the supervisor for those respective CM’s at those properties. The RM is typically a corporate office-based employee who is charged with staying in regular contact with their properties and visit at least once every quarter to make sure that everything is copacetic operationally. They will also interact with campus stakeholders if there is a P3 arrangement.
P3 properties that are operated by a private management company are financially self-supported in that the operational and capital costs come exclusively from the property’s bed revenue and reserves. The management company has a corporate office and supports all of its properties through various departments, such as accounting, human resources, marketing, and purchasing.
It is important to understand that a property CM is NOT the equivalent of a resident hall director or area coordinator. A CM is in charge of all aspects of property operations, including, but not limited to, leasing, rent collections, budget creation, vendor and utility payments, monthly income statement reviews, capital project management, and crisis response. Essentially, they would be the equivalent of a senior housing officer at a very small college. Some properties, however, do have a subordinate resident director that helps with student programming and CA / RA supervision.
REAL ESTATE VS. RESIDENCE LIFE – There is a very distinct difference between working for a student housing management firm and for a college or university residence life department. For a housing firm, the “bottom line” is paramount, particularly if it is publicly-traded with investors involved. At the end of the day, it is a business. In that regard, student learning outcomes, residential curricula, and student affairs are generally not a part of the day-to-day discussion. Operations mostly mirror what multifamily housing real estate management would look like in the rental apartment and townhouse market within the general community.
The vast majority of my community manager colleagues nationally did not have a background in higher education or student affairs and could not tell you what ACPA, ACUHO-I, and NASPA are nor the importance and applicability of student development research into their work. In some cases, there can be community managers who do not have a college education. This is not a criticism, this is simply an industry reality. Additionally, there is a semblance of programming, but overall it is not tied to student learning outcomes or assessment efforts. Programming is essentially a marketing tactic in order to entice students to renew their leases at the property for the following year.
COMPENSATION – It is crucial to understand and consider the different compensation structure that comes with working for a privatized student housing firm. Community managers will receive a base salary and typically the potential for a bonus.
Bonus Structure: Bonus programs can vary from firm to firm and can also differ if there is a P3 arrangement with a college or university. Community managers are normally paid quarterly incentives based upon predetermined objectives tied to revenue, expenses, and leasing efforts. While this may seem alien to a residence life professional, financially incentivizing performance is a standard practice in the real estate world. To give a theoretical example, there could be a $500 bonus for reaching a set goal of at least 98% of the budgeted revenue for a particular quarter. If the property revenue earnings are a total of $1,300,200 for a quarter and the budgeted amount for that time is $1,320,000 (i.e., 98.5%), you would earn the $500 because you would be above the 98% goal. If you were able to maintain that goal for every quarter, you would earn $2,000 (i.e, $500 x 4 quarters). There can be a combination of different bonus amounts for different goals so there is the possibility to earn a considerable aggregated bonus. However, bonuses are never guaranteed and can even be challenging to earn depending upon the financial health of the property and the team’s ability to keep beds filled and costs under control.
Benefits: Unlike working for a college or university directly, the benefits are going to differ in many regards. Educational benefits are generally NOT included for the employee and / or their spouse and dependent children. Also, any 401(k) retirement plans are also not going to be as generous either. For example, when I worked for a privatized housing firm, their match was 1.5% for the 3% that I contributed toward my retirement fund. Colleges and universities commonly match at a much higher rate, including above a 9% contribution where I currently work. In some cases, a firm may offer discounted company stock options that can be paid for by deductions from your paycheck. This can be a nice option, but there can be various restrictions set by the company related to how much you can purchase and the terms upon which you can sell that stock. Additionally, health care coverage is generally going to be more pricey than what is typically offered through colleges and universities.
Below is a compensation chart that illustrates the base salary, bonus, and total compensation for property community managers based upon the bed count of the property. Different firms are going to offer different compensation packages and they will vary dependent upon the size of the property. Obviously there are going to be differences based upon the cost of living of the area in which the job is located. This data came from the July / August 2017 Student Housing Business magazine (pp. 40 – 41).
PROFESSIONAL DEVELOPMENT – Professional development looks different than what you may have become accustomed to on campus, particularly with going to ACPA, ACUHO-I, NASPA or other Student Affairs-related conferences. Most of the training will be based on operations, including marketing, leasing, customer service, and facilities management. This can occur through webinars, online training modules, and even during company retreats held at locations near the corporate office. The training that I received working for a private student housing firm has been invaluable in my current role as a senior housing officer.
BOTTOM LINE ADVICE:
- Look at the turnover history of the property staff and ask why the manager position is currently open? It is naive to think that you will be able to save the day for a property that has a history of challenges. Be careful that you are not walking into a nightmare situation you will regret. Granted, people leave for a variety of reasons, including being promoted. However, there is a significant amount of volatility among manager positions nationally so assess the culture of the company, the qualities and experience of the person that you would be reporting to, and be prepared to ask thoughtful and probing questions.
- If it is too good to be true, it probably is. Be particularly careful when talking with “headhunters.” These are contracted recruiters who earn money by finding viable candidates for companies. I have been contacted numerous times by headhunters who were attempting to sell a position that I was simply not interested in. I also had one recruiter that was particularly pushy trying to get me to interview for a manager position at a property that was struggling in a saturated market. Don’t take the bait and inherit a problem that has little chance of being resolved.
- As should be the case with any job offer, get it in clear writing, including any bonus programs offered. Never accept anything unless you have it in writing. A hiring manager (and / or their human resources department) should be transparent with the salary, benefits, and how bonuses are earned. Don’t get caught into “We’ll see how it goes!” or “There are bigger opportunities coming down the road!” red herring-type conversations that are empty promises. Know exactly what you are agreeing to. In the end, it should be a “win-win” relationship.
- Once you are out, it can be hard to get back in. While P3’s and privatized housing firms are here to stay and an important part of the higher education landscape, there is still much suspicion and disdain among Student Affairs professionals regarding these companies. I certainly felt this among certain campus colleagues and oftentimes at many professional conferences across the country. I clearly remember one time interviewing for a senior housing officer position at a flagship institution and the hiring manager made the comment, “I have no clue why an institution would ever outsource their housing?!” Because of these types of negative opinions and stereotypes that exist about privatized housing firms, you can be easily dismissed over other candidates applying and interviewing for campus positions that have a traditional residence life path.
CONCLUSION – There are many considerations to make when deciding to work for any organization, including colleges and universities as well as privatized housing firms. You need to do your homework and find out as much as you can about the position. Talk to your colleagues and mentors about the opportunity as well as any current or former colleagues from that particular housing firm that you may know.
What questions do you have that I may help you with? Additionally, what advice do you have if you have transitioned from campus to the privatized housing world or vice versa. Leave your comments and questions below.