Washington, D.C. (January 31, 2017) — Howard Dormitory Holdings 1, LLC, a wholly-owned and title-holding company of Howard University (“Howard SPE”), Howard University (the “University”) and Corvias today announced an innovative 40-year partnership that will completely renovate and maintain two of the University’s largest residence halls and manage two additional halls.
Under a cutting-edge concession structure, Corvias will renovate the East and West Towers of Howard’s Plaza Towers residence, located at 2251 Sherman Ave., N.W. and manage the University’s Drew and Cook residence halls, which are located on the north side of the main campus. The Howard Plaza Towers, and Drew and Cook residence halls were transferred by the University to the Howard SPE.
Corvias, a Rhode Island-based company that is a pioneer in sustainable, long-term partnership solutions, raised $144 million for the project from institutional investors. Proceeds will fund renovation and modernization, the retirement of some debt, transactions costs and the creation of a sizable reserve fund for future capital expenses.
While partnerships like these have grown in popularity within the higher education industry, the Howard SPE and the University (collectively, the “University Parties”), and Corvias have established a unique arrangement. Corvias will manage the renovation and operations of the facilities on a day-to-day basis for a performance-based management fee, but all residual cash flow will flow to the University Parties. A portion of these funds will be dedicated to a reserve fund for reinvestment into the residence halls and a portion will be collected by the University Parties to fund other discretionary initiatives.
The University Parties will soon be able to offer students an up-to-date live/learn environment. The project will deliver 1,730 newly renovated beds in the West and East towers, and 522 existing beds in Drew Hall and Cook Hall will be under Corvias’ management. Over the course of the partnership, Drew and Cook Halls will also receive capital improvements.
“This partnership is an innovative solution to leveraging our assets while improving the facilities for students so they are competitive in the higher education marketplace,” says Dr. Wayne A.I. Frederick, president of Howard University. “We have to find ways to solve complicated problems, invest in the University’s infrastructure and make our entire campus environment better and more attractive.”
To develop the program for the Plaza Towers renovation, the University and Corvias conducted student focus groups and incorporated comments from the University’s housing market study, conducted in 2016. As a result, the halls will offer amenities such as state-of-the art technology, expanded fitness rooms, expanded common areas for social interaction including a TV lounge, classroom space, and space for faculty to meet with and socialize with students. Resident room layouts have been redesigned to afford more privacy to students and create more beds. Maintaining affordability and minimal annual rate increases were primary concerns for the University Parties, and are reflected in rental rates that are substantially below market for the booming Shaw/Logan Circle communities. The University Parties also control how much housing payments can be increased on an annual basis.
“This partnership reinforces Howard’s position as a top institution and will keep a college education affordable and campus life safe for students,” says John Picerne, CEO of Corvias. “Corvias greatly respects Howard University’s mission to develop students into outstanding citizens. The strong sense of community and purpose shared by its graduates align with our values as a company, providing a strong foundation for this 40-year commitment to the community.”
Corvias will work closely with the University’s Residence Life and Student Services teams to manage the residence halls as Corvias oversees residence life programming. Additionally, the University Parties and Corvias share control over major decisions through a Management Review Committee, where they each have equal voting rights.
The partnership was formed under the premise of mutually aligned goals. Corvias’ management fees are performance-based, ensuring both parties are equally invested in the success of the University. Anthony Freeman, the University’s Real Estate Executive, along with Trena Drayton, the University’s Deputy Chief Financial Officer, coordinated the efforts of multiple University stakeholders and led negotiations on behalf of the University Parties. Alvarez and Marsal served as Howard’s transactional advisor.
About Howard University
Founded in 1867, Howard University is a private research university that is comprised of 13 schools and colleges. Students pursue studies in more than 120 areas leading to undergraduate, graduate and professional degrees. The University operates with a commitment to Excellence in Truth and Service and has produced four Rhodes Scholars, nine Truman Scholars, two Marshall Scholars, one Schwarzman Scholar, over 60 Fulbright Scholars and 22 Pickering Fellows. Howard also produces more on-campus African-American Ph.D. recipients than any other university in the United States. For more information on Howard University, call 202-238-2330, or visit www.howard.edu.
In 2014, Corvias made waves in the student housing industry after being awarded an unprecedented 65-year partnership with the Board of Regents (BOR) of the University System of Georgia, which was the first time that a state system privatized student housing across a portfolio of campuses. On July 1, 2015, Corvias assumed operations on all nine of the first phase’s campuses. The partnership was also recognized by the infrastructure community with the 2015 Infrastructure Journal Global Americas Award in Social Infrastructure.
As a privately-owned company headquartered in East Greenwich, RI, Corvias partners with higher education and government institutions nationwide to solve their most essential systemic problems and create long-term, sustainable value through our unique approach to partnership. Corvias pursues the kinds of partnerships that materially and sustainably improve the quality of life for the people who call our communities home, purposefully choosing to partner with organizations who share our values and whose mission is to serve as the foundational blocks, or pillars, of our nation. To learn more, please visit: www.corvias.com