Why Public Agencies Are Choosing Partners Who Stay Involved

By Travis Griffith, AREY Group CEO
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Across the country, universities, municipalities, and public agencies are rethinking how they approach real estate development. For decades, the traditional model was straightforward: hire a developer, build the project, and take ownership once construction is complete. But increasingly, public institutions are moving toward partnerships with developers who remain involved long after delivery.

This shift isn’t just about convenience. It’s about risk, expertise, and long‑term alignment.

"Successful projects don’t end at delivery, they begin there."

Pressure Facing Public Institutions

Universities and public agencies are under growing pressure to expand infrastructure while managing limited capital budgets. Student housing, research facilities, mixed‑use, and workforce housing are all essential to institutional growth, but funding them entirely through public capital is becoming more difficult.

Public‑private partnerships (P3s) have emerged as one of the most effective solutions. These partnerships allow institutions to collaborate with private developers to finance, design, build, and often operate or maintain infrastructure, combining public oversight with private‑sector expertise.

Over 200 public-private partnership student housing projects have been completed at U.S. universities since the late 1990s, according to the National Association of College and University Business Officers (NACUBO).

For universities in particular, the demand for housing continues to outpace supply. Many institutions are unable to house more than 20–30% of their student population on campus, creating pressure to deliver modern housing quickly and efficiently.

According to the National Multifamily Housing Council, only about 22% of the nation’s more than 20 million college students live in on-campus housing, forcing universities to explore partnerships with private developers to expand housing options.

From Vendor to Long‑Term Partner

What institutions increasingly want today is not just a developer, they want a partner.

Traditional development structures often separated responsibilities. One firm designed the project, another built it, and the institution took over operations afterward. But this model can create misalignment. The team responsible for building the project may never experience the operational consequences of their decisions.

In contrast, many P3 projects are structured using Design‑Build‑Finance‑Operate‑Maintain (DBFOM) models. In these arrangements, the private partner remains responsible for the asset long after construction is complete.

According to Turner Construction Cost Index, construction costs have risen more than 35% nationally since 2020, meaning many institutions simply cannot fund major housing or infrastructure projects without outside capital and development expertise.

This alignment fundamentally changes how projects are delivered. When a developer remains involved in operations, decisions made during design and construction are evaluated through a long‑term lens.

Operational Expertise Matters

Another reason institutions increasingly seek long‑term partners is operational complexity. Research from McKinsey shows construction productivity has grown less than 1% annually over the past two decades, reinforcing the need for experienced development and operational partners who can manage projects efficiently.

Managing large residential communities, whether student housing, multifamily, or mixed‑use, requires specialized expertise. Leasing, maintenance, technology systems, and resident services all influence financial performance and the user experience.

Universities face an estimated $112 billion in deferred maintenance across campus infrastructure, according to APPA, making it increasingly difficult for institutions to fund new projects through traditional capital budgets alone.

For universities, this means leadership can stay focused on their core mission, education, while experienced operators handle housing, facilities management, and infrastructure performance.

Speed and Capital Access

Another driver behind these partnerships is speed.

Public institutions often face lengthy procurement processes and capital constraints that slow project delivery. Private partners bring capital, development expertise, and access to financing structures that can accelerate timelines.

Public‑private partnerships can allow institutions to expand facilities without adding significant debt to their balance sheets while also sharing construction and operational risk with private partners.

“Institutions aren’t just looking for developers anymore, they’re looking for partners who will be accountable for performance long after the ribbon cutting.”

Expanding the Model Beyond Universities

The same principles driving partnerships in higher education are increasingly being explored across other public infrastructure sectors, including healthcare, affordable, and military housing.

The U.S. Department of Defense has long relied on public-private partnerships to modernize military family housing through the Military Housing Privatization Initiative (MHPI), which has delivered more than 200,000 homes for service members and their families since its launch in 1996. More recently, similar partnership models have been used for privatizing military lodging, as well as some barracks, as the Department of Defense works to address aging facilities and improve quality of life for its military personnel.

For experienced real estate operators, these projects require far more than development expertise. They require long-term stewardship, operational discipline, and an understanding that these communities serve critical missions beyond housing alone.

The institutions exploring these partnerships understand that the most successful projects are not delivered by vendors, but by partners who remain invested in their performance for decades.

Looking Ahead

As infrastructure demands grow across higher education and public institutions, we expect to see more projects delivered through partnerships that combine development, construction, and long‑term operations.

The institutions leading this shift understand something important: successful projects don’t end at delivery, they begin there.

The most effective developments are the ones built with a long‑term perspective, where the team responsible for creating the asset remains invested in its success for decades to come.

At AREY Group, we’ve seen firsthand how long-term partnerships between institutions and experienced operators can unlock opportunities that might otherwise remain out of reach. As universities, municipalities, and public agencies continue exploring new development models, the most successful projects will be those built on trust, alignment, and long-term stewardship.

A Long‑Term Approach to Community Development

At their best, these partnerships extend far beyond the initial development phase.

Developers who remain involved in operations become stewards of the communities they build. They work alongside universities and municipalities to ensure projects remain financially sustainable, operationally efficient, and aligned with institutional goals.

Instead of a transactional project, the partnership becomes an ongoing collaboration.

About the Author

Travis Griffith is CEO of AREY Group, a vertically integrated real estate company specializing in student housing, multifamily, and mixed-use developments. AREY partners with institutions, municipalities, and private investors to deliver projects that create long-term value for communities.

 

Sources

• National Multifamily Housing Council (NMHC)

• National Association of College and University Business Officers (NACUBO)

• APPA – Association of Physical Plant Administrators

• Turner Construction Cost Index

• McKinsey & Company