After having their students move back home over the coronavirus pandemic, universities are investing to save the small businesses located close to their campuses. Williams College, Yale University and Colgate University are just some of the schools that are owners of business property and have ceded rent to tenants, Bloomberg reported.
American colleges own approximately 20 million square feet of retail property per CoStar Group Inc. Some of the more well-to-do schools can offer assistance, but colleges with less means might be in a battle for their survival as enrollments that power tuition revenue are not guaranteed.
“Looking across all of retail, these owners and tenants and the lenders also all depend on each other,” CoStar Senior Consultant Kevin Cody said per the report. “If one of them fails, the other two will be impacted by it negatively.” The relationship between town and gown, however, can be a challenge.
Colleges usually don’t have to pay property taxes, while students can be disruptive. Educational institutions, however, require lively retail to have thriving towns. The departure of shoppers after colleges had their students go back home is a challenge of the sustainability of business districts as are government mandates to shutter many nonessential companies.
Colgate University, for its part, is in a town with a population of approximately 6,000. The university started purchasing vacant buildings and made a company to run a real estate division approximately two decades ago. As of now, the initiative has offered a rent abatement of three months to 15 tenants.
The news comes after it was reported that retailers around the globe are closing or cutting their hours to stem the coronavirus’ spread. The closures are meant to support social distancing, which is the act of cutting person-to-person contact. Each infected individual is estimated to spread the virus to an average of two or three other people.
Nordstrom, H&M, Macy’s and DSW, among other companies, have shuttered all of their stores per past reports.