The graduate housing crisis at the University of Maryland, where students spend 50 to 76 percent of their stipends on rent, highlights a market gap that private operators are increasingly filling. Teddy Abdelmalek, Senior Vice President of Business Development at HH Red Stone, argues that public-private partnerships (P3s) offer the most viable solution for universities struggling to provide affordable housing without straining their finances.
Under the P3 model, a private developer finances and builds housing on university land, often using tax-exempt bonds, while a private operator like HH Red Stone manages the property under a long-term ground lease. “Universities don’t have the operational components to manage something of that magnitude,” Abdelmalek explains. “It’s financially exhaustive for them to find people to manage these properties. That’s where private operators come in.”
The arrangement preserves universities’ borrowing capacity for academic priorities. “Most universities have limited borrowing capacity, and the debt they use is reserved for academic priorities,” he notes. “Housing projects can cost hundreds of millions of dollars. If the university financed them, it would entirely consume their capacity for academic infrastructure.”
Beyond financial benefits, private operators bring specialized expertise in student preferences and construction timelines. “Private student housing developers know what students want,” Abdelmalek says. “They know what the finishes should look like. They know what attracts students.” Speed is another advantage: university committees and public spending rules can delay projects for years, but private developers can accelerate the process.
The graduate housing segment is particularly ripe for P3s. Abdelmalek recently submitted a proposal to manage on-campus housing at a large top-tier institution. “P3 partnerships are growing at major universities because private operators have really mainstreamed how to run properties and turned it into more of a business,” he observes. “Universities don’t really have that expertise in managing real estate. They’re more about resident experience and the overall life cycle of the resident.”
While on-campus P3s are one model, affiliated housing—where properties carry university branding but operate with limited university ownership—offers another approach. Bond holders often own these properties, with occupancy rules depending on the bond type. For operators, success hinges on balancing institutional partnerships with operational excellence. “It’s less about outsourcing the housing and more about protecting the university’s balance sheet while delivering something new to the university,” Abdelmalek concludes.
