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Higher education sector sees 19 percent reduction in facilities investments

Higher Education

Higher education sector sees 19 percent reduction in facilities investments

Colleges and universities face a growing backlog of capital needs and funding shortfalls, according to Gordian’s 2022 State of Facilities in Higher Education report. 

By Gordian | March 24, 2022
Higher education sector sees 19 percent reduction in facilities investments
Photo: Pixabay

Gordian released the 9th edition of the State of Facilities in Higher Education report, which confirms a growing backlog of capital needs and reveals a downturn in operating budgets. Preliminary fiscal year 2021 data shows a year-over-year investment reduction of 19 percent, as major capital projects were slowed or halted, and recurring stewardship expenditures dipped further.

“Across higher education, focused facilities stewardship and capital planning are more critical than ever. The findings from this year’s report further invigorate our mission to help institutions prioritize investments and drive meaningful outcomes within their communities,” says Mark Schiff, President of Gordian.

Throughout the report, Gordian’s database research and its expert insights affirm the following trends that are shifting the higher education landscape:

  • Preliminary data warns that the facilities investment shortfall to anticipated demands is approaching 40 percent, accelerating the deferral of projects necessary to steward the campus.
  • Gordian’s database shows an average need of $105/GSF at the end of FY20.
  • 30 percent of buildings in the Gordian database are in the 10-25-year age group, and the major systems of many of them will soon reach the end of their lives. A convergence of anticipated lifecycle needs for a large portfolio of campus facilities and the well-documented enrollment cliff on the horizon is expected to bear down on higher ed over the next 10-15 years.
  • Operating budgets have plunged 9 percent since FY19, and preliminary data for FY21 shows an average workforce reduction of 8 percent.
  • Survey results through a partnership with APPA revealed a silver lining — 56 percent of facilities leaders indicated they have greater influence on campus since the pandemic.

This year, data from Gordian’s database of 52,000+ higher ed facilities representing about 300 campuses across North America shows the continuation of familiar trends and some expected changes in response to the pandemic environment. To complement our facilities data with perspectives from the frontline, we partnered with APPA to survey nearly 700 facilities leaders concerning the current pressures they are under and captured the responses in this report.

2022 state of facilities report Gordian RS Means
Large scale capital investment and divestment decisions are often slow to change, even during pandemics. The most recent data reflects that reality, as space growth has continued, despite downward trends in enrollment and increasing facilities backlogs. While the rate of campus expansion has tempered slightly over the past several years, the significant increase in space over the past decade remains an acute financial liability. Chart: Gordian 

“Facilities leaders continue to talk about the extent to which their voice has been heard and continues to be heard,” said Pete Zuraw, Vice President of Market Strategy and Development for Gordian. “We want to keep championing your use of that voice to make a difference on your campuses.”

Facilities strategies are at the forefront of the industry’s race to confront its greatest challenge in generations. The report also points to successful case studies and solution frameworks to help institutions plan coherently, leverage technology and invest creatively. These examples and best practices can be fundamental to helping institutions unified around change adapt to today’s problems and create a richer and more viable future.

Download the 9th edition of the State of Facilities in Higher Education report (short registration required). 

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