Back to School

The old college bookstore, which traditionally sold everything from textbooks to logo sweatshirts to convenience foods, isn’t the only game in town anymore. Increasingly, retailers are setting up shop either on campus or in adjacent university-owned developments. Driving the trend: the estimated $198 billion in college-student spending and the retail savvy of college students.

“Today’s college students are accustomed to having a myriad of amenities. When they select a college, the amenities and facilities that a university offers will play a significant part in the selection process,” said Herman Bulls, CEO of Jones Lang LaSalle’s (JLL) public institutions group based in Washington, D.C.

JLL is one of the most prolific of college developers, and has worked with more than 80 colleges and universities on hundreds of projects, including Ohio State University’s $120 million South Campus Gateway, which opened in August 2005 and is anchored by Barnes & Noble and a cinema complex. JLL’s Penn University retail project includes Urban Outfitters, Cosi, Barnes & Noble and Bridge Cinema.

Once a student chooses a college, the university wants him or her to stay put as much as possible.

“A university needs to offer enough amenities to encourage a student to stay on campus and become part of the neighborhood. The right project will link ‘town and gown,’” added Cubie Dawson, senior VP in JLL’s New York City office. “That creates a win-win for the major stake-holders—the neighborhood, students, and the faculty and university at large.”

That’s not to say every retailer has a place on or near campus. For obvious reasons, some tenant types fare better than others.

By the book: Barnes & Noble, Inc., through its privately held Barnes & Noble College Booksellers ( www.bncollege.com ) sister company, operates 620 bookstores on college and university campuses across the United States. Of those, about 100 are branded Barnes & Noble; the others are university-branded while still carrying the signature Barnes & Noble service and appeal.

“Our vision is to create a store that addresses four areas,” said Max Roberts, president, Barnes & Noble College Booksellers, Basking Ridge, N.J. “First, a Barnes & Noble college bookstore is a robust center of commerce. It is also a knowledge center; it is what we refer to as an academic village green or gathering place; and, finally, it is a ‘memory palace’ for the students and faculty.”

In stores that range from 2,000 sq. ft. to academic superstore-sized 65,000 sq. ft., Barnes & Noble offers textbooks (“most important of all,” emphasized Roberts), as well as gifts, collegiate clothing, trade books and, in about 60 locations nationwide, a Starbucks coffee shop.

“You have the merging of two great brands here,” said Roberts, “the university brand—which has to be great in order to attract students, research funds and faculty—and our brand, which is one of the greatest customer-service brands in America.”

Whether or not the college bookstore is branded Barnes & Noble, it still exudes the company platform. Barnes & Noble gift cards are sold at every store, branded or not, and the service is designed to meet traditional-store standards. Each location—whether it’s a mega-college such as Ohio State or an Ivy League university such as Yale or national champion in football Louisiana State University—features a store design that is authentic, history-rich and created as a university showcase.

“Our focus is to provide a terrific experience on that campus, to help universities realize their vision,” said Roberts.

Barnes & Noble is no rookie when it comes to university retail. Len Riggio, chairman, launched the concept in 1965 when he was a New York University bookstore employee.

“He saw a need to serve the student better,” said Roberts. “So Barnes & Noble began from quite a simple principle—that students buying their required textbooks deserved more than just being herded in a line and handed a book.”

Go “Big Pink”!: Victoria’s Secret entered college via the commuter route. Four years ago, the lingerie giant debuted its Pink brand, which now accounts for about 17% of the retailer’s total sales. From the start, the line was a big hit with teens and college students. The company enhanced its collegiate following with unique campus tours (see related story), which have now culminated in a 2008 launch of its Pink Collegiate Collection of licensed T-shirts, sweats and underwear for 33 universities.

Although the line is sold mostly inside Victoria’s Secret stores, there are now six dedicated Pink by Victoria’s Secret stores open, with plans for more.

Mall U: Books and lingerie aren’t the only products that retailers are bringing back to school. Large-scale developments built on, or adjacent to, university land are drawing a myriad of retail categories, as well as residential, office and entertainment uses.

To develop on- or off-campus projects, developers will either buy land from universities or execute long-term (typical is 40 years) ground leases that allow the university to control the land’s use and to ultimately get the land back. Developments that use peripheral college acreage, especially ground that abuts other residential and commercial uses, will allow developers and universities to capitalize not only on the collegiate customer but also on the nearby rooftops and businesses.

On the Emory University campus in downtown Atlanta, locally based Cousins Properties is launching a major mixed-use development that will include residential components and 93,000 sq. ft. of retail and restaurant space. The project’s retail will be geared toward Emory’s student and faculty populations, as well as the nearby neighborhoods.

For the Rochester Institute of Technology (RIT), Rochester, N.Y.-based Wilmorite is entering the completion phase of Park Point, a retail and residential project opening this month on about 60 acres of the northeast corner of campus. A 40,000-sq.-ft., two-level Barnes & Noble anchors the development, and is joined by 27,000 sq. ft. of retail and other services, including a fitness center, apparel retail, salon, convenience store and food offerings such as an Irish sports bar, pizza parlor and coffee bistro.

“We purchased the land from RIT, and at the end of 40 years there is a give-back to the university,” said Paul Wilmot, president of Wilmorite. “The school will be dependent upon full public support of the retail uses; we have positioned the project, and leased it, accordingly,” he said. “The area isn’t necessarily urban, but it is surrounded by office parks and apartment complexes and abuts what I would describe as the center of retail in Rochester.

“From the university’s perspective, a project like this is very attractive,” Wilmot added, “because RIT’s main goal by selling us this property was to enhance the quality of life for its students—which is something you’re going to see more and more universities do, through retail and restaurants either on or adjacent to campus, to help recruit and retain students,” Wilmot said.

And, added Kevin Wilmot, VP of finance for Wilmorite, there is a financial incentive as well. “Universities are turning to private developers to shoulder some of the capital burden of building new facilities,” he said. “So while RIT is going to benefit from the Park Point project, the college isn’t paying for it. And it isn’t carrying it on the balance sheet.”

Dr. John C. Cernech, VP of student services for Creighton University in Omaha, Neb., agrees that universities are cognizant of the value-add that retail and services bring to colleges. On the Jesuit Catholic campus of Creighto