DMU campus now for sale, creating development opportunities in central Des Moines
KATHY A. BOLTEN Jan 29, 2020 | 3:13 pm
6 min read time
1,340 wordsAll Latest News, Education, Real Estate and Development
An aerial view of Des Moines University, which has put its 24-acre campus at 3200 Grand Ave. in Des Moines on the market. The osteopathic medical school is moving to a new campus in West Des Moines. Below, the first photo shows a clinical practice classroom; the second photo is of a small conference room in the Clinic Tower. Photos special to the Business Record
Twenty-four acres of real estate, located minutes from downtown Des Moines and the airport, is now for sale and being marketed to potential users not only in the United States but also internationally.
Des Moines University, located at 3200 Grand Ave., is working with Cushman & Wakefield, Iowa Commercial Advisors, to sell its Des Moines campus. The university will continue to operate its clinic on the Des Moines site.
“It was a ‘wow’ factor when we first toured” the campus, said Steve Scott, a senior vice president with Cushman & Wakefield. “We’re going to leave no stone unturned when it comes to marketing. … It needs to be marketed globally.
“We feel like we need to open it up to all types of uses out there.”
The osteopathic medical school, which for decades had been located at 722 Sixth Ave. in downtown Des Moines, moved to 3200 Grand Ave. in the early 1970s after it acquired the former St. Joseph’s Academy, a Catholic all-girl high school that sat on 15 acres. Over the years, Des Moines University bought adjacent ground and constructed new buildings on the campus, including an 11-story office tower
In March, university officials announced plans to develop a new campus in southwest West Des Moines. The university in October paid W&G McKinney Farms LLC nearly $8.5 million for the 88 acres on which it plans to relocate its campus, which is expected to open in 2023.
University officials decided to put the Des Moines campus on the market and turned to Cushman & Wakefield, which Scott says has a portfolio of buyers interested in educational campuses.
“There’s developers around the country that acquire facilities like this speculatively,” Scott said. “If they have a leading tenant that’s going to occupy a fairly significant amount of square footage, that’s a plus for them.”
The university plans to lease back about 75,000 square feet in the Des Moines University clinic building, Scott said. “That’s going to be attractive to investors.”
It is becoming more common for private college campuses to be for sale, mostly because of the increased number of closures due to declining enrollment and financial struggles. A 2018 Moody’s Investor Services report stated that an average of 11 private colleges now close per year, creating opportunities for redevelopment of what is typically considered prime real estate.
Last June, for example, the former AIB College of Business campus at 2500 Fleur Drive in Des Moines was sold for $7.5 million to two local real estate investors. Fenton Hall East and West is being renovated and one- and two-bedroom apartments are being leased. The remainder of the campus has been subdivided into individual parcels that are being sold.
The campus of the now-closed Newbury College, located in a Boston suburb, was recently sold to a firm that invests in senior housing and assisted-living developments, according to the Boston Globe. The campus of the former Atlantic Union College, a Massachusetts college that closed earlier this year, has been divided into parcels and is being sold piecemeal, according to the Worcester County Telegram & Gazette.
The Des Moines University campus has numerous options for use, Scott said. Another university or college could operate a satellite campus on the site. A government agency could use all or part of the site, he said. It also could be transformed into a corporate campus.
“There could be a tenant in downtown Des Moines that wants to have their own campus and own facility, but still be close to the airport and downtown,” said Chris Thomason, a senior vice president with Cushman & Wakefield. “You see these corporate campuses moving way out west because there’s not the real estate available [downtown]. [The university campus] puts significant buildings and real estate close to downtown, so maybe the city of Des Moines won’t lose another company to the suburbs.”
Des Moines University officials hope to sell the campus but are also willing to consider a lease, Scott said. He declined to say what the asking price would be if the campus were sold.
According to the Polk County assessor’s website, the campus and its buildings were valued in 2019 at $78.7 million. The property is tax-exempt. City officials have said they’d like to see the 24-acre campus generate property taxes.
Buildings on the campus include:
• A five-story academic center that has 81,049 square feet of usable space. The building, which includes lecture halls, was constructed in 1980.
• A three-story student education center that has 140,316 square feet of usable space. The building was constructed in 2005.
• A three-story facility called Ryan Hall that has 89,980 square feet of usable space. The original portion of Ryan Hall was constructed in 1963; an addition was added in 2000.
• The one-story Olsen Center, built in 1985, which has 14,443 square feet of usable space.
• The one-story Munroe Building, which has 3,722 square feet of usable space. It was constructed in 2004.
• A four-level, 300-space parking garage constructed in 1987 and remodeled in 2015.
In all, the campus has nearly 446,000 square feet of usable space, slightly less than what is in Capital Square in downtown Des Moines.
The campus also includes a fully operational cafeteria, a 15,000-square-foot renovated fitness center and an underground heated tunnel system that connects all but one of the buildings.
“One of the things we noticed about the entire campus is that there’s zero deferred maintenance anywhere,” Scott said. “It is perfect.”
A team of five people at Cushman & Wakefield is working on marketing the property. A binder filled with color photos of the campus buildings and statistics has been prepared. Drone video footage of the campus has been shot. And a virtual tour inside each building is being prepared.
“If you’re going to market this to a potential user that is [out-of-state or out-of-country], it’s very helpful for them to be able to almost put their hands on it from 10,000 miles away,” Scott said.
RDG picked to design DMU’s new West Des Moines campus
Des Moines University selected RDG Planning & Design to complete the master plan for its new West Des Moines campus, with plans for RDG to also complete the design phase for the buildings that will be built on the new campus.
“We have been on quite a fast-paced approach to having the master plan approved,” Angela Franklin, DMU’s president, said. “Our board of trustees in December approved preliminary plans for the campus. But we are not yet in a place where we’re going to talk about the layout and design of buildings.
“By the summer of this year, we hope to be able to go public with a lot more detail.”
One of the reasons DMU selected RDG was its experience in designing other health-related campuses, among them a college of medicine and a dental school, Franklin said. The firm is currently working on a new health sciences campus for Creighton University in Phoenix, she said.
Franklin said she and her staff have learned firsthand that “there’s a lot of legwork” involved with designing a new campus.
“I don’t know if there’s any other institution out there that is creating a whole new health sciences university from scratch,” she said. “Because of that, you can imagine the level of detail that goes into making a decision about every square inch of space needed on the new campus.”
One of the biggest challenges will be to create a campus that has adaptable space and that can evolve over time, Franklin said.
– Joe Gardyasz, senior staff writer
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