The Ross Effect
Our first contact with Adtalem, the parent company of Ross, came at 10 am on May 24th, 2018 by way of a phone call from their broker in New York. Adtalem uses Newmark Knight Frank as their global provider of real estate services, and Terra Caribbean is proud to be a part of the network. The engagement was confidential at that point and all we were told was that a significant client needed our help in considering Barbados for a new location. We were given just 7 days to prepare a range of options for housing and “warehouse space”.
What we did not know, was that the senior leadership of Ross was already scheduled to visit Jamaica and then Barbados to determine the feasibility of locating the university in either of these islands. Over the next week we pulled together a site selection list, arranged the tour of all the sites, and planned for the unknown questions. On the morning of May 31st, Hayden and I met Ross’ leadership for the first time.
As our tour progressed that day from sites in the north of the island like the former St. Joseph Hospital to open warehouses like the former Banks Breweries, we were fed little bits of information about what they were really looking for.
By about 3 pm that day we understood that we needed housing for 1,000 students and a campus of 80,000 sq. ft. As we drove around we suggested the idea of using Lloyd Erskine Sandiford Centre as the campus. A quick call to our newly elected Prime Minister was met with the words, and I quote, “it would be like manna from heaven if Ross would rent the facility”. A visit to the LESC hastily facilitated by the teams at the Ministry of Housing and Lands confirmed its suitability.
We were left with the challenge of housing 1,000 students in one location. Options of green field sites to construct accommodation, to the renovation of existing hotels were all considered. The last site on the scheduled tour was The Villages at Coverley where we knew there were both completed and uncompleted houses that could possibly fit the requirements. When we drove into The Villages it was clear that we had found the right solution. However, it is easy to now see that it was possible, but frankly we had no idea how Mark Maloney and his team were going to be able to complete the existing 300 shell houses and construct nearly 100 more from bare land in the short 6 months. By the time we completed the deal with The Villages the student accommodation requirement had grown to over 1,400 with only 5 months left to complete the houses. The team at The Villages, their sub-contractors, and more than 800 workers performed a near miracle to complete in the time period available.
The requirements at the LESC also grew and we were able to negotiate for an additional 10,000 sq. ft. of space bringing the total area leased to approximately 100,000 sq. ft.
The scope of our engagement often expanded as additional requirements were introduced. Of particular interest was a secure rental portal that we built, allowing all local agents to showcase available rental properties for relocating faculty and staff. We are pleased that over 80 rentals were completed through that process with over 25 agencies representing most, if not all, real estate agents operating in this market segment. A further 80 or more rentals were made privately and not through the portal, bringing the total to over 150 properties rented by faculty and staff.
The impact of these rentals (400 houses at The Villages and 150 across Barbados) will be felt both immediately and over the longer term. At Terra Caribbean we compile statistics on the available rental stock and within the price range and specification for the Ross staff, we estimate that nearly 70% of the available stock has now been rented. This will have different effects on the market depending on your perspective. For a tenant looking for a similar property, you may find that you are competing with a Ross member for the same space and therefore you have to pay more. For the landlord, the vacancy rate will be reduced and the revenue will have improved. This on its own will impact values, helping to recover some of the significant ground lost in the last 7 years. Bankers will be happy to hear that, and should expect to see a decline in the non-performing loan portfolio.
In summary, the addition of Ross to Barbados from a purely real estate perspective will be to lift rental rates and boost property values within the market segment. This may well prove to be a stimulus for other developers to design and build stock that is suited to the Ross portfolio within the locations most convenient to the campus.
The fact that Ross opened on schedule in early January is a direct result of the hard work of dedicated public servants working hand in hand with the private sector to achieve a common objective for the country.
When we look back on the success of this engagement we recognise that our investment in market knowledge allowed us to provide a comprehensive assessment of what was available and possible. Our deep relationships and credibility with the private sector and government meant that we could get answers quickly. Our knowledge of the market and the potential stumbling blocks to this type of real estate investment meant that we could anticipate challenges and provide guidance to Ross / Adtalem on where they could seek solutions. The depth of our resources allowed us to mobilise to facilitate the real estate needs of the faculty and staff through efforts like the dedicated portal. We were not surprised that the private sector embraced the opportunity with open arms. What was unexpected, and refreshing, signaling a real change in approach to business facilitation, was the speed with which the Prime Minister and her cabinet colleagues responded to the opportunity. Recognising from our very first conversation, the huge opportunity being put forward to our country, the Prime Minister took direct control and brought together a team from all Ministries to find solutions to ensure that Ross chose Barbados. The challenges for government were not small and there was no time to spare. The fact that Ross opened on schedule in early January is a direct result of the hard work of dedicated public servants working hand in hand with the private sector to achieve a common objective for the country.
I am very proud of the integral role that Terra Caribbean played in helping Ross to choose Barbados, especially given that the investments that we have and continue to make in knowledge and relationships. I also believe we as Barbadians should all be proud of the partnership spirit that prevailed between the Barbados private sector, the Government of Barbados, and the leadership team at Ross University School of Medicine.
The story of Ross choosing Barbados as its home is one of which all Barbadians should be proud. Terra Caribbean is pleased with the integral role that we were able to play. Thank you Ross.