Valuing University Campuses: Expert Special-Purpose Appraisal Guide

University campuses rank among the most complex asset types in the commercial real estate landscape. Unlike conventional income-producing properties—office buildings, retail centers, or industrial facilities—major educational institutions function as interconnected ecosystems. Their buildings, land, infrastructure, and operations rely on one another to produce educational services.

For university systems, multi-campus portfolios, colleges, and higher-education facilities undergoing expansion, acquisition, refinancing, or repositioning - the nuances of this property type require an analytical approach that integrates real estate, operations, demographic trends, mission-driven design, and significant specialized improvements.


The University Campus as a Single Economic Unit

One of the defining appraisal challenges for universities is the concept of the single economic unit. A campus is not simply a collection of buildings—it is a purpose-built operational system where nearly every asset is interdependent:

  • Academic buildings rely on enrollment to function.
  • Dormitories require the presence of academic facilities.
  • Student centers, dining halls, and recreation complexes exist because of the residential population.
  • Parking, roadways, pedestrian flows, and utilities are engineered as integrated infrastructure.
  • Energy plants and central mechanical systems serve multiple buildings simultaneously.


The collective value is often far greater (or less) than the sum of its parts. When a campus is appraised, the appraiser must determine:

  • Which components cannot function independently
  • Which structures are economically separable
  • Whether the campus is physically, legally, and economically unified
  • What the contributory value of specialized improvements truly is


“Campus value is created not by any one structure, but by the interdependence of all of them functioning together as a unified whole.”


Campus-level valuation requires specialized methodology. Treating each building as a stand-alone asset can produce wildly inaccurate conclusions. Instead, the appraiser must evaluate the operational interdependence of the entire system.


Understanding the Unique Property Types Within a Campus

University campuses include a wide spectrum of real estate classes, many of which are special-purpose or limited-market:

  • Academic instruction buildings
  • Science and research labs (often with highly specialized buildouts)
  • Performing arts centers
  • Student housing and residence halls
  • Athletic complexes and stadiums
  • Administrative and ancillary facilities
  • Campus health/clinical facilities
  • Central utility plants
  • Chapels or faith-based structures (for religious institutions)


“A science lab is not just a building; it’s a highly engineered environment with limited secondary market demand. It is subordinate to the accessory buildings of the collective.”


Each of these requires different valuation techniques, cost considerations, and market analyses.


Specialized Improvements & Replacement Cost Considerations

Many campus buildings—particularly research labs, STEM facilities, and performing arts venues—contain high-cost components with limited secondary use. Common examples include:

  • Advanced HVAC and air handling systems
  • Laboratory gas and waste lines
  • Clean-room environments
  • Auditoriums with theatrical lighting and acoustical treatments
  • Medical simulation facilities
  • Large-scale dining and commercial kitchen infrastructure
  • Combined heat and power (CHP) systems

Because these improvements are expensive to reproduce and often have limited comparable markets, cost-based analysis and functional utility assessments become essential components of the assignment.


Highest and Best Use in the Educational Context

Unlike typical commercial assets, the highest and best use for a university campus is almost always continued educational use—but that does not eliminate the need for testing alternative uses.


“Alternative use analysis matters, even for educational institutions. Real estate must make economic sense, even when the mission is nonprofit.”


Key considerations include:

  • Can portions of the campus be repurposed for residential, office, or mixed-use?
  • Are there legally permissible separations within the zoning or campus master plan?
  • Would the cost of conversion exceed the value of continued educational use?
  • How do mission-based and nonprofit ownership structures affect value?

This analysis ensures that the appraisal conclusion reflects both market reality and the institution’s operational intent.


Enrollment Trends, Demographics & External Market Forces

University viability is deeply tied to enrollment demand, which is influenced by:

  • Demographic shifts in college-age population
  • Competition from online education
  • State funding levels
  • International student enrollment cycles
  • The financial health of the institution


“Campus appraisal is not simply math—it is the art of understanding how education, economics, and real estate intersect - and how these intersections drive value for this asset class.”


Appraisers must incorporate these factors into income projections, risk assessments, and cost feasibility analysis. A campus with declining enrollment may experience:

  • Underutilized buildings
  • Increased deferred maintenance
  • Higher per-student operating costs
  • Reduced fundraising and capital project capacity


These economic realities directly influence the value of the physical campus.


Limited Market Comparables & the Importance of Expert Judgment

There are market participants for educational campuses. The key is understanding who the likely buyer is, understanding the market for this buyer, and identifying market data for the defensibility of the final report.


“The market for universities is never monolithic. A growing institution with strong enrollment lives in a very different marketplace than an under-demanded rural campus. Appraisers must identify the market context before they can interpret the real estate.”


 This poses several challenges:

  • Few sales for direct comparison
  • Sales often involve unique motivations (mergers, closures, system consolidations)
  • Property components vary widely across institutions
  • Transaction structures may include assets beyond real estate (e.g., intellectual property or program transitions)

Because the market is so thin, appraising campuses requires:

  • Deep experience with cost, income, and special-purpose methodologies
  • Benchmarking against analogous institutional properties
  • Detailed analysis of contributory value versus mission-driven value
  • Understanding what elements are transferable in an open market


Functional & External Obsolescence

No campus is immune to the forces of obsolescence. Buildings age, pedagogies change, enrollment patterns shift, and communities evolve. Recognizing where a facility no longer aligns with institutional needs—or where external pressures reduce demand—is central to any credible higher-education valuation.


Functional obsolescence

  • Outdated dormitory layouts (e.g., community bathrooms)
  • Inefficient academic buildings with obsolete configurations
  • Aging athletic facilities with non-compliant specifications


External obsolescence

  • Declining local population
  • Shifts in program demand
  • Regional competition
  • Broader educational sector headwinds


These forces impact cost approach adjustments, depreciation modeling, and future cash flow expectations.


Why Engaging a Specialist Matters

Appraising a university campus is not simply a matter of calculating cost or reviewing leases. It requires:

  • Understanding mission-driven ownership models
  • Analyzing multi-building interdependence
  • Evaluating specialized infrastructure
  • Forecasting demographic and enrollment trends
  • Structuring appraisal models for non-standard income streams
  • Recognizing what components have true market value


If you represent a university system, financial institution, lender, legal team, or education organization planning acquisitions, financing, redevelopment, or strategic planning—it is critical to partner with an appraiser experienced in institutional and special-purpose assets.


Let’s Talk About Your Campus or Education Portfolio

Appraising a university campus is more than an exercise in valuation—it’s a responsibility. These institutions serve communities, house generations of students, and anchor regional economies. When they prepare for refinancing, expansion, restructuring, or strategic planning, they need more than numbers on a page—they need clarity, expertise, and a partner who understands the story behind every building and every acre.


Our team approaches each campus assignment with the care it deserves, combining rigorous analysis with decades of experience valuing complex educational and special-purpose properties. If your institution is navigating a major decision involving its real estate—whether it’s a single facility or a multi-campus system—we’re ready to help you move forward with confidence. When you’re ready to take the next step, reach out. Let’s talk about your campus, your challenges, and how we can support your mission.

Appraising Historic Properties With High Provenance: Foundations, Complexities, and Defensible Valuation Approaches

November 30, 2025
Historic properties hold a unique position in the real estate world. Their value is rarely dictated by market forces alone. Instead, these buildings — whether theaters, museums, courthouses, religious institutions, architecturally significant residences, or one-of-a-kind heritage structures — are shaped by a constellation of historical, architectural, regulatory, and functional considerations.

Identifying the Trees & Appraising the Forest: Avoiding over-engineered reports and identifying the material risks

October 19, 2025
Appraisal reports don’t exist just to deliver a number—they exist to deliver judgment. The skill is knowing what to include, what to qualify, and how to communicate uncertainty without drowning readers in details. Or as the original piece put it, there’s more to an appraisal than the value conclusion . Why appraisals get overbuilt (and how to stop it) “You can’t be all things to all people.” Overstuffed reports try anyway—usually because stakeholders (counsel, tax advisors, estate planners) ask for “everything,” even when the added volume doesn’t change the valuation or the risk picture. The antidote is scoping with intent : design the assignment around the value question, the relevant property rights, and the decision your intended users must make. ( Argianas ) Principle: disclose what’s material, qualify what’s uncertain, and resist padding that obscures your conclusions. A real-world tangle (and the lesson inside) The scenario. After a decades-long lease on a cemetery property expired, the landowner and the operating business spent years in a legal dispute over rent. During the stalemate, the operator began renovations, demolishing some improvements; the site sat mid-reconstruction. Both sides wanted different things—continued renovations vs. rent certainty—and “fair market rent” hinged on which real property rights existed and how they interacted with the partially completed improvements. The lesson. Before you can value, you must vet the entitlements and lease rights associated with the land, structures, and improvements. When facts are in dispute or documents are incomplete, proceed—but declare the uncertainty and its valuation consequences to your intended users. The tools that keep you honest 1) Extraordinary assumptions (and how to use them well) When you must analyze despite missing or disputed facts, you can proceed subject to extraordinary assumptions —explicit statements about uncertainties that the value opinion relies on. They are not shortcuts; they are disclosures that frame risk for users and for the court record. Cemetery matters frequently require this approach due to the mix of license, privilege, and interment rights that blur classic leasehold logic. Good practice: State the assumption in plain language. Tie it to the affected inputs (e.g., rent commencement, repair obligations, interment rights, access/easements). Quantify the sensitivity where feasible (e.g., “If X right is not confirmed, indicated value declines by ~Y%”). 2) Intended users & scope discipline Identify who will rely on the report and why (litigation support, negotiations, lending, tax appeal). Then right-size data collection, modeling depth, and reporting format to that audience—while preserving independence and objectivity. 3) Legal context, not legal conclusions Interpretive disputes happen—especially with old leases. Track them as appraisal risks (inputs you cannot independently resolve). Note related doctrines (e.g., laches , where inaction over time may limit recourse) to explain why certain claims may or may not affect value—but stop short of rendering legal opinions. A repeatable workflow for complex, contested assignments Triage & framing Define the value question (e.g., market rent vs. fee simple value vs. leased fee). Identify property rights at issue: fee title, leasehold, licenses, interment rights, easements, development rights. Document map Leases, amendments, side letters, estoppels, purchase options, trust/operating agreements, permits, entitlements, construction contracts/change orders. Create a “fact status” legend: confirmed / disputed / missing —and link each to a proposed extraordinary assumption if needed. Physical & functional check Current condition (including partially demolished or mid-renovation components), code compliance, site access, utilities, phasing. For cemeteries: status of interment inventory, sections under construction, and any operational disruptions caused by works in progress. Rights & obligations analysis Who pays for what (shell, site work, specialized improvements)? Repair/restore duties after demolition or casualty; timing and remedies on default/holdover. For cemetery properties, detail interment rights structure (license vs. lease vs. privilege) and the financial implications for rent and expenses. Income and cost modeling under alternative legal states Build scenarios matching each plausible legal interpretation (e.g., rent resets allowed vs. not; obligation to restore improvements vs. not). Assign probabilities only if supported; otherwise present range-bound indicators with narrative preference and rationale Disclosure package Prominent extraordinary assumptions and limiting conditions . A single-page risk memo for intended users summarizing how unresolved issues could swing the value or rent opinion. What to include (and what to leave out) Must-haves: The specific rights appraised and any rights excluded. The status of disputed facts , mapped to explicit assumptions. How uncertainties flow through the model (show your levers and ranges). Clear, decision-ready conclusions : base case, edges of the range, and what would move you from one to the other. Nice-to-have (only if decision-relevant): Extensive market comp appendices, engineering minutiae, or legal treatises that don’t change your indicator values or risk assessment. Common pitfalls (and how to avoid them) Ambiguity amnesia: treating old, vague lease clauses as settled law. Flag them and model alternatives. Construction blind spots: valuing mid-renovation properties as if improvements were stable or fully contributory. Adjust for condition and completion risk. Rights mismatch: applying standard lease economics to license/privilege structures (common in cemeteries) without re-tooling the cash flows. Disclosure drift: burying extraordinary assumptions in the back matter. Put them up front, tie them to numbers, and write them plainly. Mini-checklist: before you sign Have we defined the rights appraised and tied them to the legal documents in the file? Are all disputed/missing facts surfaced, and are extraordinary assumptions worded so that a non-appraiser can understand them? Does the model show how each uncertainty affects value/rent? Is our conclusion decision-oriented for the intended users, not just document-heavy?  Closing thought On complex matters, the scope you thought you had on day one will evolve. That’s normal. Your job is to keep independence, surface the legal and factual forks that matter, and qualify your conclusions so users can act—with eyes open. Feeling six feet under with a dusty lease or a half-finished property fight? The Argianas team can help you parse the rights, frame the risks, and produce a defensible, decision-ready opinion. Call 630.390.0113.

A Monumental Task for a Dying Industry: Cemetery Valuation

March 28, 2022
Cemeteries and mausoleums—serving humans and pets alike—are niche, operational real estate. They generate income, require long-term stewardship, and are subject to unique legal and cultural expectations. That combination makes valuation anything but routine. At Argianas, we’ve appraised both human and animal cemeteries and understand that while the occupants differ, the core appraisal principles—and the need for careful due diligence—remain the same. What Drives Value? Property Rights & Use Agreements Plot rights: Are interment rights sold in fee , leased for a term , or granted in perpetuity ? Multiple interments: Any modified plot-to-burial ratios (e.g., double-depth, family plots, cremains above caskets)? Rules & restrictions: Deed/contract language on transferability, memorial types, visitation hours, and disinterment. Maintenance obligations: Who is responsible for grounds and monument upkeep? Are perpetual/endowment care funds established and properly funded? Operating Profile Cemeteries are often owner-operated or part of consolidated chains. They’re bought and sold on current and expected income-producing potential : Revenue streams: interment rights, mausoleum crypts, columbarium niches, cremation services, opening/closing fees, vaults/liners, headstones/markers, floral/placement services, and memorialization merchandise. Cost structure: labor and equipment, grounds and tree care, irrigation, roads, security, chapel/office utilities, repair of monuments and walls, compliance reporting, and professional fees. Phasing: Interment areas are commonly developed in stages to match projected absorption and manage capital outlay. Market Context Location & entitlements: Confirm zoning for burial/interment, mausoleum height/placement, crematory permissions, and any historic or environmental overlays. Demand signals: Local mortality metrics, age distribution, cultural/religious preferences for burial vs. cremation, and competitor capacity/price points. Ownership & purpose: Nonprofit (religious, municipal, military, fraternal) vs. for-profit models can change pricing power, service mix, and allowable distributions. Not Your Great-Grandparents’ Cemetery Shifts in cost, culture, and environmental priorities have diversified offerings: Cremation growth has expanded demand for columbarium niches , scattering gardens, and remembrance walls—yet traditional burial persists , especially in faith-based segments. Design has trended from ornate headstones to memorial parks with low-profile markers and sculpted landscapes that simplify maintenance and present a cohesive aesthetic. Full-service facilities may include a mortuary, crematory, mausoleum, chapels, columbaria, sales offices, florist/retail, maintenance shops, and by-appointment counseling —each with its own cost and revenue profile. Properties often reserve areas for families, religious groups, veterans, or cultural communities , influencing pricing and absorption. Valuation Approaches That Actually Work Highest & Best Use (HBU) Start by testing legal permissibility, physical possibility, financial feasibility, and maximal productivity. For operating cemeteries, HBU is typically continued use; for obsolete sites with limited interment rights remaining, conservation, memorial-only use, or partial redevelopment may be a secondary scenario—subject to law and community standards. Income Approach (the workhorse) Sell-off (absorption) modeling for new or expanding sections—analogous to a subdivision analysis. Forecast price per plot/crypt/niche, pace of sales, mix of services/fees, operating costs, and capital expenditures by phase. Stabilized income capitalization for recurring services (e.g., opening/closing, care services, merchandise margins) where appropriate. Lump-sum negative reversion: Unlike most retail sell-offs, many cemeteries carry a perpetual maintenance obligation after sales conclude. Model this with a negative terminal value (the present value of perpetual care costs net of endowment support). Sales Comparison Approach Useful for benchmarking price per interment right, price per crypt/niche, or price per developed acre—adjusted for location, service mix, regulatory constraints, and endowment funding status. Because few assets are directly comparable, expect heavy qualitative adjustments. Cost Approach Helpful for valuing specialized improvements (mausoleums, chapels, columbaria, roads, ponds, walls, landscaping) and for testing replacement cost less physical , functional , and external obsolescence—especially in older parks. Endowment & Perpetual Care: The Valuation “Gotcha” Many jurisdictions require a portion of proceeds from interment sales to be deposited into endowment/perpetual care funds . Often only income (not principal) may be used for care, creating a persistent funding gap if investment returns lag rising costs. Key checks: Current market value of the endowment and recent contribution history . Spending policy (income-only vs. total-return), investment strategy, and governance. Alignment between future maintenance liabilities (paths, irrigation, trees, walls, crypt exteriors) and expected fund support. Any restricted gifts or donor-imposed limitations. Shortfalls require explicit recognition in the model—typically via the negative reversion or higher ongoing expense loads. Demand & Absorption Analysis: What to Measure Mortality and demographics: deaths per capita, age structure, migration patterns, household formation, cultural/religious composition. Service preferences: burial vs. cremation mix, crypt/niche uptake, green/natural burial interest, pet interment demand. Competitive landscape: active inventory by type, pricing tiers, pre-need vs. at-need sales, marketing practices, and historical absorption. Constraints: wetlands, karst/soil limitations, depth-to-water table, stormwater requirements, view sheds, historic designations, tree protections, and nighttime lighting/noise rules. Price Influencers for Ground, Crypts, and Niches Location within the park: proximity to water features, mature trees, chapels, roads, and prestigious sections. Monument type & material: marker vs. upright, granite vs. marble, custom sculpture. Indoor vs. outdoor: climate-controlled mausoleums and interior niches typically command premiums. View and exclusivity: family gardens, veterans’ sections, religious sections, or high-status courts. Service bundle: opening/closing, vault/liner, memorialization, perpetual care contributions, and financing terms. Special Cases Historic cemeteries: Often limited new sales but ongoing responsibilities; value ties to heritage significance , tourism/education programs, grants, and memorial events, offset by strict preservation requirements. Pet cemeteries & hybrid parks: Demand drivers, pricing, and regulatory frameworks can differ; operations may emphasize memorialization services and cremation options. Crematories: Stand-alone or on-site units bring air-quality permitting, stack testing, and public-perception considerations—plus distinct revenue and hours-of-operation profiles. Common Mistakes That Skew Value Treating the asset like a simple land subdivision without modeling perpetual maintenance . Ignoring contract language that limits resale/transfer or shifts maintenance obligations. Overlooking endowment shortfalls or assuming total-return spending where only income is permitted. Using generic cap rates not calibrated to sales pace risk, demographic shifts, and regulatory constraints . Underestimating infrastructure replacement cycles (roads, irrigation, retaining walls, crypt exteriors). Due Diligence Checklist (What We’ll Ask For) Organizational: ownership type (for-profit/nonprofit), corporate structure, historical financials (5+ years), pre-need liabilities, and trust statements. Legal: zoning/entitlements, plot/interment agreements, perpetual care covenants, environmental/historic restrictions, and crematory permits (if applicable). Physical: current site plan and remaining capacity by section, soils/hydrology reports, condition of improvements, and phase readiness. Market: price sheets, competitor survey, absorption history, and marketing plans. Trusts: endowment balances, contributions/withdrawals, spending policy, investment statements, and governance minutes (where available). The Outlook Cemeteries require large land areas and upfront capital, with revenues realized gradually over long absorption periods. Over time, functional , physical , and external obsolescence can accumulate—while the obligation to maintain grounds in perpetuity does not diminish. Endowment governance and prudent capital planning are therefore as critical to value as location and sales velocity. How Argianas Helps We build defensible, transparent valuation models that reflect: Realistic absorption and pricing by product type. Operating expenses and capital needs by phase. Endowment mechanics and perpetual-care obligations. Sensitivity to demand, regulation, and cost inflation. Have a tricky property and not sure where to begin? We’re dead serious about getting it right. Call the Argianas team at 630.390.0113 —we’re dying to talk to you!