When graduate students at University of Maryland spend 50 to 76% of their stipends on rent, it signals a market gap that Teddy Abdelmalek and HH Red Stone are uniquely positioned to address. As universities scramble to house graduate students after years of neglecting this segment, private operators face a critical question: is this their opportunity, or should universities handle it themselves?

For Abdelmalek, Senior Vice President of Business Development at HH Red Stone, the answer lies in understanding public-private partnerships, commonly known as P3s.

“Universities don’t have the operational components to manage something of that magnitude,” Abdelmalek explains. “It’s financially exhaustive for them to find people to manage these properties. That’s where private operators come in.”

Private-public partnerships represent a growing trend where private management companies operate on-campus housing for universities. The structure typically involves a private developer financing and building the project, often using tax-exempt bonds, while a private operator like HH Red Stone manages the housing.

“The university provides the land, a private developer finances and builds it, and a private operator manages the housing under a long-term ground lease, often 100 years,” Abdelmalek details. “At some point, the university has the ability to exercise its rights to purchase that property from the developer.”

This model addresses a fundamental challenge universities face: they can’t tie up their balance sheet on housing when those funds are needed for academic priorities like classroom space and laboratories.

“Most universities have limited borrowing capacity, and the debt they use is reserved for academic priorities,” he notes. “Housing projects can cost hundreds of millions of dollars. If the university financed them, it would entirely consume their capacity for academic infrastructure.”

The shift toward P3 partnerships stems from several financial and operational realities. Universities want to avoid using institutional debt while still delivering modern housing to students. Private developers raise capital through tax-exempt bonds or private equity, keeping the housing off the university’s balance sheet and preserving their credit rating.

“You want to grow your enrollment, so you have to build classroom space, but you also have to build housing to recruit people to your university,” Abdelmalek explains. “You have to be able to house them academically before you house them physically.”

Beyond finances, universities recognize that private operators bring specialized expertise. “Private student housing developers know what students want. They know what the finishes should look like. They know what attracts students,” he says. “Sometimes the university is out of the loop, but if you have someone who’s done this several times, they know where the pitfalls are.”

Speed represents another critical advantage. University committees and public spending rules create hurdles that can delay projects for years. “By using a private developer, you can jump through those hurdles much faster,” Abdelmalek notes. “This matters when you have a surge in enrollment, housing shortage, or residence halls that need replacement.”

While on-campus P3s represent one model, affiliated housing offers another approach where properties carry university branding but operate with limited university ownership. Bond holders often own these properties, with specific requirements depending on whether tax-exempt or non-tax-exempt bonds finance the project.

“For tax-exempt bonds, certain people have to live there,” Abdelmalek explains. “Non-tax-exempt bonds allow anyone to live there, whether students or non-students.”

As universities finally recognize the graduate housing crisis, with students spending the majority of their stipends on rent, the market is opening for operators who understand both institutional needs and operational excellence.

Abdelmalek recently submitted a proposal to manage on-campus housing at a large top-tier institution, demonstrating how this segment is expanding. “P3 partnerships are growing at major universities because private operators have really mainstreamed how to run properties and turned it into more of a business,” he observes. “Universities don’t really have that expertise in managing real estate. They’re more about resident experience and the overall life cycle of the resident.”

For operators considering this space, Abdelmalek’s advice is clear: success requires balancing institutional partnerships with operational expertise, recognizing that universities need partners who can deliver both financial performance and a genuine resident experience.

“It’s less about outsourcing the housing and more about protecting the university’s balance sheet while delivering something new to the university,” he concludes. Teddy Abdelmalek is Senior Vice President of Business Development at HH Red Stone. HH Red Stone is the property management arm of HH Group, managing approximately 10,000 beds across multiple asset classes, including student housing, multifamily, affordable, and mixed-use properties nationwide. After a decade of exclusively managing HH Group’s owned portfolio, the company launched its third-party management vertical to serve other owners with the same institutional-grade approach it applies to its own assets.

Disclosure: Individuals or companies mentioned may have a commercial relationship with KeyCrew.

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