WILMINGTON – The Delaware College of Art & Design recently sold its 707 Residence Hall to an investor and will lease it back to raise capital for the small private arts college.
DCAD sold the building at 707 N. King St., which is also home to its dining hall, for $3.5 million on May 30, according to county land records. The buyer was VB-T Wilmington Realty LLC, which has connections to local real estate investor Sailesh Patel.
The college will reportedly lease back the dormitory adjacent to its main campus building on Market Street for an initial seven-year term, with options for extension. In doing so, it will continue to benefit from a $1.2 million renovation of the building’s HVAC system funded by a Longwood Foundation grant last year.
DCAD President Jean Dahlgren told Delaware Business Times that the sale of the college’s last building aside from its historic main campus building was meant to streamline its responsibilities.
“We’ve never been good at managing buildings. Our main mission is education, and we provide housing because we do attract students from a variety of mid-Atlantic states,” she explained. “We want to continue to do that, but the management of the building will be better suited to someone who’s in that space.”
Sale-leasebacks for university uses are common, and employed by other institutions in Delaware, but other small metropolitan art schools, including the Pennsylvania College of Art & Design in Lancaster, Pa., choose not to offer room and board. Those students are required to commute or find their own living arrangements near campus.
While Wilmington has seen a surge of new apartment development in the Market Street corridor surrounding the DCAD campus in the last few years, those projects have also increased the cost of renting – something that could be a deterrent to a young art student.
With upward of 65% of students living in the dorms, Dahlgren said the college was cognizant of the impact of offering room and board for students at a more manageable cost. The college offers room and board for between $1,100 and $1,166, depending on the suite style, while rents alone in downtown Wilmington are commonly advertised at $1,500 a month or more.
The infusion of new capital into the college from the real estate sale will be put to use, Dahlgren said. One of the first initiatives for the funds is to give adjunct faculty, who make up the majority of DCAD’s professors, their first pay raise in many years.
