The Secret to Successful Real Estate Projects: Proactive Board Engagement

Opinions expressed in AGB blogs are those of the authors and not necessarily those of the institutions that employ them or of AGB.

In a recent webinar, I explained that real estate is usually the largest part of an institution’s or related foundation’s balance sheet. However, many higher education governing boards spend too little time discussing the topic. They treat campus facilities and infrastructure as though they are “used assets,” but these are strategic assets that can help institutions meet their students’ changing needs and expectations.

Successful real estate projects require proactive board engagement. Trustees provide strategic, not operational, oversight. They do not run the project. Instead, they ask important questions and offer their strategic input. This transparency allows board members to be part of the team that champions the project and helps it succeed.

Proactive engagement builds champions, while reactive engagement builds conflict. When boards aren’t engaged throughout the process, it increases the strategic risk to the institution, not only in the short term, but potentially over the next 40 or 50 years.

Reactive	Proactive
Board excluded from deal formation Administrators develop full proposals; board is brought in at final approval only.	Board engaged from the outset Key members participate in request for proposals (RFP) and intent to negotiate (ITN) development, building ownership in the process.
Micromanagement triggered by surprises Lack of early trust leads to excessive scrutiny when details finally emerge.	Champions cultivated early Administration proactively identifies board members who understand and support the project.
Deals fail at the finish line No board champion; trustees form independent—sometimes misaligned—expectations.	Trust built before final vote Developers have opportunity to build relationships; no surprises at the approval stage.
Costly fallout for all parties Developers spend hundreds of thousands of dollars pursuing deals that collapse at board stage.	Clear governance boundaries maintained Board stays strategic; administration leads execution—roles never blur.
“Friends and family” partner selection Familiarity substitutes for due diligence, introducing inexperienced developers.	Stakeholder transparency throughout Regular project updates, clear communications, and shared milestones maintain confidence.

Involving board members in every stage of the project helps the board better understand and manage risk. To succeed, start with the end in mind—define success criteria before producing any RFP or ITN.

Stage One (Strategic Planning) – Define success criteria tied to institutional mission before any RFP is issued.
Stage Two (Project Conception) – The board sets parameters: debt capacity, risk tolerance, and asset classes in project scope.
Stage Three (Partner Search) – Board members may join evaluation committees; build relationships with finalists.
Stage Four (Deal Negotiation) – Regular updates to board; no surprises. Identify and cultivate board champions.
Stage Five (Approval Vote) – Board votes with full understanding, not as a first introduction to the deal.
Stage Six (Ongoing Oversight) – Regular operational reporting; board monitors performance against key performance indicators.

Finally, there are some key governance questions for every stage in this process. Boards may ask: Is this aligned with our mission? What problem does this solve? What are the short and long-term financial implications? Who are our partners, and how are risks shared? Do we have the right staffing to execute? What is our exit strategy?

Anthony Barbar is an AGB senior consultant, president and CEO of Barbar & Associates, a real-estate focused strategic advisory firm, and the author of Higher Education Real Estate Ventures. He was a member of the Florida Atlantic University Board of Trustees from 2008 to 2022 and served as chair from 2013 to 2020 and from 2021 to 2022.