LSU officials are expected to finalize by the end of this month a deal that will clear the way for the rapidly growing LSU Online department, currently located in Pleasant Hall, to move into 21,000 square feet of new space in the Louisiana Emerging Technology Center—a building at 340 East Parker Blvd. owned by a quasi-independent affiliate of the university.
Under the terms of the deal, which was approved by the Board of Supervisors in December, LSU Continuing Education, the umbrella entity over LSU Online, will lease the space from the LSU Research Foundation for $34.50 per square foot—a rate far higher than anything else in the Baton Rouge market.
Even in the priciest Class A office space downtown—the IBM building, the CPRA building at the Water Campus and II City Plaza—lease rates tap out at around $30 per square foot.
Why is one arm of LSU charging another so much for rent?
LSU officials say the five-year lease, which has a five-year renewal option, isn’t as out of whack with market comps as it first appears. That’s because the base rent will be only $24.50 per square foot and includes the cost of a $10-per-square-foot buildout.
Even $24.50 per square foot, however, is considerably more expensive than what LSU charges most of its affiliate organizations for space on campus, where the average price in an older building is generally around $12 per square foot.
LSU officials cannot say what LSU Continuing Education currently pays to the university for the Pleasant Hall space and whether it is within the $12-per-square-foot range. But they say the deal with the Research Foundation for the LETC office space is more than worth the additional cost, which they insist will not be passed on to students.
What’s more, they say LSU Online needs a large, contiguous space to accommodate its rapidly growing department. It also needs to vacate the outdated Pleasant Hall, which will temporarily be home to the College of Education and Human Sciences, while its current facility is under renovation.
“Pleasant Hall was formerly a women’s dorm and then it was a hotel,” says Sasha Thackaberry, vice president for online and distance education. “It has unusable space all over the place. Many of us have multiple closets and nonfunctioning bathrooms with bathtubs in our offices. There are thousands of square feet of completely nonfunctional space.”
The new space in the LETC building will accommodate a variety of departments and programs under Continuing Education, including all distance learning, support for faculty that utilize online teaching, blended courses, professional development and community programs for pre-college students, lifelong learners and leisure class participants.
“This is truly a smart investment in growth at the right time,” Thackaberry says. “It is the only space that we could find that would work for our needs.”
She adds that LSU Online alone has exceeded its growth targets this year, enrolling more than 1,300 students, compared to its goal of 1,200, and generating $16 million—$2 million more than was budgeted.
The new tenants are expected to be a boon for the LSU Research Foundation, which tried unsuccessfully for more than two years to attract private tech tenants to the LETC building.
