In the battle to stay high (or climb higher) in the all-powerful U.S. News law school rankings, law schools compete with each other to woo star faculty. And this makes sense. Because a school’s peer reputation score “appears to explain around 90% of the variation in overall USNWR score,” as noted by Professor Eric Talley over at TaxProf Blog, it pays for a law school to snag top talent.
How does a law school prevail in the battle for superstars? Well, despite their impressive academic pedigrees and their Big Ideas, law professors just like us: they love luxury real estate.
News of the acquisition was broken by the International Business Times:
New York University School of Law has purchased an Upper West Side condo at 845 West End Avenue for $3.6 million, according to city records filed Thursday. The school will use the apartment for faculty, who will rent the unit, according to Michael Orey, spokesman for NYU Law.
“Most of the units we purchase are quite close to the law school, but occasionally we purchase elsewhere in the city, as well,” Orey wrote in an email.
The apartment has a central gallery, a kitchen with stainless steel refrigerator, limestone countertops and wood cabinets, according to the listing. The four bedrooms have ensuite baths with Calacatta gold and marble, as well as radiant heat floors. It had an asking price of $3.75 million.
We reached out to Orey as well. He provided us with this background on the purchase:
There is nothing new about NYU — or any other major university — providing faculty with housing assistance, and this may include the purchase of properties that the school then leases to professors. NYU Law competes for talent in a national market. Our location in New York City is one of our greatest assets, but obviously real estate here is expensive. To attract and retain leading scholars, the law school — like many others around the country — may assist faculty with housing. Over the last ten years, the size of NYU Law’s faculty has grown from 83 to 107, so it’s not surprising that we’ve added to our housing inventory. The value of real estate owned by the law school has appreciated over time.
He’s absolutely right that there’s nothing new about this practice. We have previously covered the law school’s purchases of a $3.5 million condo in the West Village and a $5.2 million apartment on the Upper West Side (housed inside the turret of a French Renaissance chateau).
Some observers might question the propriety of NYU Law School dropping millions of dollars on luxury real estate while its students pay $74,704 a year to go there and sometimes end up jobless (after getting rejected by Target). I do not count myself in this camp.
First, there is reason to believe that the joblessness problem among NYU law graduates has been significantly overstated. Second, as discussed above, securing top faculty is important to maintaining NYU’s elite reputation and ranking (which help graduates land jobs).
Third, a question for those more knowledgeable than I am: Do these million-dollar real estate purchases get factored into expenditures per student under the U.S. News ranking methodology, perhaps under the “all other items” catchall? As we’ve previously discussed, such spending plays an important role in the rankings process. The fact that increased spending by a law school (including increased financial aid) gets factored into the rankings may bolster Professor Paul Campos’s bold idea that Stanford could become the #1 school by slashing its tuition by 30 percent.
Okay, back to the real estate. The full listing for NYU’s newest apartment, which was sold by the powerhouse Corcoran brokerage firm, is available here. Let’s take a tour of the 2,600 square feet (and view the floor plan)….