In October of 2012, the Apollo Group, owner of the University of Phoenix which is the largest player in the for-profit education industry, announced that it would address declining UOP enrollment by restructuring its portfolio of classroom facilities. It forecasted that restructuring costs would be $175 million, principally related to lease exits, but that savings from salaries, real estate and other expenses would be at least $300 million annually. The next challenge was to manage the nationwide restructuring program that would involve almost every one of UOP’s 227 locations.
In 2011, Bob Cook, now Senior Vice President of Strategic Planning for Colliers International, had joined the Apollo Group as Vice President of Real Estate Strategy and he would coordinate the multi-location, multi-disciplinary effort required to implement the restructuring plan. The plan involved closing 115 locations and rightsizing most of the remaining 112 locations in order to address the oversupply of space.
Implementation of the portfolio plan and the individual right-sizing plans required coordination and prioritization of a broad scope of activities. Almost every one of the 227 locations required one or more real estate actions. Among these actions were design & construction, decommissioning & restorations, moving furniture & equipment, landlord buyouts, subleasing, lease renewals & extensions, and financial forecasting to support public disclosures and financial statements. By late 2013, most of the portfolio plan and the individual location right-sizing plans had been completed.
In July of 2013, Apollo Group announced that savings from the restructuring program would be $400 million annually, up from the original estimate of $300 million. Much of this additional savings resulted from the effective implementation of the real estate plans. Of the $400 million of expected stabilized annual savings, Apollo expected to realize $300 million during its FY2013 -- a strong contribution to net income which was forecasted to be only $525 to $550 million for that fiscal year.
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