PhillyDeals: Drexel University plans to redirect its expansion

Drexel University's next "campus master plan" will shift the school's focus on expansion away from West Philly and toward Center City.

"North traditionally was where Drexel expanded, up to Powelton Avenue," the school's new president, John Fry, said Monday, through West Philly blocks now crammed with student rentals.

Now Fry wants to redevelop parts of Drexel's "core," including the orange-brick buildings that still give parts of the campus a 1960s feel, and expand east toward the Amtrak yards and the old office buildings between Drexel and the Schuylkill.

"If you could pick a better location than the neighborhood around 30th Street Station, I'd like to hear about it," said Fry, as we spoke in his Chestnut Street office. "A lot of very interesting properties are there."

Where will Drexel get the money?

"You're going to see a lot of partnerships between ourselves and developers," said Fry, the former president of Lancaster's Franklin and Marshall College. Before running F&M, Fry arranged private housing and retail development as a top administrator at the University of Pennsylvania.

Do colleges really need more buildings, now that so many courses are delivered online?

"You're always going to have those people who feel the [need for] the experiential part of college, the maturation, establishing who they are, that's a really good thing there," Fry said. "Hopefully, we can continue to make that successful. Of course, I'm biased."

Drexel is "trying to hedge our bets" with its own online courses," Fry said. "No one owns the future."

Observers such as Bill Gross, managing director at Pacific Investment Management Co. (PIMCO), the $1 trillion-plus California-based investment manager, have been urging Americans to scrap costly, debt-financed, four-year liberal-arts degree programs in favor of what Gross calls "mid-tech" math, computer, and job-skills training.

You'd think that would resonate at Drexel, with its engineering base. But Fry says he wants to grow, not shrink, Drexel's modest humanities program. He cited Securities and Exchange Commission top cop Mary Schapiro's graduation address to Drexel business students earlier this month, where she urged grads to apply the ethical principles taught at schools against peer pressure to steal and lie in corporate America.

Humanities programs "need to be excellent," Fry concluded. "They're the people who ask the long-term questions dealing with historical perspective, policy, philosophy, the good of an institution. How do we wrap that together?"

How tough are things in the commercial real estate business? I asked veteran broker Peter Davisson, founding principal at Jackson-Cross Partners L.L.C., located in King of Prussia and Wilmington.

"It used to be we'd hire a young person with three years of corporate experience - trained by IBM, say, or one of the big banks, [pay] a $25,000 or $30,000 draw, plus commission, a percentage of sales or leases," Davisson said. "It would take them maybe three years to start making real money from commissions."

But that was before the market collapsed in 2007.

"The big national firms and the local firms are making them work all-commission," Davisson said, describing the new arrangements. "You don't sell, you don't get paid. The young people have to have savings, or they have to be living with mom and dad, or they just can't do it."

Price-chopping competition among property-and-casualty insurers could mean another round of big losses for the industry, warns Evan Greenberg, boss of Ace Ltd., the Swiss-based multinational insurer whose biggest employment center is in Old City Philadelphia. Ace is a successor to the old Insurance Co. of North America.

Greenberg's company "has been shocked at the feeding frenzy that has been occurring for new business," writes analyst Paul Newsome, in a report to clients of Sandler O'Neill + Partners L.P., after meeting with Greenberg last week.

What Greenberg calls "irrational underwriting" has hurt business for "responsible companies" like Ace that won't write policies at premium levels that they don't think will cover future claims, costs, and profits, Newsome added. As a result, Ace's new business has dropped 50 percent a year in each of the last two years.