Capella to Expand in Namesake Tower

Capella University’s enrollment has increased about 68 percent in the past two years to 37,000 learners, up from 22,000.

From the time it announced its lease expansion in 2008 until now, Capella’s stock, which is traded on the Nasdaq exchange under the symbol CPLA, has increased to about $85.58 per share, up more than 50 percent from $55.28 per share. The company’s market capitalization value is now more than $1.5 billion.

Not bad for the 17-year-old college that doesn’t have any classrooms or a football team.

What it does have is about 1,100 faculty members teaching 1,250 courses in 42 degree programs. It has students from all 50 states and 52 other countries who are earning degrees in fields such as business, education, public safety, nursing and information technology.

In 2009, Capella introduced a School of Public Service Leadership and it expanded its doctorate programs to include business administration and social work.

In fiscal 2009, Capella’s reported revenue of $334.6 million, a 23 percent increase from $272.3 million in 2008. Its net income of $42.7 million was up 48 percent compared to $28.7 million in 2008. Capella attributed the increased earnings to higher enrollment, small increases in its tuition and lower expenses as a percentage of revenue.

Kevin Gilligan, chairman and CEO of Capella, told analysts in the company’s year-end conference call in February that Capella’s business model has historically not benefited from a weaker or stronger economy.

In a recession, revenue is hurt because students take fewer classes, but it’s helped because more people enroll, especially for bachelor’s degree programs.

The average age of Capella students is 39. Three out of four students are female and 80 percent of students are pursuing advanced-level degrees, such as doctorates or MBAs, according to the school.

Boosts occupancy for tower
Capella Tower is one of the most recognizable buildings in the state, thanks to its height — 58 stories — and its distinctive “halo” feature.

The rentable area in the 18-year-old building is 1.4 million square feet. A new 90,000-square-foot lease in the building would translate into a 5 percent bump in occupancy, putting it close to 90 percent.

For the past several months, Capella Tower’s owners have been considering upgrades to its common areas, including adding a fitness center to the main floor.

The fitness center plans haven’t been finalized, Christianson said, but to make room, the Au Bon Pain restaurant on the ground floor has announced plans to relocate into the former SoupMan space on the skyway level.

MINNEAPOLIS ST. PAUL BUSINESS JOURNAL