Colleges can Survive the Higher Ed Crisis by Re-Inventing their Campus
Unlocking the Future: How Small Colleges Can Turn Real Estate into Revenue
Small liberal arts colleges are at a crossroads. Since 2004, over 900 U.S. colleges have closed, with enrollment declines and financial deficits pushing many to the brink. By 2030, nearly half of colleges could see enrollments drop by 25-50%. But there’s hope: campus real estate—land, buildings, and facilities—holds untapped potential to generate revenue and secure a college’s future without sacrificing its mission.
In our latest white paper, “Asset Reuse Strategies for Distressed Small Liberal Arts Colleges” (July 2025), we outline actionable strategies for colleges to leverage their assets. Here’s a snapshot:
📊 The Challenge: Small colleges (especially those with <2,200 students) face rising closure risks. In 2023, 99 colleges shut down, up from 32 in 2020. Many lose $15,000 per student annually due to operating costs outpacing tuition revenue.
🛠️ The Solution: Creative asset reuse can transform campuses into revenue engines. Options include:
Leasing/Selling: Turn vacant dorms or classrooms into office spaces, labs, or community hubs, yielding 5-7% annual returns on asset value.
Joint Ventures: Partner with healthcare providers or employers for wellness centers or workforce training programs, blending mission and income.
Public-Private Partnerships (P3): Develop mixed-use housing or conference centers, like Goucher College’s 127-unit senior living community, funded by private partners.
Converting Facilities: Repurpose dorms for summer rentals or innovation hubs for startups, creating steady cash flow.
🏛️ Case Studies:
Becker College (MA): Sold its campus for $32.4M to clear debt, showing the value locked in real estate.
Goucher College (MD): Partnered with Edenwald Senior Living for a retirement community, bringing lease income and campus vitality.
🔑 Tiered Risk Framework: Colleges can assess their urgency (imminent, near-term, or long-term risk) to prioritize actions. Immediate steps for Tier 1 colleges (0-2 years from insolvency) include ground leases or sale-leasebacks for quick cash infusions.
🌟 Mission Alignment: Every strategy should reinforce the college’s ethos. A wellness center or community housing project can embody lifelong learning and service while generating funds.
At Knowledge Towns, we specialize in helping colleges navigate these challenges. Our services include strategic master plans, financing strategies, and partnerships to transform campuses into vibrant, sustainable Knowledge Neighborhoods™. By leveraging real estate, colleges can not only survive but thrive.
📢 Ready to explore? Contact us at dominic@knowledgetowns.com or nick@knowledgetowns.com to discuss how your institution can unlock its real estate potential.
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