Small Colleges Are Dying. Developers See Opportunity

Small colleges are closing around the country, not only leaving students looking for a new place to study but leaving communities with large pieces of real estate to reimagine.

Closure announcements over the past month from Hampshire College and Anna Maria College in Western Massachusetts are the latest in a wave of shuttered small colleges that have left campuses unused.  

Nearly 300 colleges and universities closed between 2008 and 2023, according to The Hechinger Report. And more than 400 additional private, nonprofit four-year colleges and universities — most of which are small and rural — are expected to close over the next decade, Huron Consulting Group projects.

As more colleges close, the thousands of acres of real estate they leave behind could present opportunities for local communities and developers. The residential, academic and faculty buildings these colleges vacate could also be scooped up by big schools that have more money and are looking to expand.

"There's a continued bifurcation of higher ed between those universities that you know are well endowed and have the ability to weather the storm and those that don't," JLL Head of Nonprofit, Education & Government Practice for the Tri-State Area David Carlos said. "You're going to continue to see this chasm between the haves and the have-nots."

When a campus is left behind, there are many ways to reuse it. Another college may take it over, it may be redeveloped into housing, or some other type of adaptive reuse project may take place.

Some municipalities have been quick to act, especially if the college was their primary economic driver.

Carlos advised the College of Saint Rose in Albany, New York, as it wound down operations and closed in 2024. Albany County acquired the campus in an effort to reallocate parts of the campus for new uses.

Pine Hills Neighborhood Association, which was tasked by the county's land authority with redeveloping the former campus, sold the Massry Center for the Arts to Hudson Valley Community College and is reusing other facilities for office and community services for Albany County officials.

Now, the association is looking to sell off roughly 50 residential properties, WAMC Northeast Public Radio reported Friday.

Last week, Wagner College agreed to buy the Staten Island campus of St. John's University that closed in May 2024. Wagner said it plans to grow in the space but didn't give any specifics as to what that growth could look like.

At the beginning of the year, Tennessee-based Vanderbilt University acquired the California College of the Arts in San Francisco as part of its expansion efforts, Higher Ed Dive reported. The school hopes to serve around 1,000 students at the campus.

In May 2024, Northeastern University acquired Marymount Manhattan College, expanding the Boston-based university into New York City.

"You've seen some of them take advantage of what's happening," Carlos said. "You have well-sourced institutions that are keeping a very close eye on what's happening with some of these institutions and some of these smaller institutions that are not, perhaps, doing so well, having many conversations as potential acquisition targets."

However, the sales of college campus properties can be tricky to balance as many deals are dependent on location, party interests and what uses are acceptable on the site.

Several shuttered campuses remain desolate, unused properties, Bloomberg reported. Most of these are located in less-populated areas of the country or have severe deferred maintenance that makes them hard to renovate.

In Lancaster, Massachusetts, Atlantic Union College closed in 2018, leaving behind a 130-acre campus. The residential portion of the campus was sold in 2021, but the other 15-building portion remains boarded up and vacant.

In Bristol, Virginia, the former campus of Virginia Intermont College has sat vacant for almost 12 years, with properties falling into deterioration and vandalism, Cardinal News reported. Owner U.S. Magis International said it has made progress in trying to redevelop the campus, hiring an architect and security to avoid further vandalism.

Most of the issues for these long-vacant properties come from their location and the deferred maintenance that adds financial strain for potential owners looking to redevelop.

"Developers don't want to take that on, but it really is location-specific," said Brailsford & Dunlavey President Jeff Turner, who advises institutions on their real estate strategies.

Other campuses are well located, but local politics make it difficult to build larger projects on the site.

In Quincy, Massachusetts, miles outside of Boston, the former Eastern Nazarene campus was set to be bought by local developer Crain Co. for a mixed-use redevelopment. However, the deal fell through after pushback from the city.

At the beginning of the month, the city agreed to buy the 27-acre campus for roughly $21M in an effort to block any high-density development. Plans for the site are unknown, but the campus is home to 14 academic and faculty buildings as well as 14 residential properties.

Some shuttered campuses have sold to developers: Urban Land Conservancy in 2021 purchased the 25-acre Johnson & Wales University campus outside Denver, and BH Properties in 2023 acquired the 60-acre Holy Names University campus in Oakland.

Developers looking to acquire the next wave of closed campuses can gauge the warning signs for regional colleges eyeing the shrinkage of high school graduation classes in the area, Turner said.

In New England, roughly 32 colleges have shuttered in the past decade, the Boston Business Journal reported. Most recently, Hampshire College and Anna Maria College in Western Massachusetts had roughly 1,900 students impacted by the closures announced over the past month. 

The Northeast and Midwest regions recorded a 5% and 3.1% decrease, respectively, in elementary and secondary school enrollment between 2014 and 2026, according to the National Center for Education Statistics. However, the South and West posted an 8.3% and 4.3% increase.

"High school graduation rates, particularly in the Northeast and Midwest, have hit the proverbial enrollment cliff, and it's impacting a lot of the smaller schools," Turner said.

Some large state university systems are consolidating and closing satellite campuses to focus on their core infrastructure.

Pennsylvania State University officials reportedly will close seven of the university's commonwealth campuses at the end of the 2026-27 academic year. Those campuses have faced declining enrollment, with fall headcounts dropping 12.4% to 23,257 students between 2020 and 2024, according to Higher Ed Dive.

To continue operating the campuses would have required $40M annually and $200M in facility investments.

The University of Wisconsin announced plans in October to close one of its two-year college campuses, Wisconsin Public Radio reported. Months prior, the school closed its Baraboo Sauk County campus, citing declining enrollment.

The opposite can be said for large schools in the South and West, which are actually reporting an uptick in enrollment.

The University of Virginia said in January it had a record 57,500 students applying for just over 7,000 slots in its early action admission cycle, UVA Today reported. The University of California and the University of Houston have also reported growing numbers of applicants.  

Some schools that are consolidating are working with local developers to address the overall housing crisis while also offloading real estate they no longer need.

In 2024, the University of Massachusetts Lowell unveiled plans for an $800M mixed-use project including more than 500 housing units that would redevelop part of its campus, the BBJ reported.

Earlier this month, Salem State University and AvalonBay Communities received approval from Salem officials to convert part of the university's campus into 340 luxury apartments.

Newmark Executive Vice Chairman Ryan Lang said other schools have converted older housing stock into market-rate units to help alleviate the local housing crunch.

"It's adding additional units to the city or to the town, which, in some ways, can help bring costs in," Lang said. "It certainly can be a net benefit."