Universities Are Sitting on a Goldmine of Unused Space, JLL Survey Reveals

Colleges and universities across the United States are grappling with a severe financial squeeze, driven by unpredictable enrollment shifts and escalating operational costs. However, a new industry report suggests that the key to financial stabilization may already be under their control—in the form of massively underutilized real estate. According to Connect CRE, JLL's inaugural 2025 Higher Education Portfolio Benchmarking Survey highlights that campus physical space is consistently underperforming, largely because administrators lack a granular understanding of how their buildings are actually utilized by students and faculty.

Key Details

The recently published survey by JLL pulls back the curtain on the spatial inefficiencies plaguing higher education. The report aggregates data from a wide array of colleges and universities, pinpointing a systemic disconnect between space provision and actual campus usage. According to the report, institutions routinely maintain excess square footage that does not align with modern academic needs or hybrid learning realities. The core finding revolves around space utilization metrics, which reveal that many campus buildings sit largely empty during peak operational hours. By failing to track actual foot traffic versus assigned capacity, universities are essentially subsidizing vacant rooms. The data suggests that institutions operating without robust spatial analytics are at a distinct disadvantage, pouring limited budget dollars into the maintenance, utilities, and upkeep of unneeded infrastructure.

Market Context

For commercial real estate professionals, JLL's findings signal a ripe, expanding sector for adaptive reuse and strategic portfolio management. The academic real estate sector is currently undergoing a structural shift that mirrors the hybrid work transitions seen in the corporate office market. As universities face strict budget tightening, the imperative to monetize or shed non-performing assets has never been stronger.

CRE firms specializing in public-private partnerships (P3s) are uniquely positioned to step in. Underutilized dormitories, outdated administrative buildings, and vacant academic wings present prime candidates for conversion into mixed-use developments, affordable housing, or life science labs. Furthermore, the JLL survey implies a growing demand for proptech analytics tailored to the education sector. Brokerages and property managers that can offer concrete, data-driven utilization strategies to university boards will find a highly receptive clientele. Instead of simply managing existing portfolios, the industry has an opportunity to actively reposition these assets, taking heavy maintenance burdens off institutional balance sheets while generating new commercial tax revenue for local municipalities.

Ultimately, as the higher education landscape continues to evolve, institutional leaders can no longer afford to treat their sprawling campuses as untouchable sacred cows. Unlocking the trapped value in these portfolios is fast becoming a prerequisite for long-term institutional survival, marking a major pivot point for academic real estate strategies nationwide.