At a busy intersection in North Miami, a vacant four-story former student-housing building painted in white, citron yellow and the blue-gray of cloudy skies offers a reminder of bygone times.
A few blocks north, three more buildings, with exteriors splashed in the same palette, also are empty. Likewise, farther north, a three-story building with peeling white paint is free from the buzz of college students.
The rectangular structures, harking back to the 1960s and ‘70s, are among the remnant’s of Johnson & Wales University’s campus. When the school closed last year, many saw its 25-acre property, dedicated to training South Florida’s hospitality workforce, as a loss.
Except for developers.
IMC Equity Group, which bought several of the campus’ dormitories, administrative offices and parking lots, saw it as an entrée to the quickly redeveloping market of North Miami.
“It was a very good play,” said Carlos Segrera of IMC, which paid $29.2 million for several JWU properties. “It was a very good price.”
As costs for South Florida development sites have skyrocketed amid a real estate boom, developers have zeroed in on university campuses as the next frontier, offering a respite from the land crunch.
Their plan is to repurpose buildings — turning student housing into apartments, and athletic fields into public parks.
Over the past year and a half, developers have scooped up three campuses in South Florida, either in part or in their entirety. Although these were as rare as four-leaf clovers for builders who plan to reimagine them, more opportunities could be on tap, as student enrollment has declined nationally since 2020.
Many college campuses have become “functionally obsolete,” said William Hardin, dean of Florida International University’s business school and a real estate expert. “Distance education choices driven by technology … are the norm. Hence, they need to be repurposed.”
Familiar play
It’s a story Floridians have seen before: An industry experiences a shift in its business model, opening up development opportunities.
The state has long held the top spot for its number of golf courses, but as some became money-losing operations, it didn’t take long for developers to notice.
Over 20 South Florida courses have been scooped up for redevelopment in the past five years, according to The Real Deal and other news outlets.
Much as fairways and greens offer sprawling development sites, so do college campuses.
When Ari Pearl’s PPG Development sought to make a comeback in North Miami Beach, where it developed years ago, it found an opening in Nova Southeastern University’s campus. It bought the campus from Dezer Development. Nova expects to relocate its remaining programs next summer.
“You can’t find another 8.8-acre development site in the city of North Miami Beach, unless it’s a school campus,” Pearl said.
PPG, along with Matt Press of EquiShares and Isaac Khabie of ARK Ventures, plans a roughly 700-unit apartment complex on the site.
Unlike golf courses, university properties that have recently traded are in central locations.
In West Palm Beach, Hines and Frisbie Group found an opportunity at a still-open college for a waterfront site, a quickly disappearing commodity in South Florida. The pair of unused dorms at Palm Beach Atlantic University that the duo will redevelop are just south of downtown and overlook the Lake Worth Lagoon and mansion-studded Palm Beach.
They also are five blocks from the One Flagler office tower that Stephen Ross’ Related Companies is building, dubbed the “hedge fund tower” for the financial firms it’s expected to attract. As downtown West Palm has earned the moniker of “Wall Street of the South,” becoming a magnet for wealth managers and investment funds, the city and surrounding areas also have become home to their executives.
Condos at Hines and Frisbie’s pair of planned 28-story South Flagler House buildings start at $10 million.
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Flips on flips
Kevin Maloney’s Property Markets Group beat more than 15 investors clamoring for JWU’s campus, whose size roughly equates to that of the bustling retail and residential Midtown Miami. Then PMG started to flip JWU properties. And then it flipped some more.
That strategy was “brilliant,” said Jimmy Tate, whose Tate Capital was among the companies to scoop up a portion of the campus from PMG. “There was a lot of meat on that bone.”
PMG sold the school’s recreation center for $10.7 million in January, more than double the $4.5 million it paid four months earlier. PMG also sold three vacant campus lots for $10 million in October, more than a fourfold gain in three months for PMG, which had paid $2.5 million for these and three other JWU properties.
As for IMC, it’s planning to flip a university parking lot to Jorge Pérez’s Related Group, which wants to build 382 apartments on the site.
For the rest of its project, IMC is converting 177 dorm units into apartments in seven buildings. And it plans to build 340 apartments, in what Segrera called “the icing on the cake for our business plan.”
School’s out
Universities across the U.S. have been scrambling to recruit students at a time when more high-schoolers are turned off by high tuition costs and the prospect of earning more through other avenues, such as vocational schools.
Undergraduate student enrollment declined almost 5 percent nationally this spring, marking a drop for the fifth semester in a row, according to the National Student Clearinghouse Research Center, a nonprofit data provider that partners with states and universities.
Enrollment has dropped 9.4 percent, or 1.4 million students, since 2020, and South Florida is home to more than a dozen colleges, many with several sprawling campuses.
Miami Dade College, which has eight campuses and two education centers, saw enrollment for the fall semester decline by almost 13 percent last year compared with 2019, according to the school’s data. The count for this fall has yet to be finalized, although Miami Dade says enrollment is trending up 6 percent compared with last fall.
While an opportunity like JWU only comes “once in a while,” Segrera is hopeful that another chance will arise.
“It’s got to have similar characteristics like this one,” he said. “If you know some, please give.”