Harrison Street, U. of San Diego to Partner for On-Campus Housing

Harrison Street Asset Management and The Michaels Organization have formed a public-private partnership agreement with the University of San Diego to build the Presidio Terrace Apartments, a planned new $230 million, 321-unit, 700-bed on-campus student housing development. The investment represents the first transaction completed through Harrison Street’s dedicated public-private partnership strategy, as well as USD’s first-ever PPP agreement.

Located on USD’s campus between the University’s academic center and a nearby retail corridor, Presidio Terrace will be the University’s latest on-campus residential facility purpose-built for upperclassmen, graduate and professional students. The development is expected to be completed in August 2029.

“Presidio Terrace is a strong example of how PPPs can help universities address critical infrastructure needs, creating a win-win situation for academic institutions, investors, and college communities,” said Jim Hennessy, head of PPP business development at Harrison Street. “Today, we are seeing more PPP activity than ever before, as more universities recognize that these structures allow them to focus on their core academic mission while conserving capital and transferring operational responsibilities to a private partner.”

The project is structured through a 99-year ground lease with USD and will benefit from a full real estate tax exemption as a University-affiliated facility. The property will be developed and operated by Michaels, with which Harrison Street has an extensive prior relationship and track record.

Harrison Street, which is one of the largest owners of on-campus housing nationally, has been a long-term leader in the public-private partnership space, working with universities and other mission-driven institutions to develop and finance critical infrastructure while allowing those organizations to preserve capital for their core missions. The firm has secured partnerships with more than 20 other universities, including Northwestern University, Duquesne University, Duke University, Arizona State University, the University of Kentucky, and Missouri State University. Across its platform, Harrison Street has completed 64 PPP transactions, building deep experience structuring long-duration partnerships that align the interests of institutions, investors, developers and end users. Over 40% of Harrison Street’s higher education PPP pipeline consists of opportunities with existing university partners considering their second or third PPP with the firm.

Leveraging decades of experience investing across student housing and academic infrastructure, Harrison Street seeks opportunities that support the evolving needs of universities and institutional partners. The firm focuses on investments where private capital and operational expertise can help institutions address capital requirements, enhance infrastructure and adapt to changing enrollment and campus needs without diverting resources from their primary missions.

“We’ve focused on real asset innovation since our founding in 2005. In 2018, we saw another pioneering opportunity to launch a PPP business to help universities modernize and expand essential infrastructure through well-structured public-private partnerships,” said Christopher Merrill, Co-Founder & Global CEO of Harrison Street. “Presidio Terrace reflects the continued evolution of our investment capabilities in the higher education sector and builds on Harrison Street’s long history of innovation and serving as a partner of choice for on-campus student housing and other mission-critical social infrastructure.”

The University of San Diego has experienced strong recent enrollment trends in recent years, with total enrollment increasing 13.2% since 2020, alongside significant growth in applications. In addition to its leading position as a PPP infrastructure investor, Harrison Street is an innovator in the student housing market more broadly, and one of the largest private owners of off campus student housing globally. Since inception, the firm’s alternative real assets strategy has invested over $24 billion across 432 student housing properties, totaling more than 237,000 beds throughout North America and Europe.