2026 Report · 9th Annual
Higher Education P3 State of the Industry
Housing-anchored and mixed-use campus partnerships that reached financial close in calendar year 2025.
48%
Southeast
70%
Tax-exempt
~950
Average beds
$173M
Average deal size
$3.98B
Combined value
23
Deals closed
The State of P3 Higher Ed
The market has not gotten easier. It has gotten wider.
Twenty-three deals reached financial close in 2025, a 21 percent increase over the prior year and the strongest showing since 2019. Average deal size climbed to roughly $173 million, up from $130 million, and average beds per project rose to about 950, with a combined transaction value of $3.98 billion. But the recovery in volume tells only part of the story.
Elevated rates and construction costs have made projects harder to pencil, and developers are increasingly selective. The deals that closed did so because both sides resolved that tension deliberately, with clear objectives, appropriate structures, and partners who had done it before.
2026 Report Findings
Market Highlights
Volume recovered. Range expanded.
Deal count is back near pre-pandemic levels, but the spread of deal sizes in 2025 is unlike any prior year, running from a 185-bed second phase to a 2,500-bed program.
Institution Types
The broadest range of institutions yet.
Public four-year universities remain the core of the market, but the more telling shift is in the other half of the portfolio.
Activity by Region
The Southeast, again.
For the second consecutive year, nearly half of all closings occurred in the Southeast.
Financial Structure
Tax-exempt remains the workhorse.
Ground lease terms track the structure: 35 to 45 years for tax-exempt deals, stretching to 79 years for equity transactions.
Closed Deals
23 deals. 22 institutions.
Twenty-two institutions across 16 states. The University of Washington closed two, Blakely Village and Laurel Village. Circle size reflects bed count where reported.
Rated Projects
Nine of the 22 already carry an S&P rating.
Published project ratings for institutions in this year's portfolio. Four are investment grade; five are speculative.
What Lies Ahead
The agencies are evaluating this pipeline far more cautiously than in the past.
S&P Global Ratings has assigned 29 new project ratings since January 2023. Twelve came in below investment grade. Among the 22 covered by the agency's published April 2026 review, 10 of the 13 investment-grade ratings came in at 'BBB-', the lowest rung.
Every project that opened at or below 90 percent occupancy between 2015 and 2024 is rated speculative grade today, and roughly a quarter failed to reach 1.2x audited coverage in their first year open.
The caution applies to what is being built, not to what already exists.
Source: S&P Global Ratings, "U.S. Privatized Student Housing Credit Quality Improves On Stable Demand And Higher Coverage Although Risks Persist," April 29, 2026, updated by the agency through September 2026.
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