Higher education and campus life are evolving. With fewer students enrolling nationwide, more online options, and ever-increasing costs, many schools are rethinking their approach to generate revenue and attract students. One creative solution gaining traction is adaptive reuse.
Traditionally, and like other sectors, institutions have sold real estate assets when they no longer serve a useful purpose for the school. George Washington University, for example, recently sold its Virginia Science and Technology Campus to Amazon Data Services for $427 million for plans to develop a data center on the property.[1] These sales have generated material assets for the owner institution and enabled those institutions to reinvest those proceeds into educational purposes.
Adaptive Reuse
Adaptive reuse is the process of taking existing buildings and giving them new purposes rather than tearing them down and building something new. Instead of razing buildings that no longer serve campus populations (e.g., reduction in need for classrooms as courses become available online), adaptive reuse gives schools the opportunity to use them in new ways. These reuse projects are being used as tools to create streams of revenues and modernizing campuses in a cost-efficient manner.
Turning Underused Buildings into Revenue Generators and Recruitment Tools
Many campuses have underutilized or empty buildings due to shifting enrollment trends. By reimagining existing structures, some schools have created new business opportunities. One example comes from the University of Maine, which transformed an unused residence hall and library into an on‑campus hotel in a public-private partnership.[2] This project is now a source of revenue for the University that draws campus visitors and prospective families, providing them with a bird’s eye view of campus, and repurposing a vacant but well-located building.
But the benefits of adaptive reuse extend well beyond being an additional way to generate revenue. In today’s competitive higher education landscape, campus aesthetics and amenities play a vital role in student recruitment. Research shows that students place significant value on the appearance of a campus and the accessibility of student services. One survey found that over 44% of high school students reported that they would choose a more expensive institution if it offered more modern facilities and student amenities.[3] In other words, adaptive reuse of aging facilities can help an institution compete for students and increase enrollments.
Truman State University, located in Kirksville, Missouri, embraced this approach by converting a previously vacant facility into a comprehensive Student Success Center.[4] This centralized hub brings together all of their student services, such as the Career Center and Counseling Services, under one roof. Through this reuse project, Truman State improved operational efficiency and created a more seamless student experience. These projects not only enhance daily campus life but can also improve retention, graduation rates, and employment rates, by ensuring that students have easy access to the resources they need.
While the two examples differ, each illustrates how adaptive reuse can provide an economical and innovative approach to increasing revenue and maintaining competitiveness. These are just a couple of recent examples of successful reuse, but the possibilities are endless. Institutions should think creatively of ways to improve the constituent experience (students, parents, faculty, staff, alumni) through reuse of existing assets that are not being used to their greatest potential.
Cost Efficiency and Financial Incentives
Restoring aging campus facilities is more affordable and takes less time than building an entirely new structure. This allows institutions to respond quickly to changing needs of their student population without waiting years for a new facility. This efficiency translates into reduced operational disruption and faster returns on investment.
Both federal and state governments often offer historic preservation tax credits designed to encourage the rehabilitation of older, architecturally significant buildings. When planned strategically, these credits can be applied to substantially offset the cost of major capital projects.
At the federal level, income‑producing properties that are on the National Register of Historic Places or that are eligible to be placed on the National Register of Historic Places may qualify for the 20% Federal Historic Rehabilitation Tax Credit.[5] When utilized by universities, the federal credit is often accessed through long‑term lease or partnership structures that allow tax‑exempt institutions to benefit indirectly while ensuring compliance with the law. In addition to federal incentives, some states have developed their own historic preservation tax credit programs to further promote reinvestment in significant structures. These state‑level credits often mirror the federal program but vary in scope, eligibility, and credit percentage.
Under legislation taking effect January 1, 2026, and running through January 1, 2035, Texas public colleges and universities may apply for a 25% tax credit for qualified rehabilitation expenses through the Texas Historic Preservation Tax Credit Program.[6] This carve‑out removes earlier barriers that prevented universities from participating, enabling institutions to leverage tax credits to finance campus modernization.
Together, these federal and state programs create an opportunity for institutions of higher education to reinvest in aging facilities, preserve historic architecture, and efficiently repurpose their campuses for modern use.
Drawbacks of Adaptive Reuse
Accessibility requirements can be a significant barrier to any adaptive reuse project. This is a significat issue within higher‑education campuses, where buildings must accommodate a diverse population of students, faculty, staff, and visitors. Many older academic buildings such as historic lecture halls, libraries, and residence halls were constructed long before modern ADA and universal design standards existed. Integrating accessible entries, elevators, ramps, or compliant restroom facilities into these structures can be extremely complex and cost prohibitive. In some cases, essential and necessary accessibility upgrades require altering character‑defining architectural features or cutting through load-bearing walls, which may not be feasible or permitted if the building has historical status.
Environmental considerations can also limit the viability of adaptive reuse on university campuses. Many older academic buildings contain hazardous materials such as asbestos, lead paint, or PCBs, which require extensive and costly abatement before renovations can even begin. While reuse often aligns with universities’ environmental goals, the remediation and retrofit work needed to make an older building safe and efficient can sometimes generate a larger environmental impact than constructing a new, high‑performance facility. In these cases, environmental factors can become a significant barrier to pursuing adaptive reuse.
Ultimately, while adaptive reuse presents an exciting opportunity to blend affordability, creativity, and sustainability, it is not universally the right solution. When structural upgrades, accessibility demands, or environmental issues push costs too high or limit how the building can function, new construction may be the more practical option. Understanding these limitations helps ensure that decisions balance creativity with long‑term value.
The Strategic Path Forward
In a time where institutions must be creative and forward‑looking, we are seeing more and more institutions consider real estate transactions and adaptive reuse as strategic options to achieve their financial goals. By transforming underused buildings into student‑focused spaces, institutions can create campuses that draw potential students in, all while being cost-efficient and preserving historic spaces. Our team can help you evaluate whether a strategic transaction or adaptive reuse is the right choice for your institution’s goals. We guide clients through high‑level feasibility assessments, risk identification, and strategic planning, drawing on our experience with projects involving historic buildings, complex zoning challenges, and environmental remediation. Please contact Gayle Mercier (gmercier@thompsoncoburn.com) or Abigail Smeltzer (asmeltzer@thompsoncoburn.com) for more information. We also invite institutions to visit our REGucation Higher Education Resources page, which includes links to our most recent webinars, training series, desk guides, whitepapers, litigation summaries, and blog posts.
[1] GW sold Virginia campus for $427 million to Amazon for data center development – The GW Hatchet
[2] $28M Hotel Ursa opens as adaptive reuse of historic buildings at UMaine
[3] Despite The Student Debt Crisis, High School Seniors Favor High-Cost, High-Amenity Colleges, New Survey Finds
[4] A Soul Reborn – The Truman Review
[5] Eligibility Requirements – Historic Preservation Tax Incentives (U.S. National Park Service)
[6] Texas Historic Preservation Tax Credit Program | Texas Historical Commission
