Why universities are fighting for these 7 acres in southern Florida

In the booming South Florida city of Palm Beach, downtown real estate represents an asset of increasingly rising value. But one stretch of unused land—a seven-acre plot set to be the future home of a satellite campus of Vanderbilt University—might just be one of the most valuable of all.

The private university’s effort to build a graduate school at a nexus point on South Florida’s current property and business boom offers a lesson in the real estate value of education, and the branding opportunities available to higher ed. In this case, it’s to go where the customers—or coeds—are, and focus on in-demand industries. 

“Vanderbilt knows they’re a preeminent institution in the Southeast and have brand value to potential students in Florida,” says James Birkey, Senior Vice President with the Government and Education division at real estate brokerage JLL. “The calculus is that there are potential students—in this case, potential graduate students of finance and tech—who want access to a Vanderbilt-level education but who also aren’t making the move to Nashville. Vanderbilt knows that, done right, a new campus in Palm Beach gives them long-term access to a broad pool of students in a growing region of the country.” 

A new Vandy campus

Vanderbilt’s proposed $520 million graduate campus, a 300,000-square-foot satellite that would focus on business, artificial intelligence, and data science programs, could start teaching students as soon as the 2026 fall semester. Located near rail stations and downtown commercial districts, including the 35-acre mixed-use CityPlace development by Related Companies, the campus would boast an innovation hub and host 1,000 students.

Vanderbilt wasn’t the first school with this idea in mind. The site was initially proposed for a similar, but failed, expansion by the University of Florida, for a Global Technology and Innovation Campus that never came to fruition after a year-and-a-half of public meetings. 

Vanderbilt chancellor, Daniel Diermeier, said the school has been looking at an opportunity to create a second, sibling campus for years. And Vanderbilt would bring a lot to Palm Beach, argues Birkey, since at scale, universities’ economic contributions are incredibly significant to the geographies in which they reside. New schools don’t just provide construction gigs, staff roles, maintenance contracts, and student spending. They provide high-value workers for high-value jobs, which Birkey says drives regional real estate values. 

Wall Street South

There’s a reason billionaire developer Stephen Ross, who owns Related Cos, has spent significant money pitching Vanderbilt and trying to bring a high-name recognition school to the region, and hosted the Vanderbilt chancellor at his Palm Beach mansion. Dennis Grady, President and CEO of the Chamber of Commerce of The Palm Beaches, says it is all part of the area’s efforts to “change its branding.” 

“We’re kind of referred to as Wall Street South,” Grady says, in reference to the region’s self-applied nickname that nonetheless reflects real population growth, and the expansion of financial firms and professional services firms to the region. 

These kinds of expansions also bring a lot to the school, said Peter Stokes, Managing Director at Huron Consulting, which assists colleges and universities. It’s more than brand visibility. It’s about the bottom line. 

Expanding into a new, growing area means more students and income to offset other operational losses. There’s also new abilities to achieve greater financial efficiency and utilize academic assets better, such as teachers and deep talent and experience in certain fields. It’s comparable to the movement of industries and venture capital, which seek greater return, efficiency and lower costs, and new markets for experimentation and expansion. Diermeier was also clear he wanted to do something that the school “couldn’t do in Nashville,”

“Universities are pushing themselves into new markets, but there’s also a pull,” said Stokes. “There’s demand in those regions. If we’re just talking about Florida, for example, Northeastern University recently opened a location in Miami. If you just look at the healthcare sector, every major university with health capabilities is active in Florida in some way because of all of the demand.”

The rise of the satellite campus

For Vanderbilt, a large private institution presented with an opportunity to become a player in South Florida’s recent economic rise, a new campus may seem like a fait accompli. 

West Palm Beach officials already donated two acres for the plan, and the Palm Beach County commission will likely approve the donation of five more acres in October. It’s also a virtuous circle; finding a market where it wanted to expand means betting on growth in Palm Beach, which is bolstered by Vanderbilt’s presence.

Satellite campuses have become a big focus for top-tier schools with the endowments and cash to fund such expansions. Washington D.C., for instance, has seen a number of schools, including U.S.C., invest in new campuses in the nation’s capital, and other colleges have pushed into New York City, Los Angeles, and San Francisco. Others have aimed at fast-growing cities like Austin and Phoenix, and banked on schools for in-demand careers, such as nursing.

Demographics suggest the pool of students has plateaued and will become more limited. The nation’s degreed population greatly expanded in the last 70 years, going from two million college students in 1950 to about 21 million in 2010, only to shrink to 18 million today. Colleges see this as a warning to invest in educating students in the industries of the future, which guarantees relevance, enrollment, and a larger contingent of well-heeled donors.

There’s a long history of real estate-college collaborations being mutually beneficial. In the 1960s, the Irvine Company, an Orange County developer, donated land to build the University of California, Irvine, to help spur more real estate activity around vast tracts of land it owned near the proposed campus. Decades later, UC Irvine has become a top-tier research campus, and businesses pay high rents to operate near the school and its innovative students and staff. For many, Irvine Company is their landlord. 

For a model closer to Vanderbilt, the Northeastern University example is instructive. The well-established Boston-based school has, in the past decade, built campuses in numerous cities including London, Oakland, California, and Silicon Valley. Birkey says the expansion allows the school to court new coeds from around the country and globe, and offer existing students a broad array of other learning options. 

“Today, a lot of private institutions in particular argue that being bold is essential to staying relevant—and economically viable—in the coming decades,” said Birkey. “The landscape of higher education is just changing too rapidly to expect that the next hundred years will mirror the last hundred.”