Harrison Street and The Michaels Organization Launch $230 Million Student Housing PPP at University of San Diego

Harrison Street and The Michaels Organization have announced a $230 million public-private partnership with the University of San Diego to develop Presidio Terrace Apartments, a planned 321-unit, 700-bed on-campus student housing facility. The agreement, announced September 15, 2026, marks the first transaction completed through Harrison Street's dedicated PPP investment strategy and USD's first-ever public-private partnership.

Deal Structure and Capital Stack

The project is structured through a 99-year ground lease with USD and qualifies for a full real estate tax exemption as a university-affiliated facility. Harrison Street is providing equity for the development, with KeyBank supplying construction financing. The Michaels Organization will serve as both developer and long-term operator of the property.

The development is located at 5702 Linda Vista Road on approximately 3.5 acres of USD's west campus, positioned between the university's academic center and a nearby retail corridor. The project replaces a 42-unit Presidio Terrace complex built circa 1970 that was taken offline in January 2026 to make way for construction.

At $230 million across 321 units and roughly 350,000 square feet, the project implies a cost of approximately $716,500 per apartment and $657 per square foot. Construction is underway, with completion targeted for July 2029 and student move-ins planned for August 2029 ahead of the Fall 2029 semester.

Property Details and Planned Amenities

Presidio Terrace Apartments will comprise nine interconnected mid-rise buildings on the west campus site. The unit mix will range from studios to four-bedroom apartments, all with full kitchens. The development is designed to serve upperclassmen, graduate, and professional students, with convenient access to USD's business, nursing, engineering, and law schools.

Planned amenities include an indoor/outdoor fitness center, lounge and study spaces, a juice bar and grab-and-go food options, rooftop decks with Mission Bay views, an outdoor media wall, underground parking, and a pedestrian bridge connecting the complex to the core campus.

USD has reported a 13.2% increase in total enrollment since 2020, alongside significant growth in applications, providing the demand backdrop for the expanded on-campus housing capacity.

Harrison Street's PPP Platform

With the Presidio Terrace transaction, Harrison Street has surpassed $6 billion in PPP assets under management. The firm has now completed 64 PPP transactions across the higher education, healthcare, and government sectors, and holds partnerships with more than 20 universities, including Northwestern University, Duquesne University, Duke University, Arizona State University, the University of Kentucky, and Missouri State University. More than 40% of Harrison Street's higher education PPP pipeline consists of opportunities with existing university partners considering a second or third PPP with the firm.

"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. "We are pleased to partner with the University of San Diego and Michaels to deliver high-quality housing tailored to the specific needs of the University's students. 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."

Christopher Merrill, Co-Founder & Global CEO of Harrison Street, noted the firm's longer-term trajectory in the space. "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," Merrill said. "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."

Broader Student Housing Context

The Presidio Terrace development addresses a persistent shortfall in institutional-quality housing for graduate and professional students, a segment that has historically received less attention from both campus planners and private developers than undergraduate populations. The PPP structure allows USD to address that gap without diverting capital from its academic operations, a model Harrison Street has replicated across its broader university portfolio.

Harrison Street manages $110 billion in assets under management across real estate, infrastructure, and credit strategies. 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. The Michaels Organization has an established prior relationship with Harrison Street across multiple transactions.

Sources

Harrison Street Asset Management — Official Announcement, September 15, 2026