Public-private partnerships on the rise amid economic uncertainty

CHICAGO, July 16, 2025 – Public-private partnerships (P3s) continue to evolve as an increasingly important component in the toolkit of public institutions facing complex infrastructure challenges. JLL’s latest research, Redefining Public Delivery One P3 at a Time, examines facility-related P3 projects completed since 2019, providing insights into geographic trends, facility types, capital market considerations, construction costs and funding strategies.

“Public institutions today face a dual challenge: increasing infrastructure needs alongside constrained budgets,” said Matt Do, Managing Director, Government and Education, JLL Work Dynamics. “This requires thoughtful consideration of all available delivery methods, with P3s representing one approach that can align public goals with private sector capabilities when circumstances warrant.”

Between 2022 and 2024 there has been a notable acceleration in P3 implementation, with 41 social infrastructure P3 projects closing—more than double the 17 contracts signed during the previous three-year period. This growth in transaction volume reflects how more public entities are viewing P3s as strategic financial management tools that provide predictable costs, potential revenue streams and protection against market volatility during times of economic uncertainty.

The intersection of fiscal pressures and housing scarcity has led public institutions to embrace P3s as flexible delivery structures that address critical housing needs while preserving strategic control over long-term planning. These partnerships have evolved to feature increasingly sophisticated risk-sharing arrangements requiring creative financial engineering to remain viable in today’s complex market. Higher education institutions stand as particularly active adopters, accounting for over 50% of P3 projects since 2019, with new construction dominating 80% of implementations rather than renovations.

“When structured properly, P3s can distribute risk effectively across public and private partners,” noted Nina Farell, Executive Director, National Advisory Practice Lead, Government and Education, JLL Work Dynamics. “Having options for how to deliver critical infrastructure allows institutions to maintain focus on their core mission and the people these facilities ultimately serve, while accessing specialized expertise for design, construction and operations.”

Purdue University’s housing initiative for their Fort Wayne campus exemplifies strategic P3 implementation in practice. Facing enrollment growth that strained capacity, the university engaged JLL to guide the process from planning and demand assessment through financial close. The $82.3 million project delivers 602 new apartment-style beds through a tax-exempt 501c3 model, increasing affordable housing access while supporting the campus's transition from commuter to residential. The structuring of a 49% master lease helped achieve both financial sustainability and mission advancement—demonstrating how expert guidance can effectively address institutional objectives while meeting student needs.

JLL’s research suggests a potential correlation between facility modernization and institutional competitiveness. The 26 public four-year institutions that completed P3 projects between 2019 and 2024 experienced an average 7% enrollment growth—contrasting with a national average decline of 1.3% across similar institutions during the same period.

“When students choose a college, the physical campus makes a strong impression. Universities can not only increase their competitive edge, but also drive business resiliency by utilizing P3s to diversify programs and revenue streams and building stronger industry connections,” added Do.

Since 2022, the spectrum of P3 project types has broadened significantly, with the diversification of asset classes helping institutions address deferred maintenance backlogs and fund strategic priorities outside regular budget cycles, while maintaining institutional control. Beyond student housing deals, P3s now encompass energy-related infrastructure initiatives, higher education-anchored research and development facilities, workforce housing and various public transportation upgrades.

Local government agencies and public transportation authorities represent the next most active sectors to use P3 delivery, with increasingly specialized uses including media, entertainment and healthcare beginning to explore the model. Out of the 13 completed P3s that were procured by local governments from 2019 – 2024, 10 were in markets that have experienced population growth since 2015. Notably, the three smallest markets that all have a population of less than 100,000 people – San Marcos, Pflugerville and Hyattsville – are adjacent to major metros and have all seen remarkable population growth exceeding 10% over the past 10 years.

JLL forecasts continued growth in P3 implementation, particularly in core public infrastructure, energy resilience and affordable housing. P3s work most effectively when aligned with broader institutional planning that considers the full spectrum of public infrastructure delivery options. When implemented appropriately, these partnerships can help address specific challenges within public institutions' comprehensive facility strategies.

JLL is the premier provider of strategic real estate advisory for local, state, national and federal governments as well as public and education institutions. Its national team is helping governments transform their real estate and office portfolios for the future of work and has experts that cover the entire real estate lifecycle from strategy, public-private partnerships, facilities management and sustainability services to transaction and project management. JLL brings both the experience and expertise to convert real estate portfolios into working assets that meet operational and occupancy requirements while generating revenues and reducing costs. Visit jll.com/en-us/industries/government.

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