Academy of Art University Leased Dorms to Startup Hub
The university has repurposed surplus San Francisco dormitory space into live-work facilities for founders and researchers.
Updated on Oct. 14, 2026 in Remote Work
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Academy of Art University has leased three former student housing properties to The Residency, which now operates them as live-work startup and research hubs. The move is part of the university's effort to divest or repurpose a significant portion of its San Francisco real estate portfolio.
Why it matters
The shift reflects a broader effort by the university to downsize its property footprint after a 2016 legal settlement, highlighting how institutions are repurposing dormant assets. This trend offers local business operators a window into how large organizations are reallocating underutilized urban real estate.
The university has leased three properties to accommodate roughly 20 participants per site, with residents paying $2,000 monthly or trading equity for access. This follows earlier asset sales including a Fisherman's Wharf building for $18.3 million and a church property for $4.7 million.
The players
Academy of Art University
A private for-profit art school that has historically maintained a massive, scattered real estate portfolio across San Francisco.
The Residency
An organization that operates live-work hostel facilities and research labs for early-stage startup founders and academics.
The details
The Residency has converted former dormitory rooms into specialized video studios and robotics workspaces to support its three annual cohorts. Participants engage in three-month stints, utilizing these residential and production spaces to accelerate their startup and research projects.
Timeline
2016: San Francisco sued the Academy of Art University regarding housing regulations.
2025: The university announced its intent to sell nearly a dozen properties.
2026: The university sold three properties including a Fisherman's Wharf location.
October 14, 2026: A report was published regarding current university property leases.
Market Landscape
This leasing strategy follows the university's compliance efforts mandated by the 2016 housing lawsuit settlement, which required specific upgrades and permitting for 34 of its properties. It signals a departure from traditional institutional real estate ownership toward more flexible, high-utility use cases.
Operators should monitor the growing market for repurposed institutional space, which may provide more affordable alternatives to traditional commercial office leases. Watch for additional property sales in San Francisco as the university continues its $120 million portfolio reduction plan.
The takeaway
Large institutions are increasingly pivoting away from rigid real estate holdings to shed maintenance costs and satisfy prior regulatory obligations. Monitor the secondary market for former dorms and institutional buildings, which may offer flexible workspace infrastructure for early-stage teams.
Further reading
Explore more on how shifting labor patterns are changing office needs in our Remote Work section.
Source note: This article includes information reported by The Real Deal New York.
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