A nonprofit organization "is an organization that uses surplus revenues to achieve its goals rather than distributing them as profit or dividends". If they're using the money earned from charging exorbitant rent to expand the University, extend scholarships, fund research, or keep the buildings cleaner, they're acting within the charter. "Nonprofit" doesn't mean they can't make money, it just means they don't give the excess money back to investors.
It's really not that simple. There's a lot of money to be made in the upper levels of a university and nationwide administration has been growing relentlessly. They may not officially pay dividends to "shareholders" but they are nevertheless very politicized institutions with the same grab for power and money, just on a scale smaller than Goldman Sachs, the US gov't, etc.
