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Heitman Fund Targets $2B in Acquisitions

CHICAGO-Heitman LLC is closing its Heitman Value Partners II fund with $800 million of equity commitments.

By Gina Kenny | Updated on June 17, 2007

CHICAGO-Heitman LLC, headquartered here, has closed its Heitman Value Partners II fund with $800 million of equity commitments from 20 clients and $15 million of its own capital. Heitman expects to acquire more than $2.4 billion in real estate within three years, says Maury Tognarelli, president and CEO. Heitman partner Tom McCarthy will oversee the fund.

The focus of the fund will be value-add properties, Tognarelli tells GlobeSt.com. Heitman “is looking to achieve (leveraged) returns that are in the 12% to 14% range net of all costs,” he says. The fund will invest in a variety of property types including residential, office, industrial, retail and specialty sectors such as medical office, student housing and self-storage facilities. Heitman will focus on the US, Canada and Mexico for acquisitions.

Heitman plans to primarily use joint ventures to acquire the properties. “The strategy at the real estate level will be to identify operating partners, whether they are public or private, that focus on executing niche strategy within their locale,” Tognarelli says. Heitman “will marry our funds with their value creation strategies.”

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