Harrison Street Raises $2.5B; Targets Underperforming Assets
Through the fund, 70 percent of the capital has been committed to 70 properties.
Harrison Street plans to take advantage of what it sees as undervaluing assets after raising $2.5 billion.
The capital comes from the alternative real estate asset-focused firm’s final closure of its Harrison Street Real Estate Partners IX Fund. The company now has more than $7 billion in buying power and received roughly 60 percent in commitments from existing fund series investors. Also, Harrison garnered support from new global institutions, foundations, endowments, sovereign wealth funds, insurance companies, Taft-Hartley plans, as well as corporate and public pension plans.
The fund marks Harrison’s ninth installment of its US opportunistic series, which aims to capitalize on assets with macroeconomic headwinds but have “demographically-driven demand,” the company said in a statement. Already, Fund IX has allocated 70 percent of its capital towards 70 properties in seven asset classes. This includes data centers, student housing, and senior housing. Harrison anticipates the remaining equity in the fund will focus on purchasing “well-located but underperforming assets, as well as those with strained capital structures in need of liquidity, offering distressed pricing.”
“We are witnessing a persistent and noticeable investor rotation from traditional real estate into alternative sectors, a trend that has accelerated in its trajectory in recent years,” Rob Cook, senior managing director at Harrison and portfolio manager for Fund IX, said.
“With Fund IX, we continue to be focused on deploying strategic capital that leverages our experienced team, deep relationships, and consistent commitment to risk management to create high-quality and resilient portfolios across alternative real estate sectors that meet the growing investor demand.”
For the past year or so, high interest rates have served as an obstacle to CRE investment. But lately, we have seen investment firms raise money, as they wait patiently on the sidelines for the right opportunities. Some other big fundraisings recently have come from The Carlyle Group, which is targeting $8 billion with a $10 billion hard-cap, and multifamily firm Cortland, which raised $1.5 billion.
It’s unclear if Harrison will target any regions in particular, but Corland is exploring opportunities in the Sunbelt. Harrison said that its first development completion under Fund IX was for a student housing project at the University of Wisconsin.
Overall, Harrison has raised $30 billion, while pouring more than $68 billion through more than 1,600 assets since its founding in 2006.