Investing in non-traditional real estate with attractive, steady and defensible demand drivers

The cycle-resilient user demand for Harrison Street’s target real estate sectors are derived from demographic trends: an aging population that continues to grow and live longer; increasing college enrollments; and a more mobile population. Additionally, these highly-fragmented asset classes generally have short-term leases, which the firm believes can be beneficial in inflationary environments, allowing rents to re-price more frequently.

Long-tenured investor in alternative real estate sectors across the risk/return spectrum

US Closed-End Fund Series
Launched in 2006, the opportunistic fund series has completed $15.8 billion of gross investments (631 assets) since inception and disposed of over 392 properties with a gross cost of $7.6 billion. The fund series’ investment focus is to create a diversified portfolio of assets in demographic-driven real estate. The funds seek to create value through the acquisition, development, redevelopment and/or repositioning of assets in the target sectors in partnership with strong operating partners.

The fund series has invested in approximately 124,800 student-housing beds, approximately 21,400 senior housing units, about 6.9 million square feet of medical office space, and approximately 108,400 storage units. The following provides a summary of the fund series: 

FundVintage YearFund StatusFund Size
Fund I2006Fully liquidated$208 million
Fund II2008Fully liquidated$432 million
Fund III2010Full liquidation projected Q4 2019$596 million
Fund IV2013Value creation/begin disposition phase$750 million
Fund V2014Value creation phase$850 million
Fund VI2016Value creation phase$950 million
Fund VII2018Investment period$1.3 billion

US Core Open-End Fund
Launched in 2011, Harrison Street’s core open-end fund was created to provide investment in stabilized, cash-flow producing real estate with demographic-driven demand. The fund invests in student housing, both on and off campus, and other education-related real estate investments; senior housing including independent living, assisted living and memory care communities; medical office buildings and other healthcare-related real estate investments; life science buildings and storage properties.

Since its inception, the fund has consistently produced an attractive distribution yield. The fund is valued at over $8.6 billion and consists of a diversified portfolio of 288 properties.

Europe Closed-End Fund Series

Harrison Street has invested €2.1 billion in approximately 14,600 student housing beds and 800 specialty residential units throughout Europe. The following provides a summary of the fund series:

FundVintage YearFund StatusFund Size
Fund I2015Value creation phase€235 million
Fund II2018Investment period€500 million

Identifying investment opportunities at the early stage of a trend is what we do best. We pride ourselves on being pioneers in demographic-driven, needs-based real estate in the US and approach the expansion of our European business with the same first-mover mindset. We continually push ourselves to innovate and create differentiated investment solutions to help our clients achieve their goals.

Rob Mathias, HEAD OF INTERNATIONAL