Real estate investment firm Harrison Street has raised $1.6 billion in equity for its latest fund, which will heavily target senior housing investments.
Chicago-based Harrison Street hit the fund’s hard cap of $1.3 billion — exceeding the initial target of $950 million — and raised an additional $302.5 million in co-investment vehicles, the firm announced Monday. With expected leverage, Harrison Street anticipates that the fund’s total buying capacity will be approximately $4 billion.
About 30% to 40% of the fund likely will be invested in senior housing, Harrison Street Co-Founder, Chairman and CEO Christopher Merrill told Senior Housing News.
Along with senior housing, health care properties and life science should ultimately account for more than half of the portfolio, with the student housing and storage sectors also targeted, according to Harrison Street’s announcement of the fund on Monday. To date, the fund has committed 26% of its equity capital.
This the seventh opportunistic U.S. real estate fund that Harrison Street has raised.
“The fund series is focused on creating value at the asset level,” Merrill told SHN. “This includes development, renovation and repositioning of properties.”
Harrison Street is no stranger to senior housing. Founded in 2005, the firm has invested in senior housing properties totaling more than 26,000 units, and counts operators such as Houston-based Belmont Village among its partners in the space.
In 2018, global commercial real estate services firm Colliers International (Nasdaq: CIGI) acquired a 75% stake in Harrison Street for about $450 million.
Colliers invested about $20 million in the new fund, Bloomberg reported. Other institutional investors included the Teacher Retirement System of Texas and the Texas County & District Retirement System.
In total, 65% of the fund’s total committed capital came from existing investors.
Senior housing and other health care asset classes have held up through various economic cycles and should fare well as the population ages in the coming years, Merrill emphasized.
“Fund VII will be diversified across demographic-driven, needs-based real estate,” he told SHN.