Harrison Street Closes $2 Billion Fund, Senior Housing Among Investment Targets

Harrison Street closed its eighth opportunistic fund at $2 billion and intends to dedicate about half the fund to senior housing and other health care assets.

That’s according to PERE, which on Monday reported on the closing of the fund, Harrison Street Real Estate Partners VIII (HSREP VIII).

Chicago-based Harrison Street has a long history of senior housing investment, has partnered with several well-established operators, and has been active in 2021. 

Among its recent transactions in senior housing, the firm:

— ‘Handpicked’ 12 former Atria Senior Living communities to acquire from Healthpeak (NYSE: PEAK)

— Acquired a 24-property Oakmont Senior Living portfolio for $1.2 billion

— Forged a joint venture with Anthology Senior Living to develop three communities, in Florida and Massachusetts

The needs-based nature of senior housing and other assets targeted by Harrison Street helped them perform well in the pandemic, just as they were resilient in the financial crisis, Co-Founder, Chairman and CEO Christopher Merrill told PERE.

For HSREP VIII, the firm exceeded its $1.5 billion target and hit its hard cap. Harrison Street also raised more than $500 million for related co-investment vehicles, meaning that it has about $8 billion in buying power when considering debt, PERE noted.

In addition to senior housing, the fund will be deployed on medical offices, lab space, student housing, self-storage facilities and two new types of assets for Harrison Street: single-family rentals and data centers.

Already, more than half of the new fund has been committed to 76 properties either acquired or under contract, Merrill told PERE.

Harrison Street is one of several private equity firms that has a significant amount of capital ready to deploy in senior housing, with other players including Kayne Anderson, AEW Capital Management and PGIM. 

Transaction activity could ramp up in Q4 2021 as greater stability returns to the senior housing sector following Covid-related disruptions.

“There is a lot of money swishing around out there looking to invest in strong operators, looking to invest in even single-property operators that are trying to grow,” Beth Mace, chief economist at the National Investment Center for Seniors Housing & Care (NIC), recently told SHN.