Investment management firm Harrison Street has announced the final close of its ninth US opportunistic real estate fund, Harrison Street Real Estate Partners IX, L.P. and its associated co-investment vehicles.
Harrison Street is currently one of the largest owners of purpose-built student accommodation (PBSA), a top five owner of US senior housing and a market leader across alternative real assets.
With over $7bn in buying power, the fund will leverage Harrison Street’s extensive experience as a pioneer in alternative real estate to construct a diversified portfolio of best ideas.
The fund received strong support from existing fund series investors, who accounted for approximately 60% of total commitments.
It also attracted new institutional investors globally that include a diverse set of public and corporate pension plans, Taft-Hartley plans, sovereign wealth funds, foundations and endowments, and insurance companies.
“The successful closing of Fund IX, especially during a period of capital market disruption, is a testament to the resilience of our asset classes and the continued confidence our global investor base places in our innovative investment approach.
“For nearly two decades, Harrison Street has been a first mover across alternative sectors.
“Having successfully navigated numerous market cycles, we recognise that periods of uncertainty and macroeconomic volatility often present the most compelling investment opportunities.
“With Fund IX, we have carefully constructed a portfolio that we believe not only seizes on these unique market conditions but will emerge as a strong vintage.”
Christopher Merrill, Co-Founder, Chairman, and Chief Executive Officer, Harrison Street
Fund IX is a continuation of Harrison Street’s US opportunistic fund series, which is strategically positioned to capitalise on opportunities in fundamentally sound alternative real estate sectors that possess resilient and growing demographic-driven demand despite macroeconomic headwinds.
Further bolstering the investment landscape is the historically low levels of new supply across targeted sectors, where rising demand supports the need for additional inventory.
To address this supply and demand imbalance, the fund’s initial investments were intentionally directed towards development projects with Harrison Street’s long-standing partners.
Notably, the fund’s first development – a student housing scheme at the University of Wisconsin – was recently delivered 100% pre-leased.
Fund IX also completed its first disposition, receiving multiple unsolicited offers to purchase a data centre site after successfully securing power capacity including installation of an onsite substation.
“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. 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.
“As a leader in alternatives, we are distinctly positioned to create scale across these sectors and manufacture portfolios that showcase core characteristics at a time when we believe operating fundamentals are the strongest that we have seen in decades.”
Rob Cook, Senior Managing Director and Portfolio Manager for Fund IX, Harrison Street
To date, Fund IX has allocated close to 70% of its total equity across 70 assets spanning seven alternative sectors, with its largest concentrations in student housing, senior housing and data centers.
The remaining capital is expected to focus primarily on acquiring well-located but underperforming assets, alongside those with strained capital structures in need of liquidity, offering distressed pricing.
Since its inception in 2006, Harrison Street has raised an aggregate of $30bn in equity, ultimately investing over $ 68bn across 1,657 assets, with 675 fully realised asset sales.
Investments have included 220,000 student housing beds, 42,000 senior housing units, 24.5m sq ft of healthcare space, 2.0m kilowatts of data centers, 200,000 storage units, and 12,000 units of single-family housing.
In September KS4, Harrison Street and CA Ventures topped out at the Lisbon Street PBSA scheme. The development will comprise 548 PBSA units alongside a gym, roof terrace, courtyard and communal study areas.
