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 $17.9 billion of gross investments (664 assets) since inception and disposed of over 418 properties with a gross cost of $8.1 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 102,000 student housing beds, approximately 23,000 senior housing units, about 7.7 million square feet of medical office space, over 738,000 square feet of life sciences and nearly 112,000 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 III2010Fully liquidated$596 million
Fund IV2013Disposition 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 nearly $10 billion and consists of a diversified portfolio of 310 properties.

Europe Closed-End Fund Series

Harrison Street has invested €2.7 billion in approximately 14,000 student housing beds, over 2,000 specialty residential units and 1.6 million square feet of life sciences throughout Europe. The following provides a summary of the fund series:

FundVintage YearFund StatusFund Size
Fund I2015Disposition 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