Harrison Street Real Estate Capital has raised approximately $420 million in a first close of its fifth opportunistic real estate vehicle, bringing in more than half of the fund’s $750 million equity target, PERE has learned.
The Chicago-based real estate investment firm has an $850 million hard cap for the fund, known as Harrison Street Real Estate Partners (HSREP) V. Should the Harrison Street hit that hard cap, HSREP V will become the firm’s largest closed ended vehicle yet.
Harrison Street will follow the same strategy it pursued for previous vehicles, focusing on off- and on-campus student housing, senior housing, medical offices and storage properties across the US.
Thus far, HSREP V has attracted commitments from new and existing investors including US pension funds such as the District of Columbia Retirement Board, which committed $20 million, and the Texas County & District Retirement System, which committed $40 million. Other investors include corporations, insurance companies, endowments and large family offices. Sources say fundraising for the vehicle is likely to wrap up by the end of the first quarter of 2015.
Harrison Street also plans to launch a co-investment vehicle alongside the fund in order to manage the diversification within HSREP V. The firm is targeting $100 million to $150 million for the co-investment strategy, according to a source familiar with the situation.
The company, which declined to comment on fundraising activities, took a very similar approach with its last fund, HSREP IV, raising a $100 million co-investment vehicle alongside the fund in order to focus on development projects. Harrison Street closed HSREP IV in July after spending just a little more than six months on the fundraising trail. The fund brought in a total of $750 million in commitments, exceeding its original equity target of $600 million as well as its original hard cap of $700 million, which was extended by $50 million.