Harrison Street Real Estate Capital, the Chicago-based firm, has closed its latest opportunity fund on a total of $850 million of commitments, reaching its hard cap in the process.
Having held a first close of $420 million at the end of October, the company said its fifth opportunity fund, Harrison Street Real Estate Partners V (HSREP V) , exceeded the original target of $750 million.
In addition, the firm simultaneously raised a Fund V co-investment vehicle which garnered $160 million. This brings the total capital raised for the opportunistic strategy to over $1 billion which equates to over $3.5 billion in purchasing power for real estate in the education, healthcare and storage sectors.
From first to final close, the firm raised this amount in three months, it said. No placement agent was utilized.
As was the case with the previous opportunity Funds, HSREP V will invest in student housing, senior housing, medical office/healthcare properties and self-storage properties.
In a statement, Harrison Street said investor interest in its niche sectors had continued to rise given the lack of cyclicality inherent in “needs-based, demographically driven real estate” regardless of macro conditions. However, investors continued to find it difficult to access these sectors given the fragmentation of the market, it added.
Investors brought on board include public and corporate pension plans, insurance companies, endowments and foundations and significant family offices.
Harrison Street was formed in 2005 and has now raised more than $5 billion of discretionary equity capital. It has realized 198 investments totaling approximately $2.5 billion in volume including recent realizations from Harrison Street Real Estate Partners IV, which the company said were sold ahead of the contemplated business plans for the properties. Fund IV is the predecessor opportunity fund to Fund V and was closed in July 2013 at the hard cap of $750 million.
Christopher Merrill, co-founder, president and chief executive officer, said he believed the company had “the ability to produce the strongest risk adjusted returns for our limited partners”.