Just more than 18 months after closing of its last commingled vehicle, Harrison Street Real Estate Capital has launched its fourth opportunistic real estate fund. Sources have confirmed that the Chicago-based real estate investment firm is seeking $600 million in equity commitments, with a hard cap of $700 million, for Harrison Street Real Estate Partners IV. The firm is seeking contributions from US and European pension funds, insurance companies, endowments, foundations and family offices.
Fund IV’s investment strategy is consistent with that of Harrison Street’s prior funds. Through the vehicle, the firm will invest in off-campus student housing, senior housing, medical office buildings and storage properties across the US. A first close is expected during the first quarter of 2013 and a final close is anticipated sometime near the year’s end. Representatives from Harrison Street declined to comment.
In June 2011, Harrison Street Real Estate Partners III received more than $595 million in commitments, exceeding its original $500 million target. At the time of Fund III’s closing, co-founder and chief executive officer Christopher Merrill said: “If you look at these asset classes, they typically outperform others,” suggesting the reason why Fund III wound up being oversubscribed.
Fund III currently is 75 percent invested and 90 percent committed, with those investments expected to close during the first quarter. Investments made on behalf of Fund III include six Alzheimer's care facilitates around Washington DC; senior housing communities in Oregon and Montana; a senior housing development outside of Houston; a boat storage facility across the Hudson River from Manhattan in Liberty State Park; medical office properties in Michigan and North Florida; and student housing properties at Oklahoma State University, the University of Michigan in Ann Arbor and the University of California at Riverside.
Prior to Fund III, Harrison Street raised $208 million for Fund I and $430 million for Fund II. Since its formation in August 2006, the firm has raised more than $1.2 billion in third-party equity.