Harrison Street Real Estate Capital has held a first close on its eighth opportunity fund, PERE has learned. It raised $720 million in roughly 60 days.
The capital closed thus far includes both fund-level commitments and co-investments, a person familiar with the fund said. Most of the capital raised has been for the fund, but it is unclear how much has been dedicated to each vehicle. Harrison Street declined to comment on the fundraise.
The Chicago-based alternatives specialist filed a disclosure with the Securities and Exchange Commission on November 17, stating that it intended to raise up to $2 billion for Harrison Street Real Estate Partners VIII. But the person familiar with the fund said the firm is targeting $1.5 billion and hopes to hold a final close sometime next year.
Roughly two-thirds of the capital raised thus far has come from institutions that had previously participated in the series, with the remainder coming from new investors.
Like the other funds in Harrison Street’s flagship series, HSREP VIII will target assets tied to the healthcare sector as well as senior living, PERE understands. In line with current trends, the vehicle will place a greater emphasis on life science laboratory space and add data centers into the mix.
Known for its investments in student and senior living as well as medical offices, Harrison Street entered the data center space in October by purchasing the AH Wells Building, a collocation and network dense data center in downtown Milwaukee. It partnered with fifteenfourtyseven Critical Systems Realty, a specialist developer and operator in the sector, to acquire the 165,000 square foot building.
While most other asset classes saw values fluctuate or fall during 2020, data center and life science platforms have continued to appreciate as the result of surging demand. Serving as essential infrastructure, both property types have operated throughout the pandemic and are expected to see greater demand in the years ahead.
Harrison Street capitalized on that heightened demand to sell a three-building life science research complex in Cambridge, Massachusetts from its HSREP VII fund for $720 million.