Harbert Management-Sponsored Fund Raises $521M

Image by Gerd Altmann via Pixabay.com

Two years after its launch, Harbert United States Real Estate Fund VII LP has closed having raised a total of approximately $521 million, including co-investment capital and a final $96 million of new equity commitments.

Harbert Management Corp., sponsor of the fund series, saw participation of institutional investors from across the U.S. and Europe.

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HUSREF VII targets industrial, multifamily, office and retail assets in non-gateway, primary markets marked by strong job growth and diversified economies. The fund attracted the attention of new investors as well as those who had contributed to previous HUSREF funds, including the University of West Florida Foundation and the Teachers’ Retirement System of Louisiana.

To date, HUSREF VII has invested or committed $315 million in 12 assets. The fund’s list of transactions incudes the $76.6 million purchase of a 482,700-square-foot industrial facility in Denver and the approximately $132.8 million acquisition of the Gateway Portfolio, an 831-unit multifamily portfolio in Dallas. HUSREF VII’s team maintains a robust pipeline of investment opportunities.

Opportunity abounds

The COVID-19 pandemic has created uncertainty in the economy and thus, the commercial real estate market; however, this period of turbulence hardly mirrors that seen during the global financial crisis more than a decade ago.

“Despite the turmoil, there does not appear to be a broad distressed opportunity in real estate,” according to a report by investment advisory firm Fund Evaluation Group LLC.

“Unlike the GFC, there is significant capital available to be deployed, as illustrated by the amount of private fund capital and the record number of funds (900+) in the market. That creates some cushion for the market, but also drives competition for properties. Instead, FEG expects opportunistic managers to find select compelling investments consistent with their mandates.”

As noted by recent closings, options in today’s commercial real estate funds—new vehicles as well as fund series—run the gamut. In April, Al. Neyer closed its inaugural industrial real estate fund with $110 million in commitments, raised via 105 investors. Also in April, Ares U.S. Real Estate Opportunity Fund III LP, focused on selective distressed, repositioning and development opportunities, closed with $1.7 billion, exceeding its $1.5 billion target.