Harrison Street Closes Fund With $4B in Buying Power

Osborn Triangle in Cambridge, Mass., recently acquired by Harrison Street. Image courtesy of Harrison Street

Harrison Street has completed the final close of Harrison Street Real Estate Partners VII LP, surpassing its original goal of $950 million to reach its hard cap of $1.3 billion. And with an additional $302.5 raised in co-investment vehicles, Fund VII closes with a total of $1.6 billion in capital commitments, which translates to roughly $4 billion in buying power. 

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The fund is the seventh of Harrison Street’s closed-end opportunistic funds, which launched in 2006 with a focus on the education, health-care and storage sectors. The fund series has since built a strong following, as evidenced by its over-subscriptions—Fund VI exceeded its $850 million target by $100 million and closed with a total capital raise of $1.1 billion—as well as the composition of investors. 

Existing investors accounted for approximately 65 percent of the total capital contributed to Fund VII, which attracted more than 60 global institutional investors. The long list of participants in the capital raise includes Texas County & District Retirement System, which contributed $50 million to Fund VII in 2018 after having contributed the same amount to Fund VI in 2016.

Putting the capital to work

Harrison Street expects that more than 50 percent of the investment vehicle’s final portfolio will consist of senior housing, health-care delivery and life sciences assets. Harrison Street has not identified specific funds in recent transaction announcements.

However, the list of deals includes the acquisition of the 677,000-square-foot Osborn Triangle Portfolio, a complex of office and laboratory facilities in Cambridge, Mass. The firm, acting in a joint venture with Bulfinch Cos., purchased the asset from a subsidiary of the Massachusetts Institute of Technology for a whopping $1.1 billion. To date, approximately 26 percent of Fund VII’s capital has been committed.

Multi-tasking

In addition to its U.S. opportunistic fund series, Harrison Street is presently investing through its core real estate fund, social infrastructure fund and European opportunistic fund series. The firm is thriving, as noted during the second-quarter earnings conference call of Colliers International, which acquired a 75 percent interest in Harrison Street in 2018.

“Harrison Street, unlike most, remains very, very focused on alternate asset classes, which gives them a clear differentiator in the market and it’s attracting a lot of investment dollars,” Jay Hennick, CEO of Colliers International, said during the conference call on July 30.