Harrison Street Real Estate Capital (“HSRE” or “Firm”), a real estate private equity firm exclusively focused on investments in the Education, Healthcare, and Storage sectors, announced that during 2014 it has completed the disposition of three large portfolio transactions: a student housing, self storage, and healthcare portfolio totaling over $730 million in realized value and comprised of 3,436 beds, 16,479 units, and 655,661 square feet, respectively.
The student housing transaction represents five student housing communities located at Indiana University, Indiana University Purdue University Indianapolis, Virginia Commonwealth University, University of Kentucky, and Kennesaw State University. The investments were made utilizing capital from Harrison Street’s closed-end Opportunity Fund series. As it relates to the investment at Indiana University, capital from Harrison Street Real Estate Partners IV, L.P. (“Fund IV”) a 2013 vintage fund was utilized. The balance of the capital came from Harrison Street Real Estate Partners III, L.P. (“Fund III”) a 2010 vintage fund. The Fund IV realization is significant given that it is the second realization of Fund IV to occur while the Fund is still within the investment period and well-ahead of the 5-year business plan contemplated for the asset.
HSRE developed the student housing portfolio on a single-asset basis in conjunction with Trinitas, an existing operating partner. According to Ben Mohns, Senior Vice President at HSRE, “this portfolio is representative of the types of student housing transactions that the Firm targets: growing public four year universities with measurable need for off-campus housing coupled with unrivaled access to campus and a top of the market amenity package.” To date, the Firm has invested in more than 50,800 student housing beds.
The storage transaction represents 26 properties geographically dispersed throughout the United States in demographically significant markets including California, Florida, Illinois, Nevada, New York, Ohio, and Rhode Island. This transaction, utilizing capital from both Harrison Street Real Estate Partners I, L.P. (“Fund I”) a 2006 vintage fund and Harrison Street Real Estate Partners II, L.P. (“Fund II”) a 2008 vintage fund, is characterized by acquisition, development, and re-positioning opportunities and was aggregated across multiple operating partners. Within the past year, HSRE has been active on the self storage disposition front including the 2013 sale of a 43-self storage property sale, currently among the largest self storage portfolio sales to take place in recent years. To date, the Firm has invested in more than 82,000 self storage units.
“This transaction further underscores HSRE’s thesis of creating and capturing value by aggregating a diversified, high-quality self storage portfolio via strategic opportunities. Our outlook for the self storage sector remains extremely bullish, and while we have been net sellers in recent months, we look forward to growing our portfolio.” stated Elliot Pessis, Vice President at HSRE.
The healthcare transaction represents twelve assets comprised of seven medical office buildings, three inpatient rehabilitation hospitals, and two short-term acute care hospitals across Florida, Texas, Nevada, Oklahoma, South Carolina, and Indiana. HSRE compiled the portfolio through single asset acquisition and development opportunities with four operating partners. The capital source was Fund III. Consistent with HSRE’s healthcare strategy, the portfolio tenant base was in many cases affiliated with leading national and regional non-profit and for-profit health systems. To date, the Firm has invested in more than 4.8 million square feet of healthcare space.
“Having now sold assets to multiple buyers, it has not only highlighted the interest level in our segments but more importantly demonstrates how difficult it is for the larger traditional players to access these specialty markets,” commented Christopher Merrill, Co-founder, President & CEO of HSRE.
In total the Firm has invested in $9.0 billion of gross real estate and has experienced realizations of $2.5 billion, which the Firm believes makes it the largest investor and subsequent seller of real estate within the Education, Healthcare, and Storage sectors.