Self-Storage Investment Firm Harrison Street Closes $850M Fund

Investment-management firm Harrison Street Real Estate Capital LLC (HSRE), which has extensive interests in “needs-based” real estate, including self-storage, has closed its latest fund, Harrison Street Real Estate Partners V LP (Fund V), after raising $850 million, according to the source. The company raised the money in three months and beat its goal of $750 million.

HSRE also raised $160 million in a co-investment vehicle that increases the fund’s capital to more than $1 billion. The capitalization gives the firm more than $3.5 billion in purchasing power, the source reported.

Fund V will invest in medical office and healthcare properties, self-storage assets, and senior and student housing, primarily on a single-asset acquisition or development basis, according to a report by “Institutional Real Estate Newsline.”

The company has raised more than $5 billion since its founding in 2005 and invested in more than 430 properties in 40 states, according to the source. In 2013, HSRE and self-storage operator Morningstar Properties LLC sold 43 storage properties to real estate investment trust (REIT) Public Storage Inc. for $315 million. Last November, it sold 26 storage facilities to REIT CubeSmart for $223 million. Both transactions are among the largest in self-storage industry history.

Outside of the self-storage sector, HSRE sold a 12-asset, multi-state, health-care portfolio last year for $283 million. It also acquired a senior-housing portfolio with properties in Maryland, Massachusetts, Pennsylvania, Rhode Island and Virginia.

“We think that for the next 10 to 15 years, these are very good assets for investments,” Christopher Merrill, president and CEO of HSRE, told real estate website GlobeSt.com.

HSRE is a real estate private-equity firm with more than $7.5 billion in assets under management through commingled funds and public securities products. The commingled funds focus exclusively on the education, health-care and self-storage segments of the U.S. real estate market. Affiliate Harrison Street Securities LLC manages more than $800 million in REIT investments.