Harrison Street is a leading investment management firm exclusively focused on alternative real assets. Since inception in 2005, the firm has created a series of differentiated investment solutions focused on demographic-driven, needs-based assets. The firm has invested $28bn across senior housing, student housing, healthcare delivery, life sciences and storage real estate as well as social and utility infrastructure. Our experience spans investments on or near 150 universities, in affiliation with 30 top healthcare systems and in partnership with 50 best-in-class property operators. We continue to innovate with this unrivalled network throughout North America and Europe. Headquartered in Chicago with an office in London, the firm has more than 140 employees and approximately $21.5bn in assets under management. Our dedicated and passionate team excels in finding innovative ways to generate long-term value as fiduciaries for our investors.
The team consists of subject matter experts in alternative real asset investing and has one of the longest track records in non-traditional real estate. Clients of the firm include a global institutional investor base from North America, Europe and Asia.
RESIDENTIAL: European build-to-rent – Across many European cities, there are insufficient levels of residential real estate to meet rising levels of demand. Although BTR is still a nascent sector in the UK, its underlying fundamentals and acceptance as a viable housing solution have created an attractive investment opportunity. Demand for BTR in the UK is driven by structural housing undersupply and a secular shift towards rentals. Unlike traditional buy-to-let apartments, BTR units are professionally managed and often held in long-term portfolios, giving tenants higher quality than what would otherwise be available from individual landlords. Tenants are receptive to this new rental experience, as BTR units command rent premiums of about 10% relative to the rest of the market. Because of this dynamic, the BTR market is expanding quickly, with recent completions in major cities across the UK, not just in London. The pipeline is growing every year as well, to the point where there are nearly 110,000 units under construction across the UK. Despite the growth, there is still room to run: the pipeline represents roughly 10% of all housing units delivered in a given year, and well below the share of units delivered in a developed multifamily market. Together, these conditions create attractive conditions for investment as the BTR sector continues to gain acceptance across the country.
OTHER: European student accommodation – The continued demand for tertiary education throughout Europe is demonstrated by positive enrolment growth, increases in international student participation, and a continued rise of young adults that have completed tertiary education. The opportunity to pursue a degree with varying levels of affordability and the advantages of greater earning potential upon completion continue to sustain the persistent demand for higher education. University enrolment growth and limited student accommodations have created a structural supply and demand imbalance of student housing across Europe. Accordingly, investment and development activity have increased throughout primary university cities, bringing the purpose-built student accommodation market to maturity in some regions, such as the UK, while other regions remain in their infancy. The demographic driven demand for tertiary education offers counter-cyclical performance with the ability to deliver secure income during varying economic cycles. Harrison Street believes that the underlying demand fundamentals in many European university markets create appealing investment opportunities.
European senior housing – The European senior housing sector offers a strong real estate investing opportunity that matches institutional investors’ requirements for long-term, income secure assets that are driven by underlying structural trends rather than market cyclicality. Demographic trends across Europe highlight the opportunity to invest in European senior housing to meet the needs of a rapidly aging population, as evidenced by the growth of the absolute number of seniors and as a proportion of the total population. Accelerating demand requires an expansion of supply. Pressure on public finances and the capital requirements of existing operators seeking to expand in a consolidating market create an opportunity for investors to capitalise on this trend through investment in this emerging sector. Countries experiencing strong growth in their aging populations, with affluent seniors and higher rates of income and more affluent seniors, that have market structures requiring higher requirements of self-financing for senior care and which have compatible housing cultures present some of the strongest opportunities for senior housing investment.
Investment principles & strategy
Harrison Street’s investment expertise and exclusive focus in alternative real assets provides clients with the confidence of execution. As a first-mover in demographic-driven, needs-based real assets, the firm has invested $28.1bn of gross investment across 957 transactions in its target sectors. Additionally, the firm has realised on more than 400 assets totalling $8bn in total cost. It is with this deep experience that we execute a rigorous and time-tested investment process. We bring together all disciplines of the firm to collaboratively manage assets throughout the investment life cycle from strategy conception to disposition.
The demand for Harrison Street’s target sectors is driven by consumer needs and demographics. The cycle-resilient user demand is derived from demographic trends: an aging population that continues to grow and live longer; increasing college enrolments; and a more mobile population. Further, there are varying degrees of need for services offered at the properties including important life events, such as the one-time need to obtain a college degree contributing to student housing occupancy; recurring events, such as the need to visit a physician’s office regularly; or absolute needs, such as the need to live in an assisted living or memory care senior housing community.
The firm executes strategies in both core and non-core investments in North America and Europe.
Strategic corporate development
Since 2005, the Harrison Street team has spent significant time developing and nurturing relationships with top universities, health systems and operating partners across North America and Europe. It is through this network that the firm will continue to innovate within demographic-driven, needs-based real assets and strategically expand into new investment strategies and markets that complement our existing activities and meet the needs of our clients.
Performance return cashflows for Harrison Street European Fund I and Harrison Street European Fund II have been verified by the accounting firm Ernst & Young through 31 December 2018. Returns are calculated in accordance with INREV guidelines. The calculated performance is thoroughly checked inhouse by Harrison Street as part of a multi-stage process.