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.

Sector forecasts

OTHER: Student housing – The importance of earning a college degree in the US will continue to drive enrolment in the higher education sector. As the economy continues to reward workers with higher skills, the amount of education people need will rise, and there remains no viable alternative to attaining a college degree. Enrollment growth at four-year schools continues to increase despite softness in other higher education segments. The cost differential between attending a public instate school versus attending a private school often drives students to select the public university. Public universities facing reduced levels of state support can on average only house 30% of students oncampus, thus providing continued growth opportunities for the purpose-built student housing market. The inverse relationship between job growth and enrolment growth, particularly across recessions, supports the defensive and needs-based nature of student housing.

Senior housing – The senior housing sector uniquely benefits from positive underlying demographic trends and needs-based demand. There is evidence that seniors are increasingly preferring senior housing, since senior housing demand has grown quicker than the relevant population since 2010. Seniors want to age in place and remain in a community that can address the senior’s changing health needs. Fundamentals are benefiting from an aging population that is at the very beginning stages of accessing needs-based communities. This demographic segment will continue to drive significant demand over the coming decade and beyond. Increasing penetration rates suggest an often wealthier and better-informed senior resident has begun to anticipate and plan for the eventuality since 69% of those over 65 will need specialised care at some point in their lives.

Healthcare delivery/medical office – The healthcare delivery sector is evolving and expanding as the healthcare landscape shifts from traditional doctor’s offices and hospitals to include a variety of other settings. The range of healthcare tenants now encompasses imaging facilities, diagnostic centres, cancer care, disease treatment, inpatient rehabilitation, emergency care, and outpatient surgery. Medical office buildings benefit from a stable tenant base, needs-based demand drivers, positive demographics, and a long-term rental model. Additionally, secular and structural trends, like longer life expectancy, healthcare system consolidation, falling uninsured rates, positive demographics, and the popularity of outpatient procedures are all contributing to continued growth in this sector.

Self storage – The self storage sector has evolved into an institutional real estate asset class due to attractive operating characteristics, the opportunity to achieve economies of scale for larger operators, and demand backed by recurring needs. The underlying demand for self storage is created by recurring events supported by population transitions, household mobility, renewed commercial activity and a shift away from home ownership. Self storage facilities benefit from steady NOI and consistently low cap-ex, which is the lowest among all commercial sectors. The low cap-ex profile of the sector helped the sector recover more quickly compared to the traditional asset classes after the most recent recession.

Life sciences – The life sciences real estate sector is a segment created by the ongoing demand for specialised buildings for the life sciences industry including office, laboratory, research and computing needs. The life sciences sector has evolved rapidly as the demand for specialised life sciences facilities has grown. The life sciences sector benefits from positive underlying and aging US and worldwide population demographics and the recurring demand for the latest drug therapies, procedures and discoveries emerging from life sciences industry participants. The impending growth of the worldwide aging population combined with enhanced life expectancies, the growth of chronic diseases and greater affluence will continue to create demand for new discoveries across the spectrum of life sciences companies.

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 verification

HS measures its US property and investment level performance according to US client mandate/directed benchmarks; which are typically in line with the US FMV GAAP guidelines. The calculated performance is verified in-house by multiple Harrison Street employees as part of a multi-stage process.

The information contained herein is for the sole purpose of providing general information to institutional investors about Harrison Street and its affiliates. Certain subsidiaries are registered with appropriate regulatory authorities. No representation is made concerning the accuracy of the information compiles herein, and no guarantee or assurance is given that any forecast or opinion in these materials will be realized. The information contained herein is not investment advice and may not be construed as the promotion or marketing of any services or financial product sponsored or provided by Harrison Street and its affiliates. All information herein is as of June 30, 2019, unless otherwise stated, and Harrison Street undertakes no obligation to update any such information.