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 acquired and developed over 1,068 properties that comprise more than $34.6bn in real estate cost 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 162 universities, in affiliation with 30 top healthcare systems and in partnership with 50+ best-in- class property operators. We continue to innovate with this robust network throughout North America and Europe.
Headquartered in Chicago with an office in London, the firm has more than 170 employees and approximately $27.3bn 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.
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.
Within Europe, Harrison Street has now established an exclusive network of operating partners and key relationships with top univer- sities across multiple countries. Harrison Street Europe continues to expand its regional capabilities with an extensive hiring program to extend and deepen its investment expertise in student housing, life sciences, healthcare and specialty residential. Harrison Street Europe plans to continue growing the opportunistic funds series, launch new strategies at the lower end of the risk spectrum as well as other real assets solutions.
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. The current macro conditions are driving up renters by design with home ownership decreasing as renting is a more affordable alternative. Household income growth has not matched house price inflation coupled with tighter personal mortgage markets, underpins this shift. 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.
OTHER: European student accommodation – The continued demand for tertiary education throughout Europe is demonstrated by positive enrolment growth 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. Furthermore, the current recessionary environment will likely see student numbers further increase as people return to university in order to re-skill. University enrolment growth and limited purpose-built student accommodation have created a structural supply and demand imbalance of student housing across Europe. Accordingly, investment and development activity have increased throughout primary European university cities; however, with provision rates as low as 4% in some cities, there is still a long way to go until these markets reach full maturity. Harrison Street believes that the demographic driven demand for tertiary education offers counter-cyclical performance with the ability to deliver secure income during varying economic cycles and 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 investment 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 capi- talise on this trend through investment in this emerging sector. The opportunities for senior housing investments include countries experiencing strong growth in their aging populations and have the following characteristics: affluent seniors, higher rates of income, market structures with higher require- ments of self-financing for senior care and compatible housing cultures.
Life sciences – This is a nascent but growing sub-sector which services the science and innovation sectors of biotech, pharmaceuticals and healthcare. There is structural undersupply of purpose-built modern research and lab space to accommodate the ever-growing investments from both the public and private sectors. Europe has some of the world’s best research institutions, a large pool of research professionals and abundance of VC funding creating the fundamentals for growth. At the property level, this growth is further supported by low vacancies, relatively low rental levels and attractive capital values per sq ft.
COVID-19 impact – We do not anticipate the COVID -19 crisis to have a long- term negative impact on the sectors in which we focus. We believe students’ desire to participate in the traditional college experience of learning and living on or near campuses will continue. Real estate demand to support the life sciences industry will likely strengthen as a result. BTR has proven to be flexible, adaptable, and resilient and long-term demographics are continuing to drive demand. We believe our senior housing communities will be recognised for their preparedness and the high degree of care provided to senior residents during the pandemic which will continue to separate our communities from others. For seniors with Alzheimer’s or dementia, finding the right community is time sensitive and will remain a priority for many families.
Investment principles & strategy
Harrison Street leverages its investment expertise and exclusive focus in alternative real assets to execute its strategy with confidence. As a first mover in demographic-driven, needs-based real assets, the firm has invested $34.6bn of gross investment cost across 1,068 transactions in its target sectors. Additionally, the firm has realised on more than 400 assets totalling $9.1bn 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 enrolment; 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 the US and Europe.
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 2010. 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.
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 assur- ance 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, 2020, unless otherwise stated, and Harrison Street undertakes no obligation to update any such information.