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 1,223 properties that comprise more than $44bn 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 at 184 universities, in affiliation with 30 top health-care 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 offices in San Francisco, London and Toronto, the firm has more than 195 employees and approximately $36bn 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.

Sector forecasts

OTHER: Student housing – We believe that 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, we expect that the amount of education people need will rise, and there are limited viable alternatives to attaining a college degree. Enrolment growth at four-year schools continues to increase despite softness in other higher education segments. The cost differential between attending a public in-state 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 on-campus, thus providing continued growth opportunities for the purpose- built student housing market. Historically, the inverse relationship between job growth and enrolment growth, particularly across recessions, supports the defensive and needs-based nature of student housing.

Senior housing – This sector uniquely benefits from positive underlying demographic trends and needs-based demands. There is evidence that seniors increasingly prefer senior housing where they can age in place and remain in a community that addresses their changing health needs. Fundamentals are benefiting from an ageing population that is at the very beginning stages of accessing needs-based communities and will continue to see 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 of needing 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.

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. We believe that the impending growth of the worldwide aged 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.

Self storage – This 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 have historically benefited from steady NOI and consistently low cap-ex, which is among the lowest of all commercial sectors. The low-cap-ex profile of the sec- tor helped the sector recover more quickly compared to the traditional asset classes after the most recent recession.

Digital – Explosive growth in demand underpins the investment interest into the sector. The growth is driven by rapid expansion in cloud computing and an emerging capacity arms race among the major hyperscale cloud providers. Related to the impending growth of cloud computing is the massive proliferation in data which has been growing exponentially and could arguably be accelerating. Approximately 90% of the world’s data has been created in the last two years and that relationship has been holding for the last half decade. This phenomenon overlaps many underlying demand drivers such as distributed computing, content distribution, social media, artificial intelligence, internet of things, wearable devices and others.

Social infrastructure – Our social infrastructure strategy was developed to service universities, health systems and government users as they look for a single source of capital to address significant deferred maintenance on campus and begin to tackle the growing priority of improving their carbon footprint and self-sustaining resources. Investments include social assets such as residence halls, academic buildings and innovation districts as well as utilities investments including renewable energy such as wind and solar. These are supported by long-term contractual arrangements. We focus on highly structured assets within these segments, supported by long-term contractual arrangements, which we believe produce consistent financial performance across economic cycles.

COVID -19 impact – The global pandemic marked the second significant black swan event since the firm’s inception. It was another test of our investment thesis and another display of resiliency for the alternative real asset sectors in which we focus. Throughout the pandemic, we saw that the potential disruptors to these sectors, including online learning, telemedicine or in-home senior care, do not replace the experience of seeing a physician in person, learning on a college campus or living in a senior housing community with safe, reliable and quality care.

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 $44bn of gross investment cost across 1,223 transactions in its target sectors. Additionally, the firm has realised on more than 488 assets totalling $10.3bn 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 the US 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

Performance return cashflows for Harrison Street’s funds have been verified by the accounting firm Ernst & Young through 31 December 2020. Returns are calculated in accordance with INREV guidelines. The calculated performance is thoroughly checked in-house by Harrison Street as part of a multi-stage process.

COMPLIANCE STATEMENT

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 invest- ment 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, 2021, unless otherwise stated, and Harrison Street undertakes no obligation to update any such information.