Founded in 1966, Heitman is a global real estate investment management firm. We operate in North America, Europe, and Asia-Pacific, in public and private markets, executing debt and equity strategies across the return spectrum. Through extensive research, innovative investment products, a seasoned management team, and hard work from some of the most talented professionals in the industry, Heitman has the experience and the resources to capitalise on opportunities and achieve our clients’ investment objectives. Our three complementary business units are:
- Private Real Estate Equity: Investing in direct real estate in North America, Europe, and Asia-Pacific on behalf of our commingled funds and separate account clients
- Public Real Estate Securities: Investing in publicly traded real estate securities in North America, Europe, and Asia-Pacific via separate accounts, UCITS portfolios, and a mutual fund, acting as a sub-advisor, and additionally participating in UMA programmes
- Real Estate Debt: Origination and management of debt investments secured by real estate in North America.
Strategic corporate development
The firm’s business plan for the next three years is to selectively grow assets under management across our three business units. Our business plan is consistent with the firm’s mission, which is to be the leading real estate investment management firm by consistently outperforming benchmarks on both an absolute and a risk-adjusted basis, and by providing exemplary client service. We do not seek to be the biggest real estate investment manager in terms of assets under management, but rather to grow our business organically by delivering strong performance and excellent client service. As a result, the growth path we have set is a measured one.
INDUSTRIAL: After a pause early in the pandemic, the industrial sector has roared back to life and is seeing some of its strongest quarters ever in terms of net absorption and rent growth. Structural tailwinds that favoured the sector before the pandemic were further boosted by the acceleration in e-commerce adoption rates and focus on building resilient supply chains that have come out of the COVID era. Continued e-commerce market share gains and the importance of omnichannel retailing will support outsized warehouse demand in the decade ahead. The pandemic also exposed weakness in the just-in-time model, which could further support space demand as tenants keep more inventory on hand closer to the end point of consumption.
OFFICE: The outlook for commercial office is perhaps the least clear among the property types. The sector was already facing significant challenges before COVID-19, and the impact of the pandemic on office space demand over the medium to longer term is likely to be significant. One of the lasting effects of changes brought about during the pandemic will be a widespread, permanent adoption of a hybrid in-person and remote working model. Although the individual space needs of tenants across industries, size ranges, and geographies will vary widely, overall there is likely to be a net reduction in total space demand. This will further increase competition among landlords for tenants and skew the odds in favour of the highest-quality buildings and locations offering amenities, flexibility, and a differentiated experience.
RESIDENTIAL: The apartment sector, which held up well during the early stages of the pandemic, is now in the midst of a strong recovery, with national occupancy in mid-2021 hitting the highest level since 2000 and new lease trade- outs and effective rents showing strong growth. Most urban submarkets have seen impressive occupancy recoveries and reduced concessions in recent quarters, while many Sunbelt and suburban markets continue to perform well. Over the long term, demographics, lifestyle preferences, and financial constraints all support an array of rented residential strategies for people across the age and income spectrum.
RETAIL: While retail has been the most challenged of the primary property sectors for several years and long-term headwinds remain, it is emerging from the pandemic with somewhat more clarity than existed previously. The pandemic accelerated many of the changes that were already underway in the retail sector, and it temporarily upended some of the sector’s strengths, such as experiential retail, in the process. However, many retailers have made neces- sary adjustments to their physical store fleets and cut costs, emerging from the pandemic with stronger balance sheets. Other weak retailers that were struggling for years have closed stores and/or gone through bankruptcy. The bifurcation of performance between high-quality, dominant retail properties and low-quality, weaker ones has become even more clear in recent quarters and will continue to define performance in the sector going forward.
OTHER: Alternative sectors continue their ascendance within the real estate investment landscape. Factors driving this include secular trends that support demand, many driven by demographics and the impact of technology on how people live, work, and consume. Self-storage weathered the pandemic well and has shown one of the strongest rebounds of any sector since late 2020. Robust underlying demand drivers combined with modest supply result in steady oper- ating performance in the medical office sector. Student and senior housing face some near-term headwinds but select investment opportunities remain attrac- tive. Other sectors in great demand by investors include single-family rentals, data centres, and life sciences.
Investment principles & strategy
Heitman is a research-driven investment firm. Our strategies reflect constant analysis of economic and demographic trends, property market shifts, and capital flows. In addition, Heitman’s various business lines include public market professionals, direct property investors, debt investment professionals and global resources, fostering a creative atmosphere within Heitman. This translates into an information exchange that helps us stay abreast of changing conditions in all areas of real estate. We then use this information to create innovative strategies designed to meet or exceed our clients’ objectives and expectations.
Heitman appreciates the importance of Global Investment Standards (GIPS®). Heitman’s Public Real Estate Securities group and its North America Private Real Estate Equity group claim compliance with GIPS. Returns for both Heitman’s Public Real Estate Securities group and Heitman’s North America Private Real Estate Equity group have been independently verified by the accounting firm Deloitte & Touche LLP. Heitman’s North America Private Real Estate Equity group has been verified for the periods of 1 January 1997 through 31 December 2020 and Heitman’s Public Real Estate Securities group has been verified for the periods 1 January 1993 through 31 December 2020. To date, our European and Asian private equity composites consist of leveraged investment level time-weighted returns.
Certain Heitman subsidiaries are registered with the appropriate regulatory authorities in the US and abroad and, as such, are subject to applicable regulatory schemes. These operating subsidiaries have implemented their own tailored compliance policies to insure adherence to governing rules and regulations.