Global real estate investment management firm Heitman has raised $2.6 billion to invest across several property sectors in the latest example of big institutional investors rising above challenges in capital markets.
Chicago-based Heitman said on Tuesday that it has closed Heitman Value Partners Fund IV with commitments totaling $2 billion, exceeding the fund’s $1.75 billion target size for Heitman’s largest-ever closed-end fundraise.
Heitman said the fund was raised from 30 undisclosed investors across seven countries. Investors also committed an additional $620 million of co-investment capital, Heitman said in a statement.
Combined, Heitman said those commitments and expected leverage will provide $6.55 billion of dealmaking capital for properties in medical office, student housing, senior housing, self-storage, multifamily and industrial properties over the next few years.
“We are pleased to announce the final close of HVP VI and are grateful for the confidence and trust our new and existing investors place in us,” Heitman CEO Maury Tognarelli said in the statement. “We view this phase of the cycle as an attractive entry point. Strategies underpinned by secular trends that generate returns from a combination of income and value creation opportunities continue to remain compelling.”
Despite headwinds such as higher borrowing costs, tariffs and other economic uncertainty, many big investors have announced big funds in recent months. That includes Brookfield announcing a record $30 billion fundraising haul, Carlyle Group closing a $9 billion fund and Bain Capital landing $3.4 billion.
Another Chicago-based firm, Mesirow, announced last year that it had raised more than $1.2 billion for multifamily investments.
Heitman said its newly closed fund will focus on a mix of less cyclical sectors with traditional growth sectors such as apartment buildings and warehouses. Its target rate of return is 12% to 14%, according to the statement.
So far, Heitman has committed to 12 investments representing $847 million, or 42%, of capital commitments, a spokesperson said in an email to CoStar News. Specific properties were not identified, but Heitman said sectors in those deals included medical office, student housing, multifamily, cold storage, industrial outdoor storage, industrial and self-storage.
“In a period of continued market dislocation, investors are increasingly looking for partners with deep experience and cycle-tested strategies,” said Mike Trench, executive vice president and co-portfolio manager of Heitman’s value series. “HVP VI is designed to capitalize on the resilience of non-correlated sectors and the emerging opportunities created by today’s capital markets environment.”
Heitman, which has $48 billion in assets under management, said it has deployed five value-add funds in North America since 2004.