Houston-based international real estate firm Hines announced Monday the launch of its flagship tactical fund series in the United States. The fund is looking to raise $1 billion in equity, with a purchasing power of $2.5 billion after leverage, by May. Senior living is among the targeted property types for investing.
The firm has $590 million of equity already committed, along with two investments valued at $186 million, giving the fund almost $1.5 billion in immediate investment capacity.
The Hines U.S. Property Recovery Fund is a closed-end, diversified fund, targeting tactical investment opportunities across 30 of the largest U.S. metropolitan statistical areas. The fund will pursue investments across various property types, including senior living.
“Residential living, which senior living falls under, is a major focus for us. We would be happy for senior living assets to make up a meaningful component of our residential allocation, up to $300 or $350 million gross. We are able to consider strategies from value add to redevelopment or conversion and development,” Dan Box, HUSPRF fund manager at Hines told the McKnight’s Business Daily.
Despite a long track record of higher-yielding projects, this is the first time Hines will offer its investor-partners direct, priority access to this segment of its pipeline through a Hines-managed fund allowing investors to benefit from Hines’ experienced suite of in-house development, construction and property management resources, the firm reported.
“The ways in which we use real estate have changed drastically over the last 10 years, but the built environment hasn’t always kept pace. There’s a lot of product that needs to be reiimagined and re-energized,” Box said.
“In an environment where returns are getting thinner, we believe the right approach is to focus on asset-level value creation and actually boosting net operating incomes rather than just relying on a buy-low, sell-high thesis,” Box added.
Hines previously has invested in the senior living industry in a joint venture with Welltower on an urban senior living community in Manhattan and as co-investors in MorningStar Senior Living in Texas.