Global real estate giant Hines has launched a new “flagship tactical fund” targeting $1 billion in equity, and senior housing is among the targeted product types.
For the fund — called the Hines U.S. Property Recovery Fund — the Houston-based real estate investment firm already secured about $590 million in committed equity, giving it almost $1.5 billion in immediate investment capacity. Hines is seeking a final equity raise of $1 billion, which would have an expected purchasing power of $2.5 billion with leverage.
The fund is aimed at investments across residential, industrial, office and mixed-use property types, including student housing, senior housing, data centers, self-storage and life sciences. The fund is focused on “reimagining” and “reenergizing” existing properties, the company noted in a Jan. 10 press release.
“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,” said Dan Box, who is managing the HUSPRF fund for Hines.
The fund’s first closing includes investors such as pension funds, financial institutions, family offices, foundations and insurance companies. If all goes according to plan, the fund will see its last close in May.
With the launch of the new fund, Hines also announced the acquisition of two logistics properties in California for a total investment of $186 million. All told, Hines oversees investment assets under management totaling almost $84 billion.
The new fund is far from Hines’ first venture into the senior living industry. The company worked with real estate investment trust Welltower (NYSE: WELL) on the development of Sunrise at East 56th, a luxury community managed by Sunrise Senior Living in New York City. Hines is also working on a development pipeline with MorningStar Senior Living and Watermark Retirement as operating partners.
Hines is one of several development firms that is leveraging extensive experience in multifamily and other sectors while expanding in senior living. For Hines, co-locating multifamily and senior living communities — or creating intergenerational buildings — is of interest for the future.
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