Hines raises $625M for new CRE investment fund

Vehicle targeting multifamily and industrial properties projected to hit $1 billion by October

Hines CEO Jeffrey Hines (Twitter/Hines)
Hines CEO Jeffrey Hines (Twitter/Hines)

Houston-based real estate investment firm Hines has raised $625 million for a new CRE investment fund, with no signs of slowing.

Hines U.S. Property Partners fund is projected to hit $1 billion by the end of September, Bloomberg News reported, with a goal of adding a further $1 billion annually.

Including a $100 million initial investment from Hines, the fund will focus primarily on snapping up multifamily and industrial properties, as well as life sciences, self-storage, data center and student and senior housing properties. It is looking to supplement equity bets with leverage of around 40 percent to produce annual returns of between 9 and 11 percent, according to Bloomberg.

Hines U.S. Property Partners is expected to purchase a $100 million-plus multifamily property in Austin as its first buy with the new capital.

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The new fund is backed by insurance companies, public pensions, non-profits and family offices. It will look to invest in sub-markets of major cities such as Seattle, Los Angeles, Denver, Dallas and Atlanta.

Betting on multifamily and industrial real estate is becoming more prevalent as those markets soar. Last quarter, multifamily investors flooded the market with a second-quarter record $53 billion.

Industrial real estate is also experiencing a boom as e-commerce continues to rise and land available for new warehouses and distribution centers becomes more scarce.

[Bloomberg News] — Holden Walter-Warner