Hines targets undervalued properties with $1B fund

Fund has acquired two properties, $590M committed

Hines CEO Jeffrey Hines (Getty, iStock)
Hines CEO Jeffrey Hines (Getty, iStock)

Houston-based investment firm Hines is ready to rock with its latest fund, targeting undervalued properties across a wide range of sectors in the United States.

The Hines U.S. Property Recovery Fund is looking to raise $1 billion in equity to invest in properties in the 30 largest cities in the country, Bloomberg reported. The fund will have a purchasing power of $2.5 billion when considering debt.

The fund is already on the move, as Bloomberg reported its commitments so far total $590 million. Two California logistics sites have been acquired through the fund for $186 million.

The fund is reportedly open to a wide range of targets for investing, including residential, office, student housing and self-storage. In addition to plans to convert an office property in the Mountain West region to student housing, logistics sites are also on the radar.

“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,” fund manager Dan Box said in a release. “There’s a lot of product that needs to be reimagined and reenergized.”

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The fund is looking at properties that can be redeveloped, and therefore, see a boost in values. A wide array of parties are investing in the fund, including pension funds, financial institutions, family offices, and insurance firms.

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Bloomberg reported in August that Hines had raised $625 million for a CRE investment fund, which was on track to hit $1 billion by the end of September. The Hines U.S. Property Partners fund had a goal of adding another $1 billion on an annual basis.

That fund has a similar focus to Hines’ latest endeavor. The fund was centered around multifamily and industrial properties, but also cast a rod towards life sciences, self-storage, data center and student and senior housing properties.

Hines anticipates closing the fund in May.

[Bloomberg] — Holden Walter-Warner

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