Hines, the international real estate firm, today announced the launch of Hines U.S. Property Partners (“HUSPP”), the firm’s new flagship commingled fund for the United States with $750 million of equity, which includes a $100 million investment from Hines, giving the fund over $1.2 billion in immediate investment capacity.
The new fund’s first purchase is expected to be a multifamily property in Austin, Texas, for more than $100 million, according to the firm. Hines is also looking for properties in cities like Seattle, Atlanta, Denver, Los Angeles and Dallas, said Alfonso Munk, CIO of Americas at Hines.
HUSPP is an open-ended, diversified fund targeting next-generation assets in top-performing submarkets in major U.S. markets. The fund’s strategy is to “buy, create and manage to core” through research-driven portfolio construction, smarter submarket and sector selection, vertically integrated value creation and product designed for future demand.
HUSPP expects to invest across the living, industrial, office and mixed-use sectors, as well as select niche sectors, such as life sciences and self-storage, to construct a diversified portfolio that targets a balance of yield and growth.
Investors in HUSPP’s first closings include a diverse group of institutional investors comprised of public pension plans, insurance companies, non-profit organizations and family offices. As part of this initial capital raise, Hines’ own $100 million commitment to the fund emphasizes the firm’s strong alignment of interests with its investors. As an open-ended, perpetual fund, HUSPP is expected to continuously raise capital and over time will become a large-scale, multibillion-dollar institutional fund targeting core plus returns in the U.S. market.
“As real estate continues its transformation into a service, we believe investors are finding increased value to work directly with large-scale operators who can bring innovation, flexibility and simplicity for the ultimate customers which are our tenants,” said David Steinbach, global CIO at Hines, in a release. “This fund will provide investors with direct access to our best thinking and execution capabilities.”
The fund’s strategy will emphasize Hines’ top-down proprietary research and leverage Hines’ on-the-ground execution platform to create and hold what Hines views as the core assets of the future.
“As we emerge from the pandemic, the real estate industry is at a critical inflection point and successful managers will need to examine their portfolios in an increasingly dynamic environment,” Munk said. “We are excited to launch this fund and begin implementing our strategy to buy, create and manage to core in order to meet investor demand and lead the industry in re-defining the future standards of core real estate.”
HUSPP will seek to deliver future-proofed, sustainable assets that focuses on addressing the climate emergency and reducing the carbon footprint of the built environment. Today, Hines believes investors and developers are approaching new opportunities by creating more sustainable livable environments that contribute to better life experiences through new standards of flexibility in workplaces, homes and communities of the future.
The Houston-based, privately owned firm was founded by the late Gerald Hines and has $81.7 billion in assets under management.
“Executing upon the entrepreneurial vision of my grandfather and our founder, Hines has been an active and dynamic investor and developer for the past six decades,” said Laura Hines-Pierce, senior managing director, Office of the CEO at Hines. “This is a monumental achievement for Hines as we look to scale our business by meeting investor needs through an expanded flagship funds suite and continue building upon my grandfather’s legacy.”