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CHICAGO-Heitman LLC, headquartered here, has closed its Heitman Value Partners II fund with $800 million of equity commitments from 20 clients and $15 million of its own capital. Heitman expects to acquire more than $2.4 billion in real estate within three years, says Maury Tognarelli, president and CEO. Heitman partner Tom McCarthy will oversee the fund.

The focus of the fund will be value-add properties, Tognarelli tells GlobeSt.com. Heitman “is looking to achieve (leveraged) returns that are in the 12% to 14% range net of all costs,” he says. The fund will invest in a variety of property types including residential, office, industrial, retail and specialty sectors such as medical office, student housing and self-storage facilities. Heitman will focus on the US, Canada and Mexico for acquisitions.

Heitman plans to primarily use joint ventures to acquire the properties. “The strategy at the real estate level will be to identify operating partners, whether they are public or private, that focus on executing niche strategy within their locale,” Tognarelli says. Heitman “will marry our funds with their value creation strategies.”

The fund has already invested or committed 41% of its equity capital, Tognarelli says. The property acquired thus far includes senior housing, data centers, condo hotels and office. Tognarelli did not disclose the value of the properties acquired or give specifics regarding them.

“This is a strategy that we have been executing for clients since the 1990′s,” Tognarelli says. “We launched our first comingled fund to execute this strategy for a broader group of clients in 2004.” Heitman Value Partners II is expected to acquire double the value of the first fund. When the first fund was 100% committed, Heitman decided to have a second fund, he says. Heitman, founded in 1966, manages approximately $20.1 billion in assets in the US, Europe and Asia.

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