Thank you for sharing!

Your article was successfully shared with the contacts you provided.

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.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 3 free articles* across the ALM subscription network every 30 days
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.