Hines announced the launch of Hines U.S. Property Partners (HUSPP), a new flagship commingled fund for the United States with $750 million of equity, including a $100 million investment from Hines, giving the fund over $1.2 billion in immediate investment capacity.
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 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 largescale, multi-billion-dollar institutional fund targeting core plus returns in the U.S. market.
David Steinbach, Global CIO at Hines commented, “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. 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. The fund will seek to maximize value at the asset-level through active management and undertake select development to create next-generation assets catering to future tenant demand.
“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,” said Alfonso Munk, CIO of Americas at Hines.
“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 align with the Hines’ corporate ESG initiative that focuses on addressing the climate emergency and reducing the carbon footprint of the built environment.
“We are grateful for the support that we have received from our initial investors,” said Adriana de Alcantara, HUSPP fund manager at Hines. “As we continue to set strategies and invest on behalf of the fund, we will utilize our core strengths – global reach, operational expertise and vertically integrated management capabilities – that have served our investors throughout our firm’s history.”
“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.”
Kirkland & Ellis LLP served as legal advisor to Hines in connection with the fund.