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Hines Launches $1 Billion Fund for Undervalued U.S. Properties

The fund aims to raise $1 billion in equity for investments in 30 of the largest U.S. cities.

(Bloomberg)—The real estate investment firm Hines is raising its first fund to buy and renovate struggling or undervalued properties across the U.S.

The fund aims to raise $1 billion in equity, which would give it purchasing power of $2.5 billion, including debt, according to a statement Monday. So far, it has commitments totaling $590 million and has made two acquisitions.

The fund is seeking investments in 30 of the largest U.S. cities, in property types including residential, office, self-storage and student housing. It’s targeting opportunities to buy assets that were hampered by the pandemic that can be redeveloped, increasing their value. The fund is also looking for deals in sectors that have benefited in the past two years by the rise of e-commerce, such as logistics.

“Covid really provided a moment for occupiers and investors in real estate to look at their portfolio and reexamine their needs, and in many cases, pivot,” Dan Box, a fund manager at Hines, said in an interview.  “There’s a resorting of preferences and re-prioritizing of certain elements. Those forward-looking trends are what we’re looking to play into.”

Investors in the Hines U.S. Property Recovery Fund include domestic and international pension funds, financial institutions, family offices, foundations and insurance firms. The fund recently acquired two logistics sites in California for $186 million, and also plans to convert an office building in the Mountain West region to rental housing.

Last year, Houston-based Hines announced a fund targeting Asia-Pacific investments.

© 2022 Bloomberg L.P.

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