Chicago-based Harrison Street Real Estate Capital found a whole lot of the alternative assets it likes—think student housing and medical office—when it purchased WRIT's medical office portfolio last year for $500M. We caught up with CEO Chris Merrill last week, and he tells us the 1.5M SF portfolio is fitting right in, and that DC's demographics will be a boon going forward. Chris says Harrison Street was attracted to the region containing four of the 10 wealthiest counties in the country as well as the presence of several strong health systems (MedStar, Inova, among others).
Here's one of the former WRIT properties, 2440 M St in the West End. The retention rates of doctors and hospital systems in the DC region was another big factor for Harrison, Chris says. With almost $6B under management already, Harrison Street might not be finished buying in DC and elsewhere. Supply on the market remains tight, though, which could lead the firm to get more selective with acquisitions: "The challenge is that accessing those asset classes is hard."
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