Providing insight and
managing needs.

Private Real Estate — Debt

Debt investing forms a key cornerstone of our history. We have been active in the debt market since our firm’s formation. As a multi-disciplined firm, Heitman is in a unique position to provide insight and strategic investment expertise to a range of clients seeking senior and mezzanine debt investment opportunities, including insurance companies, pension funds, banks, and individual investors.

  • Process and strategy

    Our team's real estate experience combined with our long-standing history of managing debt investments for institutional investors allows the firm to be highly effective and responsive. Through the execution of our strategies, we strive to create value for our investors. Heitman’s investment process has been honed over the firm’s 50 years of participation in the real estate industry. Our firm possesses the full range of investment advisory capabilities and provides all of these resources to our clients. Ultimately, the underlying real estate drives outcomes within the portfolio. With resources and processes developed and enhanced over several decades of underwriting both real estate equity and debt across multiple real estate cycles, we believe we are uniquely qualified to understand and underwrite the risks inherent in investing in real estate debt.

  • Extensive experience

    Our debt investment professionals have applied experience in public and private debt, acquisition, disposition, and securitization, as well as property and asset management. Our debt investment team taps into the insights and expertise of Heitman's complementary business units. The active management of our in-house asset management and loan administration professionals help us generate the desired outcome of our clients. Our professionals have invested across multiple economic recessions, periods of property market decline, and periods of recovery and expansion. While history never repeats itself exactly, we believe that knowledge of past cycles gives predictive power, which translates into sound, forward-looking investment ideas.

  • Investment philosophy

    Heitman's philosophy for debt investments in real estate closely resembles that of our private equity investments. Our process is steeped in evaluating the fundamentals of a property and its sponsor seeking financing. We focus on the main characteristics of an investment, as well as any asset or market inefficiencies. We also conduct extensive risk management, both during the underwriting and asset management of an investment. We strive to achieve our clients’ investment objectives by adhering to sound real estate investment principles, and we add value by applying:

  • ANALYSIS

    Our debt professionals focus on developing strategies, understanding market conditions, and influencing every step of the investment process with in-depth research.

  • DISCIPLINE

    We are strategic in our investment process, identifying and pricing opportunities that are appropriate for the given stage of the market cycle.

  • LEADERSHIP

    We leverage the extensive expertise gained across multiple cycles to anticipate opportunities and recognize risk.

Global Assets Under Management

  • 600

    Million in assets under management

    USD as of September 30, 2017

Throughout our 50 years of experience investing in real estate debt, we’ve learned what works.

As active participants in the industry, we anticipate and capitalize on market trends for our investors. We implement three primary strategies:

Core/structured senior

Designed for clients who seek investment in a diversified portfolio of senior, first mortgage loans secured by high-quality properties. A large percentage of the total return is generated by current income with low volatility.

  • Separate account
  • Commingled fund

Value-added/mezzanine

Designed for clients who seek investment in higher yielding, fixed-income alternatives produced by structured debt instruments or mezzanine loans secured by property. The income return can be more volatile, but the majority of the total return is generated by income.

  • Separate account
  • Commingled fund

Opportunistic/high-leveraged debt

Designed for clients who seek investments with high-return profiles. These investments can be highly leveraged and may include acquisitions of nonperforming loan pools or unrated securitized debt instruments. A large percentage of the total return is generated by appreciation with much higher volatility as a result.

  • Separate account

For more information on how to access these solutions, please visit the Vehicles page.

We listen to our clients and tailor our approach to provide them with the level of real estate debt exposure that suits their investment needs.

Our current offerings include:

Separate account

Our experienced investment team works with investors to customize their separate account portfolios to meet their objectives. Accounts are offered across the risk/return spectrum, targeting markets throughout the United States. We take into account your investment guidelines while executing the best portfolio for you.

Commingled funds

A commingled fund allows investors to pool their money with other investors to buy assets. A fund provides an investor access to a diverse portfolio at a smaller commitment level than that of a separate account.

  • Heitman Core Real Estate Debt Income Trust: Core-plus, open-end fund designed for clients seeking investments in senior loans on income-producing commercial property across the primary U.S. property sectors.
  • Heitman Real Estate Debt Partners, L.P.: Fund series designed for clients who seek investments in short- and intermediate-term mezzanine financing for high-quality real estate operators and developers in the United States.

For detailed information on these products, please visit the Solutions page.

As a trusted partner, we stay apprised of changing market dynamics in the real estate debt capital market. To learn more about how we interpret the recent developments in the industry, please click on an article below.

  • Complementing Core

    Featured in Private Debt Investor’s US Special Report 2016: The Road Ahead Mirroring the broader US economy, commercial real estate markets have largely recovered from the global financial crisis, and with few exceptions, values and operational performance have returned to …

    September 8, 2016
  • Mezzanine debt: does it make sense today?

    Advancing into the seventh year of an extended and bumpy economic recovery, amidst global uncertainty on the direction and pace of growth, questions naturally arise about the relative attractiveness of alternative real estate investment strategies...

    June 30, 2015