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Heitman Closes $2.6B Fund to Capitalize on Real Estate Dislocation

Heitman Closes $2.6B Fund to Capitalize on Real Estate Dislocation

Backed by investors from seven countries, Heitman’s record-breaking fund is a bold play on the real estate cycle’s next phase.

Nina Dale
January 22, 2026

Together with

Good morning. The smart money’s making moves. Heitman just locked down $2.6B plus leverage to target real estate opportunities others might be missing—focusing on timing, sector bets, and a cycle-aware strategy.

Today’s issue is sponsored by Wharton Online—Master real estate investing with the same training top firms like Blackstone rely on.

🎙️This week on No Cap: Hoya Capital’s David Auerbach pulls back the curtain on the REIT market—breaking down public vs. private valuations, capital flows, and the signals investors can't afford to miss heading into 2026.

CRE Trivia 🧠

Which U.S. state leads the nation in installed wind power capacity?

(Answer at the bottom of the newsletter)

Market Snapshot

S&P 500

GSPC

6,875.62

Pct Chg:
+1.16%

FTSE NAREIT

FNER

775.38

Pct Chg:
+0.25%

10Y Treasury

TNX

4.251%

Pct Chg:
-0.044

SOFR

30-DAY AVERAGE

3.70%

Pct Chg:
-0.00

*Data as of 1/21/2026 market close.

Distress Hunt

Heitman Closes $2.6B Fund to Capitalize on Real Estate Dislocation

Heitman has its global HQ in Bank of America Tower in Chicago. (Robert Gigliotti/CoStar)

The Chicago-based investment manager sees opportunity in market chaos—aiming to deploy $6.6B into real estate sectors ripe for rebound.

Biggest fund yet: Heitman has closed its largest-ever closed-end fund, Value Partners Fund VI, with $2B in commitments—exceeding its target. An additional $620M in co-investment capital and leverage brings total buying power to about $6.6B. The fund aims for net returns of 12% to 14%.

Where the money’s going: The strategy targets traditional growth assets like apartments and industrial warehouses, alongside alternatives such as medical office and student housing—sectors gaining investor interest amid demographic shifts and supply-demand imbalances.

Global investor backing: The capital came from over 30 institutional investors across seven countries, highlighting strong global interest in U.S. real estate as the market stabilizes after years of rate-driven disruption.

Timing the cycle: Heitman sees this as a prime entry point. EVP Michael Trench cited the reset in valuations, growing comfort with higher rates, and limited supply as drivers of a strong investment window.

Industry context: Heitman isn’t alone. The Carlyle Group-backed Rubenstein Partners also recently raised capital to target similar sectors, signaling growing confidence among seasoned investors that the bottom may be in for certain asset classes.

➥ THE TAKEAWAY

Betting on dislocation: With capital ready and dislocation still present, Heitman is betting that market turbulence has created opportunity. For investors, funds like this signal conviction—not crisis—in a real estate rebound.

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✍️ Editor’s Picks

Beyond foot traffic: CenterCheck uses anonymized credit and debit card transactions to reveal store-level sales, giving retail CRE professionals clearer insight into tenant performance, leasing risk, and acquisition underwriting. (sponsored)
Global capital: Global investors are set to deploy $144B into CRE in 2026, driven by falling rates, rising demand, and renewed appetite for core and opportunistic assets.
REIT rebuild: REITs raised nearly $80B in 2025, led by debt offerings and a late-year M&A uptick.
Trophy funding: Private-label CMBS issuance jumped 21% in 2025 to $125.6B—its highest post-GFC total—driven largely by a wave of mega-sized, single-asset deals.
Investor crackdown: Trump issued an executive order targeting large institutional investors in the single-family housing market, while exempting BTR projects.
Yield warning: Soaring 10-year Treasury yields are flashing investor anxiety over inflation, tariffs, and Trump-era policy unpredictability.
Bank comeback: Regional banks are cautiously increasing CRE lending in 2026 as lower interest rates and stabilizing credit conditions boost confidence.

🏘️ MULTIFAMILY

Rent outlook: Multifamily rents are expected to rise about 2% in 2026 as new supply slows, though gains will vary by region and concessions will remain in play.
SFR securitization: Blackstone’s Tricon Residential is securing a $411M CMBS loan backed by nearly 1,500 single-family rentals across nine states.
C-PACE debut: Douglas Development is tapping Richmond’s first C-PACE loan, using $38M from the state-run program as part of a $158M office-to-residential and hotel conversion.

🏭 Industrial

Texas tech: Texas is poised to become the nation’s top data center market by 2028, fueled by the AI boom, cheap land and gas, and a business-friendly power landscape.
Local backlash: Data center cancellations quadrupled in 2025 due to rising community pushback over water use, energy demands, and quality-of-life concerns.
Offloading assets: PepsiCo sold an 81,200 SF warehouse in San Fernando to BLT Enterprises for $31.7M.
Midwest move: Brennan Investment Group acquired an 800K SF, 13-property industrial portfolio across Chicago and Milwaukee, expanding its small-bay footprint.

🏬 RETAIL

Flagship push: Miami retail saw 122K SF of positive absorption in Q4, led by major leases like PopStroke’s 75K SF.
Cost reduction: Macy’s will lay off nearly 1,000 employees as it closes its Cheshire, Connecticut fulfillment center in phases through 2027.
Asian anchor: Asian grocery giant H Mart will open its largest U.S. store in Fremont, CA—a 100,000 SF, two-level location with a food hall and bar.
Fashion exit: Women’s apparel chain Francesca’s is reportedly liquidating inventory and closing all 457 locations.

🏢 OFFICE

Post-peak: U.S. office vacancies have begun to decline in early 2026 after peaking last year, signaling early signs of stabilization in the sector.
Office hunt: Anthropic is seeking up to 450K SF of office space in Manhattan, a major jump from its current lease.
Tempe strength: Tempe led Metro Phoenix’s Q4 office market with 185K SF of net absorption, driven by strong sublease demand, rising Class-A interest, and limited new construction.
Loan trouble: An $87M CMBS loan tied to Blackstone and Worthe's vacant Burbank office building has gone into special servicing due to imminent default.

🏨 HOSPITALITY

Extended expansion: Noble Investment Group acquired a 14-property WoodSpring Suites portfolio in high-growth U.S. markets, continuing its aggressive push into extended-stay lodging.
High stakes: Genting secured a $755M refinancing from Wells Fargo to double the size of its Queens casino complex, part of a $7.5B expansion plan following its New York casino license win.
Buyers' window: U.S. hotel sales rebounded in late 2025 as investors chased discounts, pushing annual transactions near $15B.

A MESSAGE FROM REAP CAPITAL

Class A Basis Reset - 25% Below Replacement Cost

Creekside at Vantage (249 units, 2017-built Class A) in North Dallas is a lender-driven sale at ~25% below replacement cost.

Underperformance stems from a cash-constrained, out-of-state owner—creating a clean lease-up and operational turnaround with minimal capex. Underwritten entry is ~5.8% cap on normalized occupancy.

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*This is a paid advertisement. Please see the full disclosure at the bottom of the newsletter.

📈 CHART OF THE DAY

Credit spreads are widening for hyperscalers while tightening for industrials, signaling a growing divergence in market sentiment between the two sectors.

CRE Trivia (Answer)🧠

Texas leads the U.S. in wind power capacity and generates roughly 25% of its electricity from wind.

Heitman Closes $2.6B Fund to Capitalize on Real Estate Dislocation

Backed by investors from seven countries, Heitman’s record-breaking fund is a bold play on the real estate cycle’s next phase.