Global investment manager Harrison Street Asset Management is lauding the opportunities in Canada’s alternative property market despite broader economic turbulence and uncertainty.

The Chicago- and London-based company launched its Canadian division five years ago and manages an array of investment funds.

It announced on Sept. 12 its latest Canadian investment, at Simon Fraser University in Burnaby, to develop a 458-bed student rental building in partnership with local developer Mosaic.

The fully furnished student housing complex marks the second investment for the firm in Burnaby, and also the second purpose-built rental building at UniverCity, the community adjacent to the university campus on Burnaby Mountain.

Meanwhile, the company also recently divested a portfolio of self-storage properties in Alberta. Valued at nearly $100 million, the five assets comprise approximately 330,000 net rentable square feet across more than 3,000 units. This disposition marks Harrison Street’s first portfolio sale of Canadian assets. 

Student housing attractive, despite fewer foreign students

Called Symposia, the rental building near SFU is expected to be completed in 2028, in time for the start of the academic year.

Its first project there, Koto (formerly Comma UniverCity), is a 283-bed building scheduled for delivery in 2026. Once both Koto and Symposia are completed, Harrison Street’s portfolio in SFU’s UniverCity will grow to nearly 750 beds and include the only two purpose-built student accommodations on the mountain next to the campus.

Student housing remains an attractive market for Harrison Street, said Jonathan Turnbull, head of Canada for the company, in an interview with RENX.

"The importance of a university education continues to grow, and therefore we continue to see more and more individuals pushing towards getting a university degree, (and) that underlying growth is irrespective of the economic environments that we're in," he said.

Turnbull acknowledged the retreat this year of international students pre-empted by the federal government's cutbacks on international student visas. Those pullbacks have been mostly felt at smaller, community colleges and institutions, but are still a factor larger schools. SFU welcomed 10 per cent fewer international students last year compared to 2023, and that trend will likely continue.

Turnbull said the foreign student caps will have short-term impacts on a sector that’s facing long-term opportunity. "But the offset to (fewer international students) is there is a growing appetite from the domestic student base."

Focus on housing for larger institutions

The company's Canadian strategy focuses on larger institutions with a more competitive educational appeal, he said. "The larger institutions have a more stable base of domestic students, and they also benefit by having the highest-quality international students coming to them."

Symposia will have 1-3 bed units and is located at the corner of University High St. and University Crescent.

Turnbull said Mosaic had owned the land and initially planned a condo development at the site. Harrison Street approached the firm and reached a deal to buy the land and operate the rental, with Mosaic serving as developer.

Symposia is Mosaic’s fifth residential project at SFU’s UniverCity.

Harrison Street is one of the largest private owners of student housing globally. This transaction expands the firm’s Canadian student housing portfolio that includes more than 2,800 beds, of which approximately 1,400 are under development.

Self-storage sale capitalizes on profit

Harrison Street's self-storage divestment in Alberta included properties in Edmonton, Sherwood Park, Red Deer County, Canmore, and Cochrane. 

They were initially acquired in 2021 through Harrison Street’s U.S. closed-end fund series. Turnbull said the assets belonged to an "opportunistic fund" with the proceeds of this sale representing distributions back to the shareholders.

He said demand for self-storage assets remains strong in Canada. "People are paying very healthy pricing for assets that are established that have a little more economic upside."

Since its inception in 2005, Harrison Street has invested over $3.6 billion in gross costs across 323 storage assets, comprising more than 215,000 units across 27 U.S. states. and three Canadian provinces. 

Overall, the company has more than $100 billion in assets under management across its global infrastructure, real estate and credit strategies businesses.

Company focused entirely on alternatives

Big picture in Canada, Turnbull said his team sees continued volatility and continued lack of direction in the traditional four sectors of retail, office, industrial and multifamily.

"We're going to continue to see declining transaction volumes and a . . . lack of direction," he said. 

Harrison Street has spent 100 per cent of its efforts and capital on alternative assets, he said, noting that alternative investment volumes in Canada are at record levels this year.

"Last year was a record year. The year before that was a record year, and this year is going to beat all of them."

He said those sectors mainly include student and senior housing, storage, medical office and life sciences space. To date, Harrison Street’s Canada Alternative Real Estate Fund has made over $1.7 billion of transactions since launching in 2021.

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