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Report: Harvard Management Company Sells Warehouses to Private Equity Firm

Harvard Management Company is housed in the Boston Federal Reserve Building.
Harvard Management Company is housed in the Boston Federal Reserve Building. By Karina G. Gonzalez-Espinoza
By Andrew J. Zucker, Crimson Staff Writer

Harvard Management Company has sold $950 million in warehouse properties to private equity firm Blackstone Group ahead of HMC’s yearly returns announcement, Bloomberg reported Thursday.

Harvard acquired the properties jointly with MDH Partners, a real estate development company that has worked with Blackstone in the past, according to Real Estate Alert. MDH has spent more than $500 million acquiring 80 properties since 2014, according to Real Capital Analytics.

The warehouse portfolio spans 14 million square feet, Bloomberg reported. Many of the warehouses are last-mile warehouses, which are small industrial buildings often near urban locations that help facilitate expedited delivery to customers who purchase goods from companies like Amazon online.

HMC sold a majority stake in a collection of New York City properties for nearly $244 million to Blackstone earlier this year. The endowment's CEO, N.P. “Narv” Narvekar, oversaw the outsourcing of the Harvard’s real estate management team to Boston-based private equity firm Bain Capital last year.

In a letter to Harvard affiliates in Jan. 2017 announcing the spinoff, Narvekar praised the group's real estate holdings.

"The real estate portfolio has been a key driver of returns for HMC since the direct platform was established in 2010, and the team will continue to be a valuable partner to HMC moving forward,” he wrote.

Narvekar’s recent decisions to sell real estate mark a shift away from how experts envisioned his strategy. His experience in alternative assets — including private equity, hedge funds, and real estate — characterized much of his career prior to joining Harvard.

Last year, HMC posted the lowest returns in the Ivy League.

—Staff writer Andrew J. Zucker can be reached at andrew.zucker@thecrimson.com. Follow him on Twitter @AndrewJZucker.

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