Report: Harvard Management Company Sells Warehouses to Private Equity Firm

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.