Harrison Street has acquired BlackRock’s stake in Fort Detrick’s district energy system. No financial terms were disclosed.
NEW YORK & CHICAGO – May 26, 2020 – Harrison Street’s Social Infrastructure Fund (“SIF”) today announced that it has acquired BlackRock’s Global Energy & Power Infrastructure Fund’s (GEPIF) interest in the district energy system at U.S. Army Garrison, Fort Detrick, a United States Army Medical Command installation located in Frederick, Maryland.
The Fort Detrick Energy Production Facility supplies steam, chilled water, electricity conditioning services and emergency backup power to U.S. Government facilities located at Fort Detrick under a 30-year fixed payment contract that expires in March 2049. Installed in 2008, the facility features state-of-the-art equipment, such as high combustion-efficient boilers, high efficiency chillers and primary pumps, and rotary uninterrupted power supply (“UPS”) units. The facility has undergone several significant expansion projects and is scheduled to complete a third phase in Spring 2021. Under the terms of the agreement, the facility will continue to be operated by Energy Systems Group (“ESG”), a subsidiary of CenterPoint Energy, Inc., which has operated the facility since 2014. The facility was developed and is currently asset managed by Keenan Development.
Fort Detrick is home to a number of government agencies dedicated to biomedical research and development including The National Interagency Biodefense Campus, which unites The Department of Homeland Security, the National Institute of Allergy and Infectious Diseases, the US Army Medical Research Institute of Infectious Diseases, the Department of Agriculture, the Center for Disease Control, and the Department of the Navy. Researchers stationed at Fort Detrick develop vaccines for a variety of diseases such as HIV, cancer and other diseases, and the facility also provides essential back-up communication systems for different federal agencies and was recently used to support hurricane recovery operations. The 1,200-acre campus employs 7,900 military, federal and contractor employees.
Christopher Merrill, Harrison Street’s Co-Founder, Chairman and Chief Executive Officer, said, “Fort Detrick is critical to ensuring the public health and safety of our nation. This asset, Harrison Street’s first with a Federal Government contract counterparty, is reflective of our commitment to investing in critical infrastructure assets and our ability to execute complex transactions amid uncertain environments. We are excited to begin a successful, long-term relationship with ESG and Keenan Development to ensure our partners and communities we serve can achieve their reliability and resiliency objectives. Harrison Street has long served as a top capital provider for leading health systems and higher education institutions and we are thrilled to be bringing our infrastructure investing expertise to the greater Fort Detrick community.”
Since 2018, SIF has committed approximately $530 million in equity across 16 assets, including investments in wind, solar and hydroelectric power, innovation districts, sustainable buildings and district energy. The acquisition of the Fort Detrick Energy Production Facility marks the second investment in district energy for SIF, following its acquisition in 2019 of CoolCo, a Cincinnati based district energy system which provides chilled water services to the Central Business District of downtown Cincinnati, Ohio. The weighted average contract duration for SIF’s current renewable and district energy investments is approximately 21 years. Additionally, weighted average contracted revenue for its Public Private Partnership (“P3”) investments is approximately 45 years.
About Harrison Street
Harrison Street is one of the leading investment management firms exclusively focused on alternative real assets. Since inception in 2005, the firm has created a series of differentiated investment solutions focused on demographic-driven, needs-based assets. The firm has invested across senior housing, student housing, healthcare delivery, life sciences and storage real estate as well as social and utility infrastructure. Headquartered in Chicago with an office in London, the firm has more than 160 employees and approximately $26.4 billion in assets under management. Clients of the firm include a global institutional investor base domiciled in North America, Europe and Asia. For more information, please visit www.harrisonst.com.
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