Heitman LLC
| Company type | Private |
|---|---|
| Industry | Real estate investment |
| Founded | 1966 |
| Headquarters | Chicago , United States |
Area served | Worldwide (including Europe and Asia-Pacific) |
| Products | Private equity real estate, real estate debt, real estate securities (including REITs) |
Heitman LLC (commonly known as Heitman) is a United States-based real estate investment company with its main office located in Chicago. The firm specializes in three primary sectors: private equity real estate, real estate debt, and investments in real estate securities, including Real estate investment trusts (REITs). To support its worldwide operations, Heitman has established offices throughout Europe and the Asia-Pacific region.
Background
Heitman was established in Chicago in 1966, originally concentrating on Mortgage Banking and servicing activities. Its initial goal was to finance real estate development projects during a period when institutional equity investment was scarce. By the 1970s, the company broadened its scope to include equity investment management alongside its debt services, attracting institutional clients such as pension funds and state retirement systems.
During the 1980s, Heitman introduced commingled funds that pooled capital from institutional investors to purchase properties. In 1989, it launched Heitman Real Estate Securities to invest in publicly traded real estate securities, including REITs. Although the firm earned considerable fees managing commercial real estate assets for pension funds, it experienced significant investment setbacks due to the US Real Estate Crash of that decade.
In 1993, Heitman became a subsidiary of United Asset Management (UAM) following an acquisition. The next year, the firm expanded by acquiring JMB Realty's institutional asset management and non-retail property management divisions. This acquisition doubled Heitman’s assets under management from $6 billion to $12 billion and enhanced its competitive position.
In 1997, Heitman proposed converting $3 billion worth of finite-life commingled funds into three newly formed REITs to preserve management fee revenue as those funds matured. However, investors rejected this proposal over concerns related to liquidity, conversion expenses, and fee arrangements. Consequently, the original plan proceeded with the liquidation of 18 funds.
A strategic restructuring occurred in 1998, shifting emphasis toward high-yield real estate investments, REITs, and international markets after incurring losses amounting to several billion dollars in assets under management and facing key executive departures. That same year, Kennedy Wilson acquired Heitman Properties—Heitman’s commercial real estate management and leasing division—for approximately $20 million.
Following UAM’s acquisition by Old Mutual in 2000, ownership of Heitman was split equally between Old Mutual and the firm’s management team. During the early 2000s, Heitman pursued expansion into Asia-Pacific markets to facilitate further growth.
In 2018, Heitman's management purchased Old Mutual’s shareholding, transitioning the company into a fully employee-owned entity. Presently, the firm primarily invests in private equity real estate, with North America representing its largest market segment, followed by Europe and Asia.
Lawsuits
In May 2020, Heitman initiated legal action against Jenner & Block seeking payment exceeding $3.7 million for unpaid rent covering April and May of that year. Jenner & Block responded with a counterclaim in June 2020, alleging that Heitman owed them $840,000 in credits due to restricted access to their Chicago office during the early stages of the COVID-19 pandemic. Both parties reached a settlement in September 2021.