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Hearthfire Holdings’ Income Investment Strategy is designed for investors who prioritize predictable cash flow, capital preservation, and defined investment terms. Through the Hearthfire Income Fund (HIF), investors target 7–11% annual preferred returns generated through contractual private credit, backed by self-storage real estate collateral.
Rather than relying on speculative appreciation or asset sales, the Income Strategy focuses on structured yield, payment priority, and disciplined underwriting across the self-storage lifecycle.
Self-storage has consistently demonstrated strong operating fundamentals across economic cycles, supported by durable demand, short lease durations, and pricing flexibility.
Hearthfire’s Income Investment Strategy is designed to give investors direct access to these fundamentals through a private credit, debt-fund approach, offering exposure to self-storage without the volatility or long hold periods associated with equity-only strategies.
Through HIF, income is generated through contractual return structures, not market timing.
Key drivers of the strategy include:
Predictable income, delivered through defined preferred returns rather than speculative upside
Capital preservation, supported by hard-asset collateral and conservative underwriting
Defined timelines, with structured repayment paths tied to stabilization, refinance, or execution milestones
Reduced dependence on exit markets, as returns are generated along the way, not only at sale
This approach is designed for investors who value clarity, priority, and consistency in how returns are produced.
HIF provides private credit solutions to self-storage sponsors across multiple stages of the investment lifecycle, including:
Acquisition and recapitalization financing
Development and construction-related capital
Expansion and repositioning capital
Bridge and transitional financing
These investments are typically shorter duration in nature, often measured in months rather than years, with repayment tied to defined project outcomes.
Income is generated primarily through interest and structured return payments, supported by collateral and contractual obligations.
Investors participate in the Income Strategy through HIF investment classes, each designed to accommodate different income, liquidity, and duration preferences.
At a high level, the structure allows investors to:
Receive preferred income distributions targeting 7–11% annually
Participate through defined, contractual return structures
Select from multiple class options, with varying minimums and timelines
Maintain exposure to self-storage real estate without assuming common equity risk
Rather than seeking appreciation through long-term ownership, the strategy emphasizes income-first positioning within the capital structure.
Senior Debt • 60-70%
First-lien, market rate
PRIVATE CREDIT / PREF EQUITY (hearthfire) • 10-25%
7-14% returns, secured/priority
Common Equity • 10-20%
Junior position, highest risk/return
Deal-specific preferred equity and mezzanine investments offering:
7-8% current income
12-14% total coupon value
Secured or priority positions
Direct project participation
Cash
Self-Directed IRA
Solo 401(k)
Ideal for tax-advantaged retirement accounts
Fixed returns treated as ordinary income
K-1 issued annually
Some preferred equity may include depreciation
Consult tax professional for guidance
This strategy may be a fit if you:
Seek long-term capital appreciation
Understand illiquidity in exchange for higher potential returns
Want exposure to self-storage beyond public REITs
From first investment to portfolio expansion,
our Investor Relations Team is here to help.
Each HIF opportunity is structured within a clear, hierarchical capital stack designed to support payment priority and downside awareness.
At a high level, that structure includes:
Senior Debt
First-lien financing from conservative lenders, providing stability and foundational capital efficiency.
HIF Private Credit Positions
Structured debt or credit instruments with defined preferred returns, repayment terms, and collateral support.
Sponsor Equity
Capital that absorbs residual risk and participates in upside beyond HIF’s contractual return.
HIF’s positioning within the capital stack is intentionally designed to prioritize income visibility and repayment structure, rather than exposure to speculative appreciation.
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850 Cassatt Rd, Ste 100, Berwyn, PA 19312
