When Christopher Merrill was starting his own private equity real estate fund in Chicago about five years ago, he was fortunate enough to make wise choices. He brought in Chris Galvin as his financial partner in Harrison Street Real Estate Capital LLC. Galvin was the former CEO of Motorola with a family net worth that ran into the hundreds of millions. He was eager to invest beyond electronics.

Merrill's first fund, with $210 million in equity, invested in a $15 million apartment building near the University of North Carolina at Charlotte. More investments in student housing followed, along with self-storage, medical offices and senior care centers.

“I was lucky to have as a partner Chris Galvin, who took a global view of the economy and was concerned about rising debt levels,” says Merrill, who at 39 is president and CEO of Harrison, while Galvin is chairman. “We decided back then that it would be a real liability to be invested in asset classes tied to the economy. We wanted to be invested in need-based categories of real estate that we felt would hold up better if the economy turned down.”

The formula has worked like a charm. Now into its third fund, Harrison Street has raised $1 billion so far from a variety of institutions and endowments and leveraged that into some $2.5 billion in profitable investments overall. The company poured $600 million into acquisitions last year and expects to invest another $700 million this year.

“We continued to grow and move forward during the recession and Harrison was right there at our side willing to back us,” says Ted Rollins, CEO of Campus Crest Communities of Charlotte, which co-ventured nine student housing projects with Harrison. “Harrison takes a long-term view on investing, just as we do.”

A Chicago native, Merrill got an MBA at London City University while working for Heitmann LLC, a real estate investment firm. In his 20s, he played a key role, setting up a London office and orchestrating investments in emerging markets such as Poland and Hungary when land was still cheap. He learned a powerful lesson, says Merrill.

“Timing can be everything in real estate investing.”