NEW YORK CITY-The Norwegian Government knows where to place its investment bets. Right here in the US. In the first acquisition for Norges Bank Investment Management, manager of the Norwegian Government Pension Fund Global, the fund has picked up a 49.9% interest in five commercial office properties.
TIAA-CREF is the seller and retains the majority stake in the portfolio. The assets are 1101 Pennsylvania Ave. and 1300 I St. in Washington, DC; 33 Arch St. in Boston; and 470 Park Ave. S. and 475 Fifth Ave. in Manhattan. The value of the sale is $1.2 billion.
“This is the fund’s first real estate investment outside of Europe and is in line with our strategy to build a high-quality, global property portfolio,” says Karsten Kallevig, chief investment officer for real estate at NBIM. “As the world’s largest real estate market, the US will be an important part of the fund’s long-term property portfolio.” He went on to say that “key East Coast cities will be the fund’s initial target as it continues to build a stateside footprint.
The fund made its first real estate investments in 2011 in office and retail properties in London and Paris. It is mandated to hold 60% in equities, 35 to 40% in fixed income and as much as 5% in real estate.
“NBIM is an excellent partner for us as we share a similar approach to real estate investing: a long-term investment horizon and an emphasis on large, high-quality assets in gateway cities,” says Tom Garbutt, head of global real estate for TIAA-CREF. “Direct investment in real estate and these principles add value for our clients over time. Our relationship with NBIM extends our real estate investment platform at a time when we see compelling investment opportunities, and it allows us to further diversify our portfolio.”