Boston Properties developed the 47-story tower in the early 2000s.

NEW YORK CITY-Boston Properties, which in June put reportedly its Times Square Tower up for sale, has instead sold a minority interest in the 1.2-million-square-foot office building. Norway’s sovereign wealth fund, the Norwegian Government Pension Fund Global, is paying $684 million for a 45% stake in the property, which is valued at a total of $1.52 billion.

The deal is expected to close in 90 days. When it does, BXP and an affiliate of Norges Bank, which manages the fund, will form a joint venture, with the Boston-based office REIT retaining property and leasing management for the venture. A Goodwin Procter legal team including partners James Broderick, Edward Glazer and Mark Kirshenbaum, and associates Laura Sherman and Argyrios Saccopoulos, advised BXP on the deal.

 “We are extremely pleased to form a new and important relationship with such a strong and reputable organization as Norges Bank, while at the same time once again demonstrating our ability to create and realize value for our shareholders through our development and management expertise,” says BXP executive chairman, Mort Zuckerman. BXP developed the 47-story tower, completing it in 2004; currently it’s 99% leased.

The tower is unencumbered by debt, and there will be no financing involved, according to Norges Bank. It’s subject to a ground lease with the City of New York with 76 years remaining, and it benefits from a Payment In Lieu of Taxes program through June 2024. The JV will hold the contractual right to purchase the fee interest in the property beginning in July 2024.

In a presentation at June’s NAREIT conference in Chicago, BXP president Doug Linde announced that the tower was on the block, with Eastdil Secured spearheading the marketing efforts. “It’s a great time to get the value recognized for some of our assets,” Linde told Bloomberg after the presentation. “It makes sense at times to prune our portfolio.”

The world’s largest SWF, with $760 billion of investments, reportedly seeks to raise its real estate holdings to about 5% of its holdings. Earlier this year, it made its first foray into the US, acquiring a 49.9% stake in an office portfolio valued at $1.2 billion from TIAA-CREF. The assets included 1101 Pennsylvania Ave. and 1300 I St. in Washington, DC; 33 Arch St. in Boston; and 470 Park Ave. South and 475 Fifth Ave. in Manhattan. The fund has also made acquisitions in the UK and Germany.