WASHINGTON, DC-The Canada Pension Plan Investment Board has acquired a 45% equity stake in two office buildings Vornado Realty owns in the District: 1299 Pennsylvania Ave., called the Warner Building, and 1101 17th St., NW. The $91 million CPPIB has sunk into the properties represents its first real estate investment in Washington, DC’s CBD.

CPPIB is assuming 45% of the existing mortgage debt. The two assets have a total implied value of $526 million. CPPIB was unable to return a call to GlobeSt.com in time for publication.

Vornado realized a net gain of approximately $54 million on the sale of the Warner Building to be recognized in the fourth quarter. The gain on 1101 17th will be recognized when Vornado monetizes its investment. Vornado will retain its 55% ownership interest and continue to manage and lease these properties.

CPPIB’s venture with Vornado is illustrative of a larger trend of REITs and private equity or institutional investors partnering to shore up balance sheets or stretch even further the capital available to them for investment.

The 1299 Pennsylvania Ave. building is a 13-story, class A office that is over 600,000 square feet and also houses the historic Warner Theatre, a 1,850-seat theatre. The transaction values this property at $445 million, or $737 per square foot. The 1101 17^th asset is a 13-story, 200,000-square-foot building. The transaction values this property at $81 million, or $382 per square foot. Vornado Realty Trust refinanced the Warner Building in 2006 for $292.7 million. It realized net proceeds of approximately $133 million after repaying the loan.