WASHINGTON, DC-Two DC assets are part of a portfolio of US assets in which Norway's Norges Bank Investment Management, manager of the Norwegian Government Pension Fund Global, acquired a stake. The fund has picked up a 49.9% interest in five commercial office properties from TIAA-CREF, which is retaining 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.

In December 2012, the $685 billion fund got permission to buy real estate outside of Europe. The US was its first target – one that it had been eying for a while. "They have had a rep in New York City for at least a year," James A. Fetgatter, chief executive of AFIRE, tells GlobeSt.com. The fund did have some reservations about investing in the US, he adds, but it thought through the issues and decided to invest. Fetgatter thinks this investment could prompt other reluctant SWFs looking at the US' commercial real estate market to enter. A SWF from South Korea and others in Southeast Asia have been hesitant because of FIRPTA, he says. FIRPTA is the Foreign Investment in Real Property Tax Act, a piece of legislation considered restrictive to foreign investors by some in the commercial real estate industry. "I wouldn't call it a snowball effect but I do think Norway's decision will cause other funds to take another look," Fetgatter says.

If and when they do, he predicts, the District will be at the top of their shopping lists. "DC is a very attractive market for SWFs and will remain so, despite the current issues with the government."