The constructing situated at 1177 Avenue of America is seen in New York.
Adam Rountree | Bloomberg | Getty Images
Norway’s $2 trillion sovereign wealth fund intends to speculate greater than half a billion {dollars} in a New York City workplace constructing, its newest main funding in prime international actual property.
The fund, the most important of its form in the world, is managed by Norges Bank Investment Management (NBIM) on behalf of the Norwegian inhabitants.
NBIM said on Tuesday that it might pay $542.6 million for a 95% stake in an workplace property at 1177 Avenue of the Americas — often known as Sixth Avenue.
The buy will probably be a three way partnership with actual property funding agency Beacon Capital Partners. A subsidiary of Beacon will take a 5% stake in the constructing, with Beacon overseeing asset administration for the 1 million square-foot property.
The deal, which values the property at $571.1 million, is predicted to be accomplished in the third quarter of this yr.
NBIM and Beacon will probably be shopping for the workplace constructing from California State Teachers’ Retirement System and Silverstein Properties, who at the moment personal it beneath a three way partnership.
Set up in the Nineteen Nineties to speculate extra revenues from Norway’s oil and gasoline trade, the nation’s sovereign wealth fund has a worth of greater than 19.8 trillion Norwegian kroner ($1.98 trillion).
While the fund’s primary focus is international equities — with stakes in Apple, Nvidia, Tesla, German protection big Rheinmetall and chipmaker TSMC — 1.9% of its investments are in actual property.
Its portfolio already consists of greater than a dozen New York buildings, with holdings in prime Manhattan property. The fund owns a forty five% stake in Times Square Tower, and is invested in properties on New York City’s Madison Avenue, Broadway and one that may neighbor its new funding on Avenue of the Americas.
NBIM’s property holdings additionally span additional throughout the U.S., with stakes in properties in Boston, San Francisco, Las Vegas and different main cities — however its actual property portfolio is globally centered.
As of June 30, NBIM’s actual property holdings spanned 15 international locations, with 486 property investments price greater than $16 billion in the United States.
Earlier this year, it was introduced the fund would make investments $740 million to purchase 25% of a property portfolio in London’s upmarket Covent Garden district.
NBIM additionally agreed to pay 240 million euros ($279 million) earlier this yr for a 40% stake in AXA Lifestyle Housing, which holds a platform that owns and operates scholar and co-living properties in Spain and France.
In the primary half of the yr, the fund posted a 4% return on its unlisted actual property investments.