The Real Deal New York

Norges names CEO of real estate group

Karsten Kallevig has helped Norway's sovereign wealth fund amass an $18B real estate portfolio

December 17, 2015 05:08PM

KarestenKallevig

From left: Karsten Kallevig, 1 Hudson Square and 11 Times Square

Norway’s $840 billion sovereign wealth fund named Karsten Kallevig as the head of its new real estate group, formed this summer to expand the fund’s real estate footprint worldwide.

Kallevig joined Norges Bank Investment Management, a division of Norway’s central bank that manages the country’s substantial oil wealth, in 2010 and helped Norges amass an $18 billion real estate portfolio. In New York City, Norges is in contract to partner on Trinity Real Estate’s 11-building Hudson Square portfolio, in a deal that values the real estate at $3.55 billion. Norges will pay $1.56 billion for a 44 percent share in a 75-year ownership stake.

As of June 2015, Norges held 2.7 percent of its assets in real estate. But it plans to increase that figure significantly under Kallevig. The wealth fund recently asked the Norwegian government for permission to increase its investment in foreign real estate to up to 10 percent of the fund.

“The fund expects to invest around 50 billion kroner [$5.7 billion] in real estate every year going forward,” said Norges Bank Investment Management CEO Yngve Slyngstad, according to Chief Investment Officer magazine.

The fund’s real estate group is focused on acquisitions in 10 to 15 cities, and is looking to expand in Asia, according to Bloomberg.

In addition to the Trinity deal, Norges acquired a minority stake in the office building at 11 Times Square, bought a 45 percent stake in Citigroup Center at 601 Lexington Avenue for $725 million, and partnered with TIAA-CREF to acquire the leased fee position for 2 Herald Square for $365 million.

Outside New York, Norges owns real estate on the Champes Elysees in Paris and London’s Regent Street. [Bloomberg] – E.B. Solomont

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