The Real Deal New York

Hong Kong pays $1.2B for stake in 1095 Sixth Ave.

Callahan, Ivanhoe Cambridge bought office property for $2.2B in 2015

August 03, 2016 02:00PM
By Konrad Putzier

3 Bryant Park (inset from top: Norman Chan and Daniel Fournier)

1095 Sixth Avenue, also known as the Salesforce Tower New York (inset from top: Norman Chan and Daniel Fournier)

An investment fund controlled by Hong Kong’s de-facto central bank bought a 49 percent stake in 1095 Sixth Avenue from Ivanhoe Cambridge and Callahan Capital Partners for $1.15 billion, property records show.

The buyer, Real Summit Investment, is a real estate investment subsidiary of the Hong Kong Monetary Authority’s Exchange Fund.

Ivanhoe Cambridge, the real estate investment arm of Quebec’s public pension plan, and Chicago-based fund manager Callahan, bought the 1.2 million-square-foot tower — also known as the Salesforce Tower New York and 3 Bryant Park — for $2.2 billion from the Blackstone Group in January 2015.  The new transaction values the office tower at $2.35 billion. Blackstone TRData LogoTINY recently began marketing the neighboring office building 1065 Sixth Avenue, which could fetch $700 million.

According to its website, the Exchange Fund’s mission is to control the exchange rate of the Hong Kong Dollar. The Hong Kong Dollar’s value is linked to the U.S. Dollar by government policy, and the HKMA has to hold U.S.-Dollar-denominated assets in reserve to maintain the link.

“To diversify risks, we decided to allocate, in a prudent and incremental manner, a small portion of the Exchange Fund to alternative asset class comprising global private equity and overseas real estate,” the HKMA’s deputy chief executive Eddie Yue said in a December speech.

HKMA’s Exchange Fund invested $9.7 billion in real estate and private equity in 2015, according to the Asian Venture Capital Journal.

Representatives for HKMA and Ivanhoe Cambridge did not immediately respond to a request for comment.

Enterprise software firm Salesforce.com is set to be the 41-story building’s anchor office tenant by the close of 2016. The MetLife logo at the top of the tower will be replaced with Salesforce’s.

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