Norway’s $650B fund buys into NYC office towers

February 11, 2013 12:00PM

Norway’s $650 billion sovereign wealth fund has bought its first U.S. real estate, after announcing its new investment strategy in October, according to Bloomberg. The fund has paid out approximately $600 million to pension fund giant TIAA-CREF for a 49.9 percent stake in five U.S. office properties in New York, Washington and Boston.

In New York, the fund acquired stakes in a 292,061-square-foot office tower at 470 Park Avenue South — for which TIAA-CREF paid $157 million in cash to SL Green — and a 280,000-square-foot office building at 475 Fifth Avenue, which TIAA-CREF picked up for $144 million.

In Washington, the fund acquired a stake in 1101 Pennsylvania Avenue and 1300 I Street and in Boston a stake in 33 Arch Street. The fund and TIAA-CREF indicated that they will continue to jointly acquire offices properties in the Northeast.

“This is a very long journey,” Karsten Kallevig, chief investment officer for real estate at Norges Bank Investment Management, the fund’s manager, said. “We have an allocation of up to 5 percent of the fund and the fund keeps growing; we’ve rounded $700 billion over the last month or so.” [Bloomberg] —Christopher Cameron