Norway fund pushing to buy Blackstone’s $2.2B 1095 Sixth: source

Deal for tower could be one of NYC’s largest ever; oil fund just acquired stake in 601 Lex

New York /
Sep.September 17, 2014 11:15 AM

UPDATED, 1:21 p.m., Sept. 17: Fresh off the acquisition of a 45 percent stake in Boston Properties’ 601 Lexington Avenue, the sovereign fund that manages Norway’s substantial oil wealth is making a play for Blackstone Group’s 1095 Sixth Avenue, according to a source familiar with the talks. A deal for the tower, expected to fetch up to $2.25 billion, would be the biggest single office asset sale in New York since the GM Building traded hands in 2008.

Norges Bank Investment Management is gunning to buy the 42-story, 1.2 million-square-foot tower, which is located between 41st and 42nd streets and overlooks Bryant Park, a source with knowledge of its moves told The Real Deal.

The fund, which is associated with nearly $14 billion in total property acquisitions over the last decade, was given a mandate in 2010 to invest up to 5 percent of its assets in real estate outside Norway, according to Real Capital Analytics.

Blackstone acquired 1095 Sixth in 2007, as part of its $39 billion purchase of Sam Zell’s Equity Office Properties Trust. The building, which is 99 percent leased, is anchored by insurance giant MetLife, and Verizon Communications recently reestablished its headquarters there. Whole Foods is also taking about 32,000 square feet at the building.

Besides its investment in 601 Lexington, Norges’ recent Manhattan investments include a $684 million stake in Boston Properties’ 7 Times Square and an investment in 470 Park Avenue South, Real Capital data show. It’s also buying into two Boston Properties’ assets in Boston: a 37-story office tower at 100 Federal Street and a 31-story office tower in the Atlantic Wharf complex.If Norges manages to acquire the tower, the move would be in line with some of these recent deals, according to Ben Thypin, Real Capital’s director of market analysis.

A spokesperson for Blackstone said the sales process had just begun. Eastdil Secured’s Doug Harmon and Adam Spies, who are marketing the property, couldn’t be reached for comment, nor could representatives for Norges.

Given the extremely low yields – typically under 5 percent — for Manhattan’s trophy towers, there are only a handful of deep-pocketed players with the stomach for such giant deals. Still, Thypin didn’t see Norges’ interest in the tower as a sign that the overall office market is hitting its peak.

“The top of the market,” he said, “operates in a parallel universe to the rest of it.”


Related Articles

arrow_forward_ios
Main-MainImage_.psd FT-Thumbnail_.psd
Blackstone to net $4B profit in sale of Vegas casino
Blackstone to net $4B profit in sale of Vegas casino
Blackstone Group's Stephen Schwarzman, KKR's Henry Kravis and Apollo's Leon Black (Getty, Facebook, iStock)
Blackstone, Apollo, KKR take market hit on Evergrande tumult
Blackstone, Apollo, KKR take market hit on Evergrande tumult
The Cosmopolitan of Las Vegas at 3708 Las Vegas Blvd S and Blackstone CEO Stephen Schwarzman (Google Maps, Getty)
Blackstone marketing Cosmopolitan Las Vegas for $5B
Blackstone marketing Cosmopolitan Las Vegas for $5B
Vice Media CEO Nancy Dubuc, Rudin Management's Bill Rudin and Dock 72 (Getty)
Vice plans move to Rudin’s Dock 72
Vice plans move to Rudin’s Dock 72
Blackstone buying WPT Industrial in $3B deal
Blackstone buying WPT Industrial in $3B deal
Blackstone buying WPT Industrial in $3B deal
Blackstone, HPP look to expand studio empire to the UK
Blackstone, HPP look to expand studio empire to the UK
Blackstone, HPP look to expand studio empire to the UK
Rendering of 227 West Street with Brookfield's Brian Kingston and Blackstone's Katie Keenan (OMA, Brookfield, Blackstone)
Brookfield lands $500M for next Greenpoint Landing development
Brookfield lands $500M for next Greenpoint Landing development
Boston Properties CEO Owen Thomas (Thomas by Axel Dupeux, iStock)
Work-from-home threat “overstated,” Boston Properties CEO says
Work-from-home threat “overstated,” Boston Properties CEO says
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...