A Canadian pension fund’s big bet on an uninspiring rail yard in the Far West Side of Manhattan has paid off handsomely, and it’s just getting started in New York and other gateway cities.
Oxford Properties Group, the real estate arm of the Omers pension fund for retired police officers and city clerks in Ontario, teamed up with Related on the risky Hudson Yards project in 2010, in the midst of the the real estate crash. Related’s previously partner Goldman Sachs had just changed its focus from long-term plays and backed out.
“Those did not feel like cheap decisions. They all felt like we were paying too much and maybe the world was ending,” Oxford president Michael Turner told Bloomberg. “We happened to be able to be there as a sponsor of quality, with fortitude and a balance sheet to make a decision.”
Jay Cross, Related’s president of Hudson Yards, is a Canadian who knew Oxford’s former president Blake Hutcheson. He worked with Cross on the deal, in which Oxford and Related are 50-50 partners on the general group that oversees the entire development.
Last year, Omers reported returns of 8.7 percent on real estate investments. The Hudson Yards project is part of the Oxford’s push to become an increasingly global presence, Bloomberg reported.
A decade ago, Omers had 96 percent of its assets in Canada. Now, more than 55 percent is invested abroad, with total assets approaching $45 billion. Oxford is looking to boost its exposure in the industrial and multi-family space — and it’s targeting cities that attract technology and talent like New York, London, Sydney and Toronto.
Last year, Oxford bought the southern portion of St. John’s Terminal in Manhattan for $700 million and is planning a 1.3 million-square-foot office to be anchored by Google. [Bloomberg] — Meenal Vamburkar