Norges Bank to buy stake in 11 Times Square

Prudential, SJP were offering up to a 49% interest

From left: Norges' Yngve Slyngstad, 11 Times Square, Steven Pozycki (credit: STUDIO SCRIVO) and Darcy Stacom
From left: Norges' Yngve Slyngstad, 11 Times Square, Steven Pozycki (credit: STUDIO SCRIVO) and Darcy Stacom

Norges Bank Investment Management, a division of the central bank of Norway, is in contract to acquire a minority stake at 11 Times Square for an undisclosed price, The Real Deal has learned.

A partnership between developer Steven Pozycki ‘s SJP Properties and a fund managed by Prudential Real Estate Investors was shopping a 49 percent interest in the 40-story, 1.1 million-square-foot office trophy tower in November.

Sources close to the deal said the contract is for a stake between 40 and 49 percent, but declined to give specifics.

CBRE’s Darcy Stacom and William Shanahan were marketing the stake on behalf of the sellers. They declined to comment, as did representatives for Norges.

Occupancy at the 600-foot-tall Midtown tower, also known as 640 Eighth Avenue, is at more than 85 percent, sources said.

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The tower opened in early 2011. It is anchored by law firm Proskauer Rose, which occupies 400,000 square feet. Microsoft is also a major tenant at the tower, with more than 200,000 square feet, according to CoStar Group data.

At the time that SJP broke ground on the building in 2007 on the eve of the downturn, it was the largest speculative building in the city. A 170,000-square-foot block of space from floors 31 through 36 has yet to be leased.

In September, Norges Bank Investment Management agreed to buy a 45 percent interest in Citigroup Center at 601 Lexington Avenue from Boston Properties for about $725 million. It also bought a 45 percent stake in the ground lease at 7 Times Square for $684 million from the real estate investment trust in 2013. Elsewhere in Midtown, Norges partnered with TIAA-CREF to acquire the leased fee position for 2 Herald Square from SL Green for $365 million in November.

Norges, which manages Norway’s substantial oil wealth, received a mandate in 2010 to invest up to 5 percent of its assets in foreign real estate, as TRD reported.

(Adam Pincus contributed reporting)