The building at 1177 Avenue of America can be found in New York.
Adam Rountree | Bloomberg | Getty Images
Norwegian $2 trillion sovereign wealth fund is planning to invest more than $5 billion in office buildings in New York City.
The largest fund in the world is managed by Norges Bank Investment Management (NBIM) on behalf of Norwegian population.
NBIM said Tuesday it would pay $542.6 million for a 95% stake in the office property, also known as Sixth Avenue.
This purchase will be a joint venture with Beacon Capital Partner, a real estate investment company. Beacon’s subsidiary will acquire a 5% stake in the building, and Beacon oversees the asset management of the 1 million square feet of real estate.
The deal is valued at $571.1 million and is expected to close in the third quarter of this year.
NBIM and Beacon purchase office buildings from California State Teachers Retirement System and Silverstein Properties.
Founded in the 1990s to invest excess revenues from Norwegian oil and gas industry, the country’s sovereign wealth fund is over 19.8 trillion Norwegian cloners ($1.98 trillion).
The main focus of the fund is global equities; apple, nvidia, TeslaGerman defence giant rheinmetall Chipmaker TSMC – 1.9% of the investment is in real estate.
Its portfolio already includes more than a dozen New York buildings, owned in major Manhattan real estate. The fund owns a 45% stake in Times Square Tower and is invested in property on Madison Avenue, New York City on Broadway, and will adjacent new investments to Avenue in the Americas.
NBIM’s property holdings also spread across the US, with real estate interests in Boston, San Francisco, Las Vegas and other major cities, but its real estate portfolio focuses globally.
As of June 30th, NBIM’s real estate holdings range from 15 countries, with 486 real estate investments worth over $16 billion in the US.
Earlier this year, it was announced that the fund would invest $740 million to purchase 25% of its real estate portfolio in London’s luxury Covent Garden district.
NBIM also agreed to pay 240 million euros ($279 million) earlier this year for a 40% stake in Axa Lifestyle Housing, which holds a platform to run co-living with Spanish and French students.
Earlier this year, the fund recorded a 4% return on private real estate investments.
