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Norges Bank to acquire US office assets worth nearly $1bn

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Norges Bank Investment Management (NBIM), which manages Norway’s sovereign wealth fund, is in talks to buy two office buildings in the US for $915m (€677m), according to sources.

The properties in Boston and San Francisco are being bought in joint ventures with US insurer MetLife and TIAA-CREF, respectively.

The Boston property – the 1m sqft One Beacon Street building – is expected to be sold for around $565m by Allianz Real Estate and Beacon Capital Partners, which bought the asset for its closed-end Strategic Partners IV fund in 2006.

NBIM and MetLife’s joint venture, split 47.5% and 52.5%, has invested $2.26bn since its creation in December last year, with no target for future investment.

The joint venture is focusing on office buildings in San Francisco, Los Angeles, Boston, New York and Washington DC.

The deal will be the joint venture’s fourth in the US and second in Boston, having bought the city’s One Financial Center (also from Beacon), Washington DC’s Thurmond Arnold building and 425 Market Street in San Francisco.

In San Francisco, NBIM will pay around $350m for 405 Howard Street.

Langley Investment Properties and GE Asset Management are selling the 521,000 sqft property, which is fully let.

Based on current net operating income, the cap rate on the sale will be around 4%.

All parties declined to comment.

Readers' comments (1)

  • What rules does NBIM adopt to qualify the true value of these property asset values, in protecting their national and individual investors? What knowledge protocols are adopted to determine ethical, transparent or measured investments in commercial property markets?

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