Category: Financial / Investment
The San Francisco property marks NBIM’s first U.S. office investment on the West Coast.
These are the second and third investments in the recently formed joint venture, which announced an investment in One Financial Center in Boston in early December.
NBIM and MetLife will maintain their previously announced ownership stakes, 47.5 percent and 52.5 percent, respectively. Net purchase price for NBIM’s 47.5 percent share of the two assets is 480 million dollars (2.95 billion kroner). The gross value of the two assets is approximately one billion dollars (6.14 billion kroner).
–With these two investments, we are expanding our joint venture with MetLife in line with our strategy and original intent, says Karsten Kallevig, chief investment officer for real estate at Norges Bank Investment Management (NBIM), the fund’s manager.
The Washington, DC property is located at 555 12th Street, adjacent to the Metro Center metro station and one block north of Pennsylvania Avenue, in the heart of Washington, D.C.’s East End. The property is a 12-story, free-standing, Class A office building totalling 782,000 square feet (72,650 square meters).The property is certified LEED Gold and is one of the largest full-block office buildings in Washington, D.C. The complex is currently 85 percent leased to a diversified tenant roster.
The property in San Francisco is located at 425 Market Street, at the intersection of Market and Freemont Streets in San Francisco’s South Financial District submarket. It contains approximately 945,000 square feet (87,900 square meters) across 36 stories. The office property is approximately 85 percent leased and is certified LEED Gold. NBIM has acquired a 47.5 percent interest from MetLife, which has owned an interest in 425 Market Street since it was originally developed and owned 100 percent of the asset prior to this transaction.
About the Joint Venture
Combined with the previously announced One Financial Center in Boston, the gross value of the joint venture is approximately 1.7 billion dollars (10.45 billion kroner), including approximately 200 million dollars of financing. NBIM’s net investment for its 47.5 percent stake in the overall venture is 718 million dollars (4.4 billion kroner).
MetLife, Inc. is one of the largest investors in the commercial real estate industry with 55.1 billion dollars in real estate invested assets, including 42 billion dollars in commercial mortgages and nearly 13 billion dollars in equity investments as of September 2013.
Norges Bank Investment Management (NBIM) is the asset manager for the Norwegian Government Pension Fund Global. NBIM seeks to safeguard the long-term financial interests of Norway’s future generations through active management and active ownership. The fund is invested globally in equity, fixed-income and real estate markets. It held assets valued at 5,002 billion kroner, or about 814 billion dollars, at the end of November 2013.
Source: Norges Bank
Published: January 30, 2023