NEWS

Norway’s sovereign-wealth fund bought a stake in 11 Times Square, a 40-story office tower in midtown Manhattan, in a deal that values the building at $1.4 billion.

Norges Bank Investment Management purchased the 45 percent interest from developer SJP Properties and Prudential Financial Inc. for $401.9 million, the fund said in a statement.

Foreign investors are snapping up real estate in New York City, pushing prices to records. Construction of the 1.1 million-square-foot (102,000-square-meter) skyscraper in Times Square began before the property market collapsed in 2008, without any space leased. It landed its first tenant in 2010, when it was one month from completion. It is now about 85 percent occupied by tenants including law firm Proskauer Rose LLP and Microsoft Corp.

Norway made $4.4 billion of direct purchases of U.S. real estate last year, making it the biggest foreign buyer after Canada, according to commercial-property brokerage CBRE Group Inc.

The sovereign-wealth fund, with a market value of about $860 billion, has been pushing into real estate, with a target to invest 5 percent of its assets in properties. Norges Bank in September agreed to buy a 45 percent stake in each of three office buildings — one in New York and two in Boston — from Boston Properties Inc. for about $1.5 billion. The fund also agreed to purchase a 49.9 percent interest in San Francisco’s Orrick Building through a venture with asset manager TIAA-CREF.

Joint Venture

The owners of 11 Times Square formed a joint venture for the building, with SJP handling the property’s operations and leasing and Prudential Real Estate Investors responsible for asset management, according to Wednesday’s statement. Norges Bank will assume 45 percent of the $507 million mortgage on the tower, at the corner of Eighth Avenue and 41st Street.

In the same neighborhood, the fund owns a 45 percent interest in Boston Properties’ Times Square Tower. It bought the stake in 2013 for $684 million.