Norway's sovereign wealth fund spends $543 million to acquire a Manhattan office building

Norway's sovereign wealth fund, with assets close to $2 trillion, plans to invest over $500 million in an office building in New York City, marking its latest major investment in premium real estate globally.

The fund is the world’s largest sovereign wealth fund and is managed by Norges Bank Investment Management (NBIM).

NBIM stated on Tuesday that it will spend $542.6 million to acquire a 95% stake in an office building at 1177 Avenue of the Americas in Manhattan.

The fund will form a joint venture with local real estate investment firm Beacon Capital Partners. A subsidiary of Beacon will hold a 5% stake in the building and will be responsible for asset management of the 1 million square foot property.

This transaction values the property at $571.1 million and is expected to be completed in the third quarter of this year.

NBIM and Beacon will purchase the office building from the California State Teachers’ Retirement System and Silverstein Properties, who currently own it as a joint venture.

Norway’s sovereign wealth fund was established in the 1990s to invest the surplus revenue from Norwegian oil and gas industries, and manages assets exceeding 19.8 trillion Norwegian kroner (about $1.98 trillion).

While the fund’s main focus is on global equities, including shares in Apple, Nvidia, Tesla, German defense giant Rheinmetall, and chipmaker TSMC, 1.9% of its portfolio is allocated to real estate.

The fund’s portfolio already includes more than a dozen buildings in New York, including prime locations in Manhattan. The fund owns a 45% stake in the Times Square Tower and has investments in properties on Madison Avenue, Broadway, and one adjacent to its new investment on Sixth Avenue.

NBIM’s real estate assets further extend across the United States, with holdings in Boston, San Francisco, Las Vegas, and other major cities, but its real estate portfolio is global in scope.

As of June 30, NBIM’s real estate assets spanned 15 countries, with 486 real estate investments in the United States valued at over $16 billion.