Norway Sovereign Wealth Fund Spends $1.5 Billion on NY and Boston Properties

Norges Bank Investment Management (NBIM), which manages the sovereign wealth of Norway, has inked a deal to acquire a 45% interest in 601 Lexington Avenue (formerly Citigroup Center), in addition to equal shares in two Boston properties for US$ 1.5 billion in cash. This puts the aggregate value of the properties at around US$ 4.06 billion. All the properties are Class A office towers. The seller is the real estate investment trust Boston Properties, Inc. The two Boston properties are the Atlantic Wharf Office Building and 100 Federal Street. After the transaction, NBIM and Boston Properties are forming a joint venture for each of the three real estate properties.

Boston Properties was advised on this transaction by Eastdil Secured.

In the press release, Boston Properties’ Chief Executive Officer, Owen D. Thomas, commented, “We are delighted to expand our very important relationship with Norges Bank Investment Management, a leading global investor, through this partnership on three of our high-quality assets in New York and Boston. This transaction represents an important step in executing our current strategy of recycling capital from existing assets into new development.”

In 2001, then Citicorp, sold its controlling stake in 601 Lexington for US$ 755 million to Boston Properties. Citigroup faced some humility when its name was stripped from the Citigroup Center. In 2008, the building was renamed 601 Lexington Ave.

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