Buildings surround Times Square in New York August 24, 2011.LUCAS JACKSON/Reuters
Norway's sovereign-wealth fund bought a stake in 11 Times Square, a 40-story office tower in midtown Manhattan, in a deal the seller says values the building at $1.4-billion (U.S.).
Norges Bank Investment Management purchased the 45-per-cent interest from developer SJP Properties and Prudential Financial Inc., according to SJP.
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 per cent occupied by tenants including law firm Proskauer Rose LLP and Microsoft Corp.
Line Aaltvedt, a spokeswoman for Oslo-based Norges Bank, declined to comment on 11 Times Square last week, when a deal to buy the stake was reported by the Real Deal.
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 per cent of its assets in properties. Norges Bank in September agreed to buy a 45-per-cent stake in each of three office buildings from Boston Properties Inc. for about $1.5-billion. The properties are 601 Lexington Ave. in Manhattan and the Atlantic Wharf Office Building and 100 Federal Street in Boston.
The fund also agreed to purchase a 49.9-per-cent interest in San Francisco's Orrick Building through a venture with asset manager TIAA-CREF.