NBIM Makes Its First US Real Estate Investment

Karsten Kallevig - CIO Real EstateNorway’s sovereign wealth fund manager Norges Bank Investment Management has acquired its first property in the USA as part of its approved strategy of increasing the amount invested in real estate assets around the world. NBIM has bought a 49.9% joint venture stake in a portfolio of assets in New York City, Washington DC and Boston. The value of the transaction was of $1.2 billion (NOK6.6 billion).

The remaining 51.1% stake in the acquired properties is retained by TIAA-CREF who will also manage these assets. The property portfolio totals a rentable space of 1.9 million square feet and is comprised of two New York assets, two located in Washington DC and another one in Boston. The joint venture between NBIM and TIAA-CREF plans on buying more office properties in these three US cities.

“This is the fund’s first real estate investment outside of Europe and is in line with our strategy to build a high-quality, global property portfolio. We are very pleased to team up with a partner that has TIAA-CREF’s knowledge and capabilities, and look forward to jointly developing the venture,” said Karsten Kallevig (upper left), chief investment officer for real estate at NBIM. “As the world’s largest real estate market, the US will be an important part of the fund’s long-term property portfolio. We will initially seek to invest in key East Coast cities.”

Norway’s sovereign wealth fund, or Pension Fund Global, which NBIM manages, uses government revenues from the country’s oil and gas industry to make its investments and has made its first property investments in 2011, when it targeted office and retail properties in London and Paris. The fund is mandated to hold up to 5% in property assets, while the majority of its investments are focused on equities (60%) fixed income (over 35%).


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