The Norwegian Pension Fund, or National Oil Fund, as it is also known, has for the first time invested in properties in the US, purchased from the US Pension Fund TIAA-CREF.
This is the Fund's first real estate investment outside Europe and is in line with our strategy to build a global real estate portfolio of high quality, says Karsten Kallevig, director of the Pension Fund's real estate investments.
The fund paid 600 million dollars, equivalent to about 3.3 billion NOK for the properties. They are located in New York City, Washington, D.C. and Boston. The seller is the pension fund TIAA-CREF, which will continue to own 50.1 percent of each building. TIAA-CREF will be responsible for management of the properties on behalf of the partnership. The transaction was completed on February 8th.
Two of the buildings are in New York City, two in Washington DC and one in Boston. The five properties have a total of 172,450 square meters of lettable area. The fund's newly acquired buildings are well located. In Washington one of them is locaated just a few blocks from the White House. In New York one of the buildings is right across the street from the landmark New York Public Library, the nation's second largest library.
- As the world's largest real estate market, properties in the US will be an important part of the long-term property portfolio, says Kallevig. He says the Fund in the initial phase, an that they will look for investments in the largest cities on the East Coast, London and Paris.
- We have now found a model for investing in the United States within certain limitations. The model allows the tax and other regulatory requirements are predictable and reasonable for us as investors, says Karsten Kallevig, director of real estate investments in the Pension Fund.
The Fund amounted to USD 3900 billion yesterday. It is consist of 60 percent in equities, 35-40 percent in bonds and up to 5 percent in real estate.