A joint venture between the California Teachers’ Retirement System and New York-based Silverstein Properties has acquired a 600,000 square foot office building at 575 Lexington Avenue on Manhattan’s East Side for $400 million (€310 million).
The deal was the joint venture’s first in New York, but the partnership will have $2 billion in buying power for local acquisitions, according to a statement.
The 50-year-old building will reportedly undergo value-add renovations. Silverstein, which also controls the site of the planned Freedom Tower, will manage the property.
CalSTRS, the nation’s second largest pension fund with $144 billion in assets, recently announced plans to increase its targeted real estate allocation over the next six years as part of a push to strengthen its presence in alternative asset classes. The retirement system’s real estate holdings generated a return of 36 percent in the fiscal year ended June 30, 2006.
CB Richard Ellis advised the joint venture. Key tenants in the building reportedly include Cornell University, New York Sports Club and Staples.