CPPIB sells office stake to CIC for $1bn

The Chinese sovereign wealth fund bought a 45% interest in a New York City office tower through Invesco Real Estate.

The Canada Pension Plan Investment Board (CPPIB) sold a stake in a New York office building for over $1 billion, the Toronto-based pension system said last month.

Eastdil Secured brokered the deal, according to data provider Real Capital Analytics.

Dallas-based real estate investment manager Invesco Real Estate bought the 45 percent stake in 1221 Avenue of the Americas on behalf of China Investment Corporation (CIC), a Beijing-based sovereign wealth fund, RCA research showed. Neither Invesco nor CIC could be reached for comment.

The transaction values the building at $2.3 billion, according to CPPIB. New York-based real estate investor Rockefeller Group will retain its 55 percent stake and continue to operate the building.

CPPIB bought the stake in the 51-story building in 2010 for about $500 million, according to RCA. Built in 1969, amenities include an auditorium for meetings, a fitness center and restaurants. The building is 93 percent occupied, with major tenants including White & Case, Morgan Stanley and Comcast, according to RCA. Its former anchor tenant, McGraw Hill Financial, moved from the building in 2015 and re-branded as S&P Global last year.

“Valuations in the Manhattan office market have increased significantly since our acquisition of 1221, and we feel this is an opportune time to monetize our position in the property,” Hilary Spann, CPPIB’s head of US real estate investments, said in last month’s statement. “Manhattan remains a target market for us, and we continue to pursue new investment opportunities here and in other key US real estate markets.”

CPPIB managed $300.5 billion as of September 30. It also had a 6.3 percent net return in the first half of 2016, according to its second quarter investment report. The pension system held $38.4 billion of real estate investments as of September 30, including $11.2 billion in US real estate.