GIC buys stake in NYC office tower from Paramount, MSREI

The deal values the office building, leased to a major bank, at $1.1bn.

GIC Real Estate is purchasing a majority stake in a Manhattan office building, valuing the property at $1.1 billion, according to data provider Real Capital Analytics (RCA).

The real estate investment arm of GIC Private Limited, Singapore’s sovereign wealth fund, is acquiring a 60 percent interest in 60 Wall Street from a joint venture comprising real estate investment trust Paramount Group and Morgan Stanley Real Estate Investing (MSREI). MSREI is selling its entire 37.7 percent stake, while Paramount is selling part of its 62.3 percent stake and will continue to operate the building.

The building is fully leased to Deutsche Bank, whose lease expires in six years, according to RCA. GIC’s annual yield on the building is expected to be about 6 percent, according to real estate trade publication Real Estate Alert. The publication had reported in August that a majority but passive stake in 60 Wall Street was for sale.

A spokesman for Paramount declined to comment, and GIC and MSREI could not be reached at press time.

JPMorgan bought the property’s site for development in 1984 for $600 million and constructed the 47-floor tower, selling it in October 2001 to Deutsche Bank for $611.7 million. The German financial services company then did a sale-leaseback to MSREI and Paramount in April 2007 for $1.2 billion, according to RCA. MSREI purchased its minority stake through its Special Situations Fund III, which closed in April 2008 on $5.9 billion, according to an announcement at the time.

GIC’s last publicly-available transaction in New York was the January 2014 purchase of a stake in the Time Warner Center, according to RCA. The sovereign wealth fund contributed $400 million in equity to the joint venture to purchase the building, which also included the Abu Dhabi Investment Authority and New York-based Related Companies. The trio bought the 55-floor building at 10 Columbus Circle for $1.3 billion in a sale-leaseback to Time Warner.

GIC manages about $100 billion, according to its website.