GIC venture acquires San Fran office trophy

A partnership led by Singapore’s sovereign wealth fund has purchased a controlling stake in a 1.25 million-square-foot office tower that houses Morgan Stanley and Blackstone.

A partnership led by the Government of Singapore Investment Corporation (GIC) has acquired a controlling stake in a 1.25 million-square-foot office tower in San Francisco’s financial district for $851 million. 

According to media reports, the sovereign wealth fund for the city-state of Singapore is part of a group that has agreed to buy a 92 percent stake in 101 California Street from a joint venture between Nippon Life Insurance and Hines. Houston-based Hines, which developed the property, will retain the remaining 8 percent stake in the 48-story building and continue to manage the asset. A GIC spokesperson declined to comment.

Hines constructed the property in 1982 and sold a majority stake to Nippon in 1987. The building was renovated in 2002. The property currently is 95 occupied by tenants that include Bank of America, The Blackstone Group and Morgan Stanley, according to data provider Real Capital Analytics. 

GIC, which manages $247.5 billion of assets according to the Sovereign Wealth Fund Institute, has been one of world’s most active investors in alternatives, including real estate, since its inception in 1981. In its annual report released 31 July, the sovereign wealth fund said it increased its cash holdings to 11 percent from 3 percent as a means to capitalise on future investment opportunities. GIC increased its cash supply after it elected not to recycle as much capital during the year.