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MetLife and Norges form JV, buy Boston trophy

A new multi-billion dollar partnership between MetLife Real Estate Investors and Norges Bank Investment Management has made its first investment.

MetLife Real Estate Investors and Norges Bank Investment Management (NBIM), the manager of Norway’s Government Pension Fund Global, have launched a new joint venture to invest in Class A office properties in top-tier US cities. According to Robert Merck, head of MetLife Real Estate Investors, the Morristown, New Jersey-based real estate investment arm and NBIM will “generally target investments with a gross asset value of $250 million-plus.” The two partners declined to put a value on the overall venture but, due to its long-term strategy and large average investment size, it likely will amount to a multi-billion dollar partnership.
 
“MetLife is pleased to be working with NBIM, an institution whose size and investment philosophy aligns well with our own,” said Steven Goulart, executive vice president and chief investment officer of MetLife, in a statement.  “This venture speaks to our strong capabilities in the asset management space, where we are targeting opportunities to leverage our scale to create long-term value for our investors.” 
 
The two firms have made their initial investment through the joint venture, acquiring stakes in One Financial Center, a trophy office building in Boston with a gross asset value of $700 million. In the transaction, NBIM bought a 47.5 stake in the property from Beacon Capital Partners for $238 million. MetLife, which already held a 50 percent stake in the building, acquired an additional 2.5 percent stake from former partner Beacon.
 
One Financial Center, which currently is 84 percent occupied, totals 1.3 million square feet.  MetLife is a key tenant in the 46-story building, occupying nearly 200,000 square feet. Investment management firm Loomis Sayles & Co. and law firm Mintz Levin are other major tenants. The property is located at 10 Dewey Square, near Boston’s South Station in the city’s financial district.
 
The transaction also marks NBIM’s third US acquisition. The sovereign wealth fund most recently purchased a 45 percent stake in Times Square Tower for $684 million in September. Meanwhile, MetLife most recently made headlines when PERE reported on the firm’s debut core property fund, which is expected to hold a first close on $1 billion by the end of this year.