MetLife, Norges JV invests in two more properties

Less than one month after announcing the launch of their new partnership, MetLife Real Estate Investors and Norges Bank Investment Management (NBIM), the manager of Norway’s Government Pension Fund Global, have invested in two more properties. Along with their December acquisition of One Financial Center in Boston, the new investments bring the gross value of the joint venture to $1.7 billion. 

 

The first new investment is the purchase of the Thurman Arnold Building in Washington, DC, which the partnership purchased from Toronto-based insurance company Manulife Financial. Although MetLife and NBIM did not release the financial terms of the transaction, data provider Real Capital Analytics notes that the property sold for approximately $498 million. The 12-story, 782,000-square-foot Class A office complex is currently 85 percent leased to major tenants like law firm Arnold and Porter.

 

In the joint venture’s second new investment, NBIM purchased a 47.5 percent share in 425 Market Street in San Francisco from MetLife, which previously held full ownership of the property. MetLife will retain the remaining 52.5 percent interest in the asset. The 945,249-square-foot office building is located in the city’s south financial district and has a rumored total value of $495 million, according to Real Capital Analytics.

 

“We are pleased to invest in these high-quality assets that should provide attractive returns over a long-term investment horizon,” said Robert Merck, MetLife’s global head of real estate investments, in a statement. “Our growing partnership with NBIM speaks to our strong capabilities in the asset management business.”

 

In mid-December, MetLife and NBIM announced the new joint venture with their first acquisition, in which both parties acquired 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.

 

At the time of their initial investment, Merck said MetLife’s real estate investment arm and NBIM would “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.