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Norges, TIAA JV to make $350m San Francisco buy

The manager of Norway’s Government Pension Fund Global and the New York-based financial services giant will team up to purchase 405 Howard Street.

Norges Bank Investment Management (NBIM), the manager of Norway’s Government Pension Fund Global, will be adding another Class A office building to its US portfolio, purchasing 405 Howard Street in San Francisco through its programmatic joint venture with TIAA-CREF. The partnership is acquiring the asset from GE Capital Real Estate and Langley Investment Properties for approximately $350 million, according to data provider Real Capital Analytics (RCA).

Located in San Francisco's South Financial District, the 521,555-square-foot office is locally known as the Orrick Building, according to Langley’s website. RCA notes that the 10-story asset is fully leased as of this month to tenants that include the law firm of Orrick, Herrington & Sutcliffe, Moody's, Fitbit and BlackRock. Built in 2002, the property was acquired by the GE and Langley partnership in 2007 for $243 million.

NBIM and TIAA first formed their joint venture in February 2013, marking NBIM’s entrance into the US market. In its initial investment, NBIM purchased a half-stake worth $600 million in a portfolio of New York, Washington and Boston office properties from TIAA-CREF. At the time, the two partners stated that they planned to co-invest in additional office properties in the future and that TIAA-CREF would manage the assets they acquired.

Just last week, PERE reported that a partnership between NBIM and MetLife Real Estate Investors would be purchasing One Beacon Street in Boston for approximately $565 million. The acquisition, along with previous investments in One Financial Center in Boston, the Thurman Arnold Building in Washington, DC, and 425 Market Street in San Francisco, brought the total amount invested by that joint venture to approximately $2.26 billion since its inception in December.

In June, a report from NBIM noted that the  $860 billion sovereign would grow its portfolio globally by the investing  one percent of the fund annually over the next three years in private real estate markets in the US and Asia, representing roughly $8.6 billion each year. In the US, NBIM intends to focus on the New York, Washington DC, Boston and San Francisco markets.  The sovereign fund currently has US real estate partnerships with TIAA, MetLife, Prologis and Boston Properties.