Norway’s SWF inks $1.6bn New York deal

The Norwegian sovereign wealth fund has acquired a 44 percent stake in Trinity Wall Street Episcopal Church’s Hudson Square office portfolio.

Manhattan’s Trinity Wall Street Episcopal Church has sold a significant stake in its Hudson Square office portfolio to Norway’s sovereign wealth fund.

The world’s biggest sovereign wealth fund signed a 75-year contract Friday to purchase a 44 percent stake in 11 offices for $1.56 billion, according to the fund, valuing the portfolio’s 5 million square feet at $3.55 billion. The properties are about 94 percent leased and are located in Hudson Square, a neighborhood of Manhattan’s Midtown South. The Hudson Square-West Village area had a 5.7 percent vacancy rate in the third quarter, according to Cushman & Wakefield.

Norges Bank Investment Management, which runs investment activities of the sovereign wealth fund, has been expanding in real estate worldwide, acquiring properties in New York, Paris, London and Berlin. Its Manhattan properties include stakes in Times Square Tower and 601 Lexington Ave. Earlier this month, the bank published a report saying it could triple its real estate allocation, from 5 percent of its portfolio up to 15 percent, and it opened an office in Tokyo last month. The fund first widened its strategy outside Europe in 2013 to include the US.

Trinity oversees about 5.6 million rentable square feet of commercial properties, in addition to four development sites, according to its 2014 financial report. The church brought in $206 million in leasing revenue last year, up 5.3 percent from 2013.

A Trinity spokeswoman told Bloomberg in September that the deal would allow the institution “to diversify its real estate assets in order to ensure that it will be able to sustain the hundreds of programs, services and ministries provided by the church in service to millions of people for generations to come.”

The church is one of Manhattan’s oldest landowners: A 1705 grant from Britain’s Queen Anne gave the institution 215 acres, most of which were originally farmland then turned into print shops for the burgeoning city’s financial institutions. Now, tenants include MTV Networks, advertising firm Saatchi & Saatchi and network CBS, according to the church’s website.

CBRE represented the church in this transaction. The deal is expected to close before the end of the year.