The New York State Common Retirement Fund purchased a 50 percent stake in a core-plus office portfolio from MetLife Real Estate Investors for $800 million.
The pension plan will finance its interest in the seven-property portfolio with half debt and half equity. Another property could be added to the Metlife portfolio.
MetLife, the biggest US life insurer, originally planned to refinance the seven properties and additional office spaces before deciding to recapitalize the assets, which are located in urban markets throughout the country.
New York Common, the country’s third-largest pension fund, has partnered with MetLife on earlier deals. In 2011, the pension plan bought a 50 percent stake in a Houston skyscraper from the insurer for $255 million. In 2012, the two parties formed joint ventures to buy a Seattle office tower for $549 million and Washington, DC’s Constitution Center for $730 million in separate transactions.
Of the seven properties in the latest transaction, the largest is a 725,000 square foot tower in Atlanta that is 85 percent leased. All of the properties are more than 350,000 square feet and at least 67 percent leased.
MetLife could also sell a 25 percent stake in a $500 million San Francisco office building. That interest is currently owned by local private equity real estate firm Shorenstein Properties.