The Norwegian Government Pension Fund Global, known as Norges Bank Investment Management (NBIM), a long-time game-changing investor, just made a big impact announcement. They are sinking $542.6 million to acquire a 95% interest in an office building located at 1177 Avenue of the Americas, aka Sixth Avenue. This big investment is an example of NBIM’s serious interest in the New York City real estate market. The firm has gone on to develop a deep portfolio in the region.
Founded in the 1990s to manage surplus revenues from Norway’s oil and gas sector, NBIM has grown into one of the world’s largest sovereign wealth funds, currently valued at over 19.8 trillion Norwegian kroner, equivalent to approximately $1.98 trillion. As of 30 June 2018, NBIM is invested in real property in 15 different countries. With 486 of its properties located in the United States, totaling more than $16 billion in US real estate, its strongest presence is here.
One of NBIM’s more recent acquisitions was the purchase of the property located at 1177 Avenue of the Americas. This is a strategic play to further bolster its prime Manhattan portfolio. The land under the property alone is worth $571.1 million. We continue to project closing the transaction in time for the end of this year’s third quarter. This investment aligns with NBIM’s earlier decision to invest $740 million in a 25% stake of a property portfolio located in London’s prestigious Covent Garden district.
Through the first half of this year, NBIM realized an astonishing 4% return on its unlisted real estate investments. This success goes on to make their financial strategy in the space much more financially sound. Our fund’s real estate portfolio includes well over a dozen buildings in New York City. It includes high-profile holdings on Madison Avenue and Broadway as well as a large 45% interest in Times Square Tower. The new investment on Avenue of the Americas will provide a great complement to these existing center city properties.
NBIM’s activities reflect its ongoing interest in high-value urban centers, demonstrating a consistent pattern of investing in premium real estate markets. The fund improves its financial bottom line at the same time it creates more vibrant and active urban environments. Its method directly rebuilds the communities it funds.