The Norwegian oil fund, the world's largest sovereign-wealth fund, bought $600 million real estate in New York, Washington and Boston, with 49.9 percent of the properties on a joint venture with TIAA-CREF, the retirement account for non-profit institutions, reported Bloomberg.
TIAA-CREF, the primary retirement supplier for academics and researchers, were looking for investors that can ease rising rent costs and the demand from occupants for more preferred locations. It currently has $502 billion under supervision and direct real estate investment worth $19 billion, according to the Wall Street Journal.
The Norwegian fund is coming to two properties in the Big Apple: located on 470 Park Avenue South and 475 Fifth Avenue. It will be on their list of future properties in the Northeast region, according to a statement from the fund, officially known as Government Pension Fund Global.
The other properties are located at 3 Arch Street in Boston and 1101 Pennsylvania Avenue and 1300 I Street in Washington.
The $650 billion fund, managed by the Norwegian central bank, is eyeing future investment opportunities with American partners in pension funds and insurance companies, according to Karsten Kallevig, chief investment officer for real estate at Norges Bank Investment Management, in an interview with Bloomberg.
"This is the fund's first real estate investment outside of Europe and is in line with our strategy to build a high-quality, global property portfolio," Kallevig said.
Kallevig told Wall Street Journal that one-third of oil-fund is in real-estate holdings, out of which $11 billion will be expended in the United States. They predict that goal will be met in 2021 and has potential to go higher. Their interest comes at a time when other foreign investors, including Chinese, are sparking interest in U.S. real estate.
Norway recluses their surplus for foreign investment opportunities and past European investments were made in London, Paris Frankfurt, Berlin, Zurich and England.
