Norway’s Pension Giant Bulks Up Boston Commercial Real Estate … – Chief Investment Officer

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Norges Bank Investment Management, which manages Norway’s $1.4 trillion Government Pension Fund Global, has added to its Boston-area real estate holdings with the recent acquisition of a 45% stake in two life sciences properties in Cambridge, Massachusetts, in a joint venture with Boston Properties Investment Management.

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NBIM paid Boston Properties $746.4 million for the stake, which values the properties at approximately $1.66 billion combined. Boston Properties will retain the remaining 55% stake and will manage the properties on behalf of the joint venture.

The two life sciences properties, which will comprise a total of approximately 810,000 square feet when completed, are 100% pre-leased to pharmaceutical giant AstraZeneca plc and the Broad Institute of MIT and Harvard.

“We are very pleased to grow our portfolio in Greater Boston,” Mie Holstad, NBIM’s chief real assets officer, said in a statement. “The investment aligns with our long-term strategy, and we are delighted to strengthen our partnership with BXP in a sector where we have high conviction.”

The Norwegian pension giant has been investing in Boston-area commercial real estate for more than a decade, having made its first foray into U.S. real estate in early 2013. At the time, the GPFG acquired 49.9% of five office properties in Boston, New York and Washington, D.C., from TIAA-CREF for approximately $1.2 billon. The pension fund had only begun investing in real estate in 2011, when it bought retail properties in London and Paris.

Later in 2013, NBIM formed a joint venture with MetLife to invest in U.S. office properties. The joint venture’s initial investment was One Financial Center in Boston, and NBIM paid $238 million for its 47.5% stake. In 2018, Norges Bank Real Estate Management acquired a 45% stake in a Boston office property in a joint venture with American Realty Advisors for $204.8 million. A few months later, it paid $290.9 million for a 49.9% interest in a mixed-use office and retail property on Boston’s Boylston Street.

In 2021, NBIM paid $391.9 million to buy a 47.5% interest in an office property in Cambridge in a joint venture with MetLife. Later that year, it paid $485.9 million for a 41% share of life science properties in Boston and Cambridge through a joint venture with MetLife subsidiary Alexandria Real Estate Equities.

Related Stories:

Real Estate, Equities Drive 14.5% Return for Norway’s Pension Fund in 2021

Norges Bank Real Estate Management Names New CIOs

Norway Renews US Real Estate Push

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