Government Pension Fund Global, Oslo, invested $1.2 billion in its first dedicated U.S. real estate portfolio through a joint venture with TIAA-CREF, fund spokeswoman Bunny Nooryani said.
The sovereign wealth fund, which has total assets of about 3.9 trillion Norwegian kroner ($701 billion), owns 49.9% of each of the properties purchased by the joint venture. TIAA-CREF, which owns the remaining share, will also manage the properties. Initial investments were made in five office properties in New York, Washington and Boston, “in line with our strategy to build a diversified, global (real estate) portfolio,” Ms. Nooryani said.
Suzan Amato, managing director and head of global real estate strategic joint ventures at TIAA-CREF, added: “We definitely have a directive to go shopping” for additional core office properties in the three U.S. gateway cities.
“The partnership fits squarely into our sweet spot,” Ms. Amato added. “This is one of our core competencies.”
As of Dec. 31, about 0.9% of total assets were invested in the dedicated real estate strategy. The fund initially invested in direct real estate in 2011 and targets up to 5% of the total portfolio to the asset class.
TIAA-CREF has $502 billion in assets under management, including $19 billion in direct real estate investments.
