Foreign investor acquires Times Square Tower in New York

On Behalf of | Sep 11, 2013 | Commercial Real Estate

Foreign investors are dipping their toes into the New York commercial real estate market and some companies are investing a large amount of money for their first time in the United States. Such is the case for a Norwegian wealth fund who recently acquired a 45 percent interest in Times Square Tower in New York for $684 million in cash.

The acquisition was signed on September 6, according to reports. The agreement said the entire Times Square Tower is valued at $1.52 billion. While the Norwegian Government Pension Fund Global has acquired 45 percent interest in the building, Boston Properties will still manage and take care of lease responsibilities for the building.

Times Square Tower was developed by Boston Properties and is currently 99 percent leased. The building has over one million square feet, and has a ground lease with the City of New York for 76 more years.

One reason why the foreign investors may have been so interested in acquiring Times Square Tower is because the property is in a payment instead of taxes program until June 2024. Once the program is up, the joint venture is able to purchase the fee interest from the property in July 2024.

This is not the first acquisition for the Norwegian wealth fund. Earlier in 2013, the wealth fund acquired almost 50 percent interest in a real estate portfolio worth $1.2 billion from properties located in New York, Boston and Washington D.C.

Foreign investors are expected to have an increased presence in the commercial real estate market in New York, which could mean demand and prices will increase in the future. Commercial real estate opportunities can be complex and difficult, especially for first-time investors. Investors interested in purchasing, selling or acquiring property in New York should contact a real estate attorney to discuss their specific needs.

Source: Commercial Observer, “Norway’s Wealth Fund to Acquire Stake in Times Square Tower for $684M,” Gus Delaporte, Sept. 9, 2013