Dutch pension fund Bouwinvest Real Estate Investors and global developer Tishman Speyer have launched a separately managed account to source and acquire leading office assets across the United States, a move that reflects the Dutch firm’s growing confidence in both the U.S. market and the office sector.
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The vehicle's first investment is the 150-year ground lease for the Chrysler Building, one of New York City’s most iconic skyscrapers. Tishman Speyer finalized an agreement to buy the lease earlier this month together with the Public Sector Pension Investment Board and other institutional investors.
The Chrysler deal includes a $235M investment and ground lease payments to Cooper Union, the college that owns the land that the 77-story tower sits on. The $351M ground lease expires in 2176. Tishman Speyer plans a major upgrade of the 1.3M SF building, adding hotel-style services and modern workspace to turn the landmark into a “distinctive” office building.
The Bouwinvest account will invest in institutional-quality office buildings in key U.S. markets that showcase solid underlying performance, strong market conditions and a constrained pipeline, the companies said.
Its focus is on acquiring properties that need renovation or repositioning to increase their value, and it may buy assets alongside other Tishman Speyer office funds or outside partners.
The account sits alongside a Tishman Speyer club dedicated to office investment strategies in the United States. The club has about $700M in equity ready to deploy, enough to fund roughly $1.5B in acquisitions once debt is included, according to a press release.
In addition to looking for deals in the usual major hubs such as New York, Boston, Chicago and San Francisco, Tishman and its partners will also invest in established fast-growing U.S. cities. It bought its first building in Austin in 2021.
The launch comes a few weeks after Bouwinvest opened its international business to external clients. The Amsterdam-based investment manager, which functions as the real estate investment arm of pension fund bpfBOUW, oversees €18.5B ($21B) in assets, investing directly in Dutch real estate and indirectly in markets worldwide.
Until early September, Bouwinvest’s activity abroad was solely for bpfBOUW. Other institutional investors can now access its international platform, which represents €10.5B in investment exposure.
“The Chrysler Building is a fitting first investment for this mandate and shows how we invest internationally: selectively, early in the cycle and through specialist partners like Tishman Speyer," Robert Wagenaar, Bouwinvest’s director of North American investments, said in a statement.
"We now see a compelling tactical opportunity in the U.S. office market to invest with a strong locational focus and brown-to-green angle."
The timing of the launch also reflects Bouwinvest's view that the global repricing of real estate is creating buying opportunities. Jasper Petit, managing director of international investments, said in September that he foresees the start of a new cycle, making now an “excellent moment” to invest.
The new partnership is not the first time Bouwinvest has invested in Tishman Speyer-led projects. In 2018, Bouwinvest, as one of more than a dozen equity investors, invested $100M in The Spiral, the Hudson Yards office tower now home to Pfizer’s headquarters, as part of its strategy to bolster its assets in North America by one-third.
That building was refinanced last year for nearly $2.9B in a deal that allowed Tishman Speyer and its partners to pocket nearly $1B in equity.
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