Tishman Speyer, Bouwinvest Launch US Office Investment Platform
The vehicle will target core-plus and value-add office asset opportunities.
Tishman Speyer and Bouwinvest Real Estate Investors have launched an investment vehicle focused on acquiring top-tier U.S. office assets in markets with strong fundamentals, resilient demand and limited new supply. The separately managed account will target core-plus and value-add opportunities with plans to reposition assets for modern office needs.
The vehicle’s first investment is the 150-year ground lease for the Chrysler Building at 405 Lexington Ave. in Manhattan that was finalized earlier this month. The agreement between Tishman Speyer and The Cooper Union for the Advancement of Science and Art, which owns the land beneath the iconic tower, includes a $235 million investment as well as ground-lease payments to Cooper Union. The firm plans to reposition the 1.3 million-square-foot tower, with a partnership that includes PSP Investments, by using 100 percent equity to finance the ground lease and redevelopment.
The Bouwinvest-Tishman Speyer SMA will target institutional quality office buildings in traditional gateway cities such as New York, Boston, Chicago and San Francisco as well as opportunities in established growth markets.
The strategy may also invest alongside other Tishman Speyer-managed office-focused vehicles and mandates, as well as like-minded institutional investors. The SMA joins a Tishman Speyer club focused on U.S. office investment strategies that currently has approximately $700 million of equity capital available, representing roughly $1.5 billion of purchasing power.
Opportunities in U.S. office investments
Robert Wagenaar, Bouwinvest director of North American investments, said in prepared remarks the investment management firm sees a compelling tactical opportunity to invest in the U.S. office market. He called the Chrysler Building a fitting first investment for the SMA mandate and said it shows how the firm invests internationally—selectively, early in the cycle and through specialist partners like Tishman Speyer.
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Wagenaar said Bouwinvest is making its international platform available to a broader group of institutional investors looking for access to opportunities that are difficult to reach on their own. The multi-client real estate investment manager currently serves more than 35 institutional clients including the Dutch construction workers pension fund bpfBOUW, its largest client and a shareholder.
Bouwinvest and Tishman Speyer’s SMA isn’t the only investment vehicle formed recently to target premier U.S. office properties. Last month, RXR launched Gemini Office Venture, a multibillion-dollar investment platform targeting high-quality New York City office assets. As of September, Gemini had made commitments totaling more than $3.5 billion in transaction value. The investment venture is seeded with RXR’s interests in three Class A office towers – 590 Madison Avenue, 1211 Avenue of the Americas and The Starrett Lehigh Building at 601 W. 26th St.
SMA builds on earlier partnership
Bouwinvest and Tishman Speyer have an existing relationship. In June, Bouwinvest was one of two European pension funds that provided $300 million in third-party equity commitments to Tishman Speyer’s Korea Living Venture, a new approximately $400 million fund focused on acquiring, repositioning and developing multifamily and accommodation properties throughout Seoul. KLV will target assets near major transportation hubs with access to business districts and university campuses in high-growth neighborhoods.
Earlier this month, Tishman Speyer secured $75 million from an unidentified German pension fund for the venture. The latest investment brings the equity commitments to $395 million as the firm nears its fundraising target. The fund’s equity commitments would support more than $800 million of investment capacity, including anticipated financing.
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