Norges Bank Investment Management and Beacon Capital Partners have agreed to purchase 1177 Sixth Avenue in Midtown Manhattan for $571 million. The announcement was made by Norges early Tuesday, following the Labor Day holiday.
The transaction involves Norges taking a 95 percent ownership interest in the property, while Beacon will hold the remaining stake and assume management responsibilities. According to the Commercial Observer, sources indicated that the deal was conducted entirely in cash.
The office building is 47 stories tall and encompasses approximately 1 million square feet, making the sale price about $571 per square foot. The new owners plan to continue operating it as an office building.
The sellers are Silverstein Properties and the California State Teachers’ Retirement System (CalSTRS). Silverstein acquired the property in 2007, and together with CalSTRS, bought out UBS at an $860 million valuation in 2021. This figure is significantly higher than the current sale price. That same year, ownership secured a $450 million refinancing from DBR Investments Co., a Deutsche Bank affiliate, and Wells Fargo.
Eastdil Secured managed negotiations for the deal, with Gary Phillips, Will Silverman, and Sarah Lagosh representing parties involved. The transaction is expected to close within weeks.
Tenants at 1177 Sixth Avenue include law firm Kramer Levin, private equity firm Mill Point Capital, and nonprofit Practising Law Institute. In May, Starr—a global insurance and investment company—signed on for 49,000 square feet at an asking rent reportedly in the $80s per square foot.
Earlier this year, Silverstein withdrew its application for a $3.7 billion loan intended for developing 2 World Trade Center after deciding not to pursue federal rail infrastructure financing.
Norges has been active in U.S. real estate markets recently; earlier this year it paid $1.07 billion for a 45 percent stake in a portfolio of warehouses located across Southern California, New Jersey, and Pennsylvania.
Norges and Silverstein did not immediately respond to requests for comment from The Real Deal.
