Silverstein, CalSTRS Sell 1177 Sixth Avenue for $571M

9 minutes read

Labor Day proved to be a relaxing holiday for Norges Bank Investment Management after it pushed the acquisition of a Midtown Manhattan property over the finish line.

Norges and Beacon Capital Partners teamed up to acquire 1177 Sixth Avenue for $571 million, the bank announced early Tuesday. The sellers were Silverstein Properties and the California State Teachers’ Retirement System.

Norges is taking a 95 percent ownership interest, while Beacon is picking up the remaining stake. Beacon will also assume the property’s management duties, according to the Commercial Observer. Sources told the outlet the deal was all-cash.

The deal for the 47-story, 1 million-square-foot office building breaks down to $571 per square foot. Incoming ownership is expected to maintain the property as an office building.

An Eastdil Secured team including Gary Phillips, Will Silverman and Sarah Lagosh negotiated the deal. The deal is expected to close in the coming weeks.

Norges and Silverstein did not immediately respond to separate requests for comment from The Real Deal.

Silverstein acquired the property in 2007. Silverstein and CalSTRS bought out UBS at an $860 million valuation in 2021, which looks lofty compared to the agreed sale price. Ownership landed a $450 million refinancing from DBR Investments Co. — a Deutsche Bank affiliate — and Wells Fargo in 2021.

Tenants at the building include law firm Kramer Levin, private equity firm Mill Point Capital and nonprofit Practising Law Institute. In May, global insurance and investment firm Starr agreed to take 49,000 square feet at a space with an asking rent in the $80s per square foot.

In April, Silverstein withdrew an application for a $3.7 billion loan to develop 2 World Trade Center, no longer looking to pull from a federal program designed to finance rail infrastructure improvements.

Meanwhile, Norges — a sovereign wealth fund for Norway’s government pensioners — started this year by paying $1.07 billion for a 45 percent stake in 48 warehouses from Southern California to New Jersey and Pennsylvania.