UNITED STATES - Pramerica Real Estate Investors has formed a joint venture with L&L Holding Company to invest in New York City office buildings.

Pramerica is the dominant partner and equity owner but the venture is expected to invest $500m (€340m) over the coming years with a focus specifically on Manhattan office buildings, according to Leonard Kaplan, principal at Pramerica's global merchant banking team.

"We think the Manhattan is one of the strongest office markets in the country," said Kaplan.

"It has a current vacancy in the range of 4-5% and rents have been holding steady. There should be solid rental demand for office space in the region going forward."

This is Pramerica's first New York office buildings joint venture and has been signed to support for its Preco fund series, which is now raising capital for a fourth fund and may attract assets from European institutional investors.

While Praemerica is the major shareholder, both companies must approve each transaction to happen.

L&Lwas formed in 2000 and has worked with institutional investors, to build a Manhattan office portfolio totaling five million square feet of space.

The deal is likely to lead to the purchase of several types of office property, from an A+ building which has significant lease renewals due over the next couple of years to properties in need of upgrading with state of the art facilities.