A number of US pension funds, including the State of Wisconsin Investment Board (SWIB), are co-investing alongside a Blackstone fund to buy a $4bn (€3.66bn) New York office portfolio.
The investors, which also include the Virginia Retirement System, are all in Blackstone Highline Property Co-Investment Partners, a fund set up specifically to co-invest in a portfolio being partially sold by RXR Realty, according to industry sources.
SWIB and Virginia Retirement System have committed $100m and $110m, respectively, to the co-investment vehicle.
The pension funds are co-investing alongside Blackstone Property Partners, Blackstone’s recently launched core-plus real estate fund, which itself includes a number of US pension plans, including the California State Teachers’ Retirement System (CalSTRS).
The six office properties, known as the ‘Highline’ portfolio, include the Starrett-Lehigh Building in the West Chelsea area of Manhattan.
RXR Realty, which is selling an approximately 50% stake in the 5.3m sqft portfolio, will continue to manage the buildings.
The assets are approximately 90% occupied with some tenants on below-market leases, according to sources.
Blackstone, traditionally known as an opportunistic investor, has accumulated a portfolio of core-plus assets around the world since the beginning of 2014.
Two other deals under contract for its core-plus strategy are Times Square in London and Liberty Place in Australia.