Singapore’s GIC Buys Deutsche Bank NYC Headquarters for $1.04 Bil

GIC has agreed to purchase a 95 percent stake in a New York office building for $1.04 billion, according to a statement this week by the Singaporean sovereign wealth fund.

The Southeast Asian mega-investor acquired 60 Wall Street from New York’s Paramount Group, which will retain a five percent stake in the asset and continue to manage the 47-storey LEED Silver office tower.

The Manhattan deal is the second billion dollar US real estate investment for GIC within the last year and follows soon after two major New York acquisitions by Chinese sovereign wealth fund CIC.

Seller Gets Back Most of Its 2007 Purchase Price

“This investment reflects our long-term confidence in Downtown Manhattan which is benefitting from over $30B of recent public and private investments in infrastructure and new construction,” said Adam Gallistel, Regional Head of Americas for GIC in a statement. “We believe 60 Wall Street is one of the top buildings in Downtown and is poised to benefit from the ongoing downtown renaissance.”

GIC’s new 1.6 million square foot (149,000 square metre) asset is 100 percent leased to Deutsche Bank, which makes its US headquarters in the circa 1989 structure. The transaction, which involved the newly formed joint venture arranging $575 million in financing for the purchase, values the 745 foot tall tower at $1.04 billion, or $640 per square foot.

Paramount acquired 60 Wall Street from Deutsche Bank in 2007 for $1.18 billion under a sale and lease-back agreement that broke records for an office property in lower Manhattan in terms of both total value and price per square foot.

“We believe GIC’s commitment to 60 Wall Street is reflective of its confidence in Paramount’s management team and the strength of the New York City real estate market,” said Paramount’s chairman and CEO Albert Behler in a statement.

GIC Spending Billions on Real Estate Globally

For GIC, which has over $100 billion in assets under management worldwide, the New York deal follows seven months after the Singaporean fund paid $2 billion for a 71 percent stake in Denver-based trailer park operator Yes! Communities.

With real estate among its preferred asset classes, GIC earlier this month closed on its €2.4 billion ($2.7 million) acquisition of P3, a specialist owner, developer and manager of European logistics properties. Also within the last month the sovereign wealth fund made its fourth European real estate investment in the past four months – snatching up a 50 percent stake in a new shopping mall in the UK for 48.5 million pounds ($60 million).

Like its Singaporean counterpart, China’s sovereign wealth fund, CIC, has lately turned its focus to New York assets. Late last year the Beijng-based fund purchased a 45 percent stake in a building in New York’s Rockefeller Centre for $1.03 billion. That Manhattan deal came after CIC paid $683.5 million to purchase a 49 percent stake in the 50-storey 1 New York Plaza from Brookfield Property Partners in May.