CPPIB Breaks Into Manhattan Market

The CPP Investment Board (CPPIB) has made its entry into Manhattan’s real estate market by acquiring ownership stakes in two prime commercial office properties. CPPIB has agreed to acquire a 45 percent ownership interest in 1221 Avenue of the Americas from SL Green Realty Corp. for approximately $576 million, and has formed a joint venture with SL Green to acquire a 45 percent ownership stake in 600 Lexington Avenue for approximately $87 million.

Peter Ballon, CCPIB’s vice president and head of real estate investments, said his company was pleased to enter the Manhattan office market by acquiring interests in two premier Class A office properties. “These transactions reflect CPPIB’s growing reputation as a major global real estate investor and, more importantly, the internal capabilities to directly participate in large, complex transactions such as these.” With SL Green, CCPIB is “investing alongside the largest office landlord in Manhattan,” he continued.

1221 Avenue of the Americas, also known as The McGraw-Hill building, is approximately 2.5 million square feet with 50 stories. The property was completed in 1972 and is part of the larger Rockefeller Center complex. The property’s original developer, Rockefeller Group International, Inc., will retain the remaining 55 percent ownership interest and will continue to manage and lease the property.

600 Lexington Avenue, which will be managed and leased by SL Green, is 300,000 square feet and has 36 stories. The property is currently over 90 percent leased.

CPPIB is headquartered in Toronto, Canada, and has offices in London and Hong Kong.