Weekly Real Estate News
Tishman Speyer and Dutch investment manager Bouwinvest Real Estate Investors have formed a new partnership to acquire and reposition office properties across the United States, making the Chrysler Building in Manhattan the vehicle’s first investment.
The companies announced the separately managed account on October 22, describing a strategy focused on institutional-quality office properties in markets with resilient demand, strong underlying fundamentals and limited new construction. The investment mandate will pursue both core-plus properties and buildings that could gain value through renovation or repositioning.
What the $1.5 billion figure means
The new Bouwinvest-Tishman Speyer account joins a broader group of Tishman Speyer-managed U.S. office investment strategies. That broader group has approximately $700 million in available equity capital, representing about $1.5 billion in purchasing power, according to the companies.
Those figures are not a newly announced $1.5 billion capital commitment solely to the Bouwinvest partnership. The firms have not disclosed the account’s individual committed capital or a target number of acquisitions.
Chrysler Building becomes first investment
The account’s initial investment is in the 150-year ground lease for New York City’s Chrysler Building, a transaction Tishman Speyer and institutional partners finalized earlier in October. The historic 77-story, approximately 1.3 million-square-foot tower is expected to undergo extensive improvements and a hospitality-oriented repositioning.
The October 7 transaction announcement said the lease arrangement includes a $235 million investment alongside ground-lease payments to The Cooper Union, which owns the land beneath the building. PSP Investments is among the institutional investors participating in the transaction.
That ground-lease transaction predates the October 22 announcement of the investment mandate; the new development is the formal launch of the partnership’s broader U.S. office strategy.
Investors see opportunity in selective office acquisitions
The companies identified New York, Boston, Chicago and San Francisco among the gateway markets they intend to consider, along with established U.S. growth markets. Their focus is on properties with durable tenant demand and opportunities to improve the buildings’ competitiveness.
Robert Wagenaar, Bouwinvest’s director of North American investments, said the company sees a tactical opportunity in U.S. offices and is emphasizing strong locations and environmentally focused repositioning. Tishman Speyer senior managing director Nate Shanok said the partners are seeking well-located buildings where limited new supply could support long-term demand.
The investment initiative suggests that some institutions see opportunities after years of weakness in parts of the office market. It should not be interpreted as evidence of a broad national office recovery: leasing, valuations, vacancy and financing conditions still vary sharply by property and market.
The mandate expands an existing relationship between the companies. Bouwinvest also participated in the initial closing of Tishman Speyer’s Korea Living Venture, a separate investment program targeting residential and accommodation assets in Seoul.
Primary sources: Bouwinvest and Tishman Speyer, October 22 announcement; PSP Investments, October 7 Chrysler Building transaction announcement.
