May 10, 2010
Acquires 45% Ownership Stake in 1221 Avenue of the Americas Formation of Joint Venture to Acquire a 45% Stake in 600 Lexington Avenue
Toronto, ON (May 10, 2010) – The CPP Investment Board (CPPIB) announced today its first real estate investments in Manhattan with the acquisition of ownership stakes in two prime commercial office properties. CPPIB has agreed to acquire a 45% ownership interest in 1221 Avenue of the Americas from SL Green Realty Corp. for a total consideration of approximately US$576 million including debt and working capital. In addition, CPPIB has formed a joint venture with SL Green to acquire a 45% ownership stake in 600 Lexington Avenue for a total consideration of approximately US$87 million. In total, these properties have a combined value of over US$1.45 billion representing a gross consideration of approximately US$663 million. Peter Ballon, CPPIB’s Vice-President and Head of Real Estate Investments – Americas, said, “We are pleased to enter the Manhattan office market with the acquisition of interests in two premier Class A office properties. We believe it is an attractive time to enter the New York market. These transactions reflect CPPIB’s growing reputation as a major global real estate investor with the capital, and more importantly, the internal capabilities to directly participate in large complex transactions such as these.” Mr. Ballon added, “With SL Green, we are investing alongside the largest office landlord in Manhattan with a proven investment track record and top tier operating platform. We look forward to building this partnership as we continue to explore new opportunities in Manhattan.” 1221 Avenue of the Americas, also known as The McGraw-Hill building, is an approximately 2.5 million square foot, 50 storey class “A” office building located in the heart of one of Midtown Manhattan’s premier office districts. 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% ownership interest in 1221 Avenue of the Americas and will continue to manage and lease the property. 600 Lexington Avenue, which will be managed and leased by SL Green, is a 300,000 square foot, 36-story, glass and steel Class “A” boutique office building situated on the Northwest corner of Lexington Avenue and 52nd Street. The property is uniquely positioned to attract smaller tenants seeking space identity in a prime Midtown location. The property is currently over 90% leased. CPPIB invests in commercial properties primarily through joint ventures with operating partners.
At December 31, 2009, its global real estate portfolio had an equity value of C$7.1 billion and consists of mostly office and retail properties located in major centres across Canada, the United Kingdom, the United States, Mexico, Brazil, Continental Europe and in the Asia–Pacific region. For more information about CPPIB’s real estate portfolio, please visit:CPPIB_2009_Annual_Report_OL_English.pdf
Mr. Ballon commented, “We remain focused on our U.S. real estate investment strategy, which is to acquire premier commercial properties in key markets by partnering alongside top tier partners such as SL Green and Rockefeller Group.”
About The CPP Investment Board The CPP Investment Board is a professional investment management organization that invests the funds not needed by the Canada Pension Plan to pay current benefits on behalf of 17 million Canadian contributors and beneficiaries. In order to build a diversified portfolio of CPP assets, the CPP Investment Board invests in public equities, private equities, real estate, inflation-linked bonds, infrastructure and fixed income instruments. Headquartered in Toronto, with offices in London and Hong Kong, the CPP Investment Board is governed and managed independently of the Canada Pension Plan and at arm’s length from governments. At December 31, 2009, the CPP Fund totaled C$123.9 billion. For more information about the CPP Investment Board, please visit www.cppib.ca.
For further information contact:
For more information:
Linda Sims
Director, Media Relations
(416) 868-8695