CANADA - The Canada Pension Plan Investment Board (CPPIB) has bought a minority stake in the 50-storey McGraw-Hill building in the heart of Manhattan for US$576m, including debt and working capital.
The investment gives the pension fund manager a 45% stake in the skyscraper on 1221 Avenue of the Americas that is part of the Rockefeller Centre complex.
The stake was previously owned by SL Green Realty Corp.
CPPIB also formed a joint venture with SL Green to buy a 45% stake in 600 Lexington Avenue for around US$87m. SL Green will manage the building.
The investments, which CPPIB said have a combined value of more than US$1.45bn, represent the firm's first foray into Manhattan real estate, which has had a difficult few years.
The firm said it was an "attractive time" to enter the market.
Real estate and increasingly infrastructure have proved popular investment choices in Canada lately as they are viewed as a reliable source of long-term income.
Last March, CPPIB said it would raise C$5bn (US$4.88bn) in the debt markets over a two-year period to help it fund illiquid investments.
Since then, it has bought Australia's Macquarie Communications Infrastructure Group in a deal worth C$1.16bn and the Silverburn shopping centre in Glasgow, one of Scotland's largest retail outlets, for £300m (US$448.9m). (Global Pensions, March 31, 2009)
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