- Tishman Speyer and Bouwinvest created the Bouwinvest-Tishman Speyer SMA to buy top-tier U.S. office buildings across major markets and cities with a growth reputation.
- The fund supplied part of the cash for Tishman Speyer’s 150-year ground lease on the Chrysler Building, a deal that includes a $235M renovation commitment.
- Bouwinvest calls it an early-cycle bet on office with a brown-to-green angle, but the partners haven’t disclosed fund size or how many properties they will buy.
Tishman Speyer teamed with Bouwinvest to launch a fund that buys top-tier U.S. office buildings, with the Chrysler Building as its first investment, Commercial Observer reported.
Called the Bouwinvest-Tishman Speyer SMA, the vehicle will chase every major U.S. office market plus cities with a growth reputation, according to the partners’ announcement.
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Chrysler Comes First
Earlier this month, the fund supplied part of the cash Tishman Speyer used to secure the Chrysler Building ground lease. Other investors also contributed to the deal. The lease runs for 150 years and includes a $235 million renovation agreement.
CRE Daily covered how Cooper Union finalized the ground lease. The school has owned the land since 1902. Meanwhile, Tishman Speyer plans to reposition the 77-story, 1.3 million-SF tower at 405 Lexington Ave. as a boutique office building.
What the Partners Say
Robert Wagenaar, Bouwinvest’s North American investments chief, said the firm invests selectively and early in the cycle. It does so through specialist partners, according to his statement.
He sees a tactical opportunity in U.S. office real estate. The strategy focuses on location and a brown-to-green approach.
Similarly, Nate Shanok, a senior managing director at Tishman Speyer, outlined the partnership’s goals. The firms are targeting well-located buildings with durable demand and limited new supply. They then plan to reposition those properties for today’s tenants.
What We Don’t Know
Commercial Observer reported that the partners have not disclosed how many buildings they plan to buy. They also have not revealed how much capital they have committed.
In addition, the firms recently launched the Korea Living Venture. This $400 million fund targets multifamily properties in Seoul.
Why It Matters
A European institution and a major real estate sponsor are describing the U.S. office market as being in an early-cycle phase. They are also backing that view with a strategy focused on repositioning properties.
Manhattan has been a bright spot. For example, Manhattan office tower sales surged as leasing hit record levels, CRE Daily reported.
What’s Next
The fund’s size and its next acquisitions remain unknown. However, the Chrysler Building offers an early look at the strategy. The deal points to selective, quality-focused buying in well-located office properties.
