Swiss AFIAA Foundation acquires office building in Manhattan, New York, for $150 mln
Swiss AFIAA Foundation for International Real Estate Investments has expanded its portfolio in North America. The company acquired a Class A office building in the New York City borough of Manhattan for roughly USD 150 million as part of an asset deal from the real estate investment and management firm Normandy Real Estate Partners, which is based in Morristown, New Jersey.
Dino Christoforakis, Head of Transactions, North America from AFIAA in New York: “The current acquisition marks the first time in about eight years that we are investing in the New York real estate market again. In our view, the office market currently provides good investment opportunities. We are also seeing further potential for rent increases in Midtown South Manhattan in particular.” This is confirmed by a recent analysis of the New York office property market conducted by international broker company JLL. According to this analysis, the top rents have further increased over the past months. The greatest increase was recorded in the submarket of “Midtown South Manhattan,” where premium rent increased by roughly 5.3% within one year. Christoforakis adds: “I would like to take this opportunity to thank Normandy Real Estate Partners for their professional and pleasant cooperation.”
The twelve-story property is located at 119–125 West 25th Street in Chelsea neighborhood of Manhattan, near the Empire State Building and Madison Square Garden. The unique brickwork building was constructed in 1906 and fully renovated this year. It provides a rental space of roughly 138,000 square feet, 89% of which are office and 11% are retail space. The main tenant is fitness equipment manufacturer Peloton Interactive LLC. The acquired property will be incorporated into the worldwide active “AFIAA Global” fund that owns further real estate in the US cities of Austin, Chicago, Philadelphia and Washington, D.C. These properties are managed centrally from AFIAA’s office in New York. The AFIAA Global fund currently has real estate assets totalling around CHF 1.5 billion. Around 46% of the portfolio is in Europe, with 30% of the properties in North America and the remaining 24% in Australia.
AFIAA is an investment foundation under Swiss law that invests exclusively in first-class foreign real estate assets. A total of 45 Swiss pension funds are currently invested. AFIAA Foundation intends to continue on its growth path over the coming years. Its current “2016+” strategy is aimed at further portfolio growth: “We are looking to expand our portfolio to up to CHF 3 billion by the year 2021 taking yield and diversification aspects into account and concentrating on core-plus investment properties in prime locations in Europe, North America and Australia,” explains AFIAA CEO Dr. Stephan Kloess, adding: “Properties with a need for refurbishment or vacancy are also interesting for us. Our active asset management allows us to leverage this potential in order to secure or increase our long-term yields.”