Institutional Capital Finds Its Way Back to Manhattan Offices

The world’s largest sovereign wealth fund, Norway’s, is back in the CRE game. The fund plowed $543 million into a Manhattan office tower, taking a 95 percent stake in a building on Avenue of the Americas. This move signals renewed confidence in prime office assets, as institutional investors creep back into markets they had mostly abandoned in recent years.

Sovereign wealth funds have trimmed their exposure to real estate in recent years, shifting toward infrastructure and alternatives, as declining valuations, rising interest rates, and mounting remote-work uncertainty weighed on fundamentals. But now, as brokers report rebounds in leasing activity and a shortage of well-located assets, these funds are reasserting themselves. Norway’s reinvestment reflects a broader recalibration: exposure that once dwindled is now being rebalanced as opportunity replaces hesitation...

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RSK: It is a good sign when investors start buying office properties, even if it is the prime downtown buildings. Hopefully the trickle-down effect will happen.