MetLife, Norges Bank Buy One Beacon St. Tower in Boston for $561M

In its fourth major acquisition in just eight months, a JV between MetLife Inc. and Norges Bank Investment Management has bought One Beacon St., a 34-story, Class A office tower in downtown Boston’s financial district.

METLIFEIn its fourth major acquisition in just eight months, a joint venture between MetLife Inc. and Norges Bank Investment Management has bought for about $561 million One Beacon St., a 34-story, Class A office tower in downtown Boston’s financial district, MetLife announced yesterday.

The acquisition closed earlier this month, a MetLife spokesperson told Commercial Property Executive.

The seller was a JV of Beacon Capital Partners and Allianz. MetLife will own 52.5 percent of One Beacon St. and be the managing member, while Norges will own the remaining 47.5 percent.

The purchase was made entirely from the resources of the two companies, the MetLife spokesperson said. MetLife had held the existing debt on the property and now has taken it over.

With assets totaling an estimated $878 billion, Norges is the world’s largest sovereign wealth fund, according to the Sovereign Wealth Fund Institute. It’s about $100 billion bigger than the next-largest such fund, the Abu Dhabi Investment Authority.

One Beacon St. has more than 1 million square feet of office space and is LEED Platinum certified. Built in 1973, it’s currently about 85 percent leased, to tenants including the Massachusetts Housing Finance Agency, the University of Massachusetts, the University of Massachusetts Building Authority, Standard Life Investments (USA) Ltd. and JPMorgan Chase Bank N.A.

This is the fourth purchase for the MetLife-Norges JV, which now has a CRE portfolio with a gross value of about $2.4 billion. The three other properties are One Financial Center in Boston, purchased last December, and District Center (formerly the Thurman Arnold Building) in Washington, D.C., and 425 Market Street in San Francisco, both purchased in January.

The metro Boston office market can expect rising employment numbers this year (particularly in the technology, biotechnology and pharmaceutical industries), along with more new construction, though not enough to keep vacancy from falling 90 basis points, to 14.2 percent, according to a report from Marcus & Millichap. Vacancy has been falling steadily since 2010. Rents are expected to rise 3.4 percent, compared with 11.1 percent last year.