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MetLife Sells Stake in Office Portfolio to Monetize Real Estate Value

Insurer Forms JV with NY State Common Retirement Fund
January 20, 2016
MetLife Inc. has formed a real estate investment venture with New York State Common Retirement Fund, selling a 49.9% stake in the portfolio to the the third largest public pension fund in the U.S.

The venture’s initial investment portfolio, which will be managed by MetLife Investment Management (MIM), comprises seven properties valued at more than $1.4 billion. The properties total approximately 3.7 million square feet of primarily office space and are located in major U.S. markets.

MetLife declined to identify the properties but said it will continue as the majority owner of the portfolio and administrator of the venture.

MIM is the company’s institutional client investment business. Now in its fourth year of operation, MIM currently has approximately $20 billion of total commitments from unaffiliated third-party investors across various asset classes including real estate equity, real estate debt and private placements.

MetLife has been on a recent roll recapitalizing and cashing out on some of its office assets. It recently took out a $144.4 million mortgage on the 47-story Wells Fargo Center in downtown Miami. Bank of America was the lender.

Metlife also sold the 787,042-square-foot Bank of America Plaza, the tallest building in Tampa, for $193.5 million. A joint venture between Miami-based Banyan Street Capital and Los Angeles-based Oaktree Capital Management acquired the 176-foot, 42-story landmark office building on Kennedy Boulevard.

CBRE Capital Markets arranged a $136.5 million loan from Wells Fargo to fund Oak Street Real Estate Capital’s acquisition of five MetLife owned and occupied office buildings totaling 1.3 million square feet. The properties included: 501 U.S. Highway 22 in Bridgewater, NJ; 344 Madison Ave. in Morristown, NJ; 5950 Airport Road in Oriskany, NY; 9797 Springboro Pike in Dayton, Ohio; and 700 Quaker Lane in Warwick, RI.

The insurance giant signed a 12-year triple net lease at the office properties, according to a report in The Commercial Observer.

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