Tishman Speyer and Bouwinvest launch U.S. office fund with Chrysler Building as first buy

Tishman Speyer and Bouwinvest Real Estate Investors have formed a joint fund to buy U.S. office properties, with the Chrysler Building as its first investment.

The fund supplied a portion of the cash Tishman Speyer used to acquire a 150-year ground lease on the Chrysler Building earlier this month, alongside other investors. The vehicle, Bouwinvest-Tishman Speyer SMA, will target all the major U.S. office markets plus cities that have established a reputation for growth, according to the joint venture's announcement.

The deal included a $235 million agreement to renovate the tower. An Oct. 8 report by this publication, citing IREI, said the lease and redevelopment were funded entirely with equity.

Robert Wagenaar, Bouwinvest's director of North American investments, said in a statement: “The Chrysler Building is a fitting first investment for this mandate and shows how we invest internationally: selectively, early in the cycle and through specialist partners like Tishman Speyer.” He described “a compelling tactical opportunity in the U.S. office market to invest with a strong locational focus and brown-to-green angle.”

Nate Shanok, a senior managing director at Tishman Speyer, said: “Together, we see attractive opportunities to acquire well-located office assets in markets with durable demand drivers and limited new supply, and reposition them to meet the evolving needs of today's customers.”

The two firms also recently launched the Korea Living Venture, a $400 million fund to acquire, reposition and develop multifamily assets in Seoul.

Manhattan availability fell to a 2020 low in the third quarter and JLL data cited by IREI put vacancy at 12.6 percent. Leasing ran 19.2 percent above its 10-year average, according to this publication's prior reporting, and direct asking rents were $84.56 a square foot.