Investors - FEBRUARY 7, 2014

MetLife begins new year with a splash

by Reg Clodfelter

MetLife Real Estate Investors has hit the ground running in 2014, using a handful of joint ventures to put together more than 4 million square feet in acquisitions in January — a total that could make any investor blush.

“We are certainly off to a strong start in 2014 with our real estate activity, including our partnerships with SunTrust Bank, Norges Bank and others,” says Robert Merck, senior managing director and global head of real estate for MetLife. “We think that the Tier I markets will continue to offer opportunities in the near-term future for high-quality properties.”

MetLife’s joint venture with Norges Bank Investment Management, which manages the Norwegian Government Pension Fund Global, one of the world’s largest sovereign wealth funds, acquired major office properties in Washington, D.C., and San Francisco for an undisclosed amount.

In San Francisco, NBIM purchased a 47.5 percent stake in 425 Market St., a 945,000-square-foot office building in the city’s South Financial District, from MetLife, which retained a 52.5 percent interest in the property.

The Washington, D.C., property, located at 555 12th St. NW, is a 12-story, 782,000-square-foot free-standing office building. The property is LEED Gold certified and already 85 percent leased.

These two properties, combined with the joint venture’s acquisition of One Financial Center in Boston last December, bring the venture’s gross asset value to approximately $1.7 billion.

But the fun did not stop there. In a joint venture with Sunset Development Co., MetLife expanded its San Francisco Bay Area holdings with the acquisition of the AT&T campus in the suburb of San Ramon, Calif. Located at 2600 Camino Ramon, the 2 million-square-foot property is Sunset Development’s first purchase of an existing asset and first equity partnership. MetLife holds a 49 percent stake in the property.

MetLife was also active in the apartment sector in January, purchasing Elle Atlanta, a 345,000-square-foot multifamily property, for approximately $106.5 million from a joint venture between USAA Real Estate and JLB Partners. Located at 235 Pharr Road in Atlanta, the property is a five-floor, 373-unit building.

These acquisitions come on the heels of MetLife’s December acquisition of a 25 percent interest in four hotels from Tishman Speyer: the Westin New York Grand Central in New York City, the Sheraton Chicago Hotel & Towers, and the Swan and Dolphin resorts at Walt Disney World in Orlando.

Despite the fast start to the year, this looks to just be a sign of things to come for MetLife’s 2014 investment campaign. In addition to the ongoing joint venture with NBIM, MetLife entered into a three-year partnership with SunTrust Banks last August to invest up to $5 billion in commercial real estate. The partnership is expected to be active in 2014. In addition, MetLife is marketing its open-end core fund, MetLife Core Property Fund, which had a $1.4 billion close in December 2013, according to a filing with the SEC.


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