The Federal Reserve Bank of New York bought 33 Maiden Lane, a 600,000-sq.-ft. office building in New York City, from Merit US Real Estate Fund III L.P. for $207.5 million. The buyer established a wholly-owned limited company, Maiden & Nassau LLC, to serve as the building’s owner.

The New York Fed has been leasing offices at 33 Maiden Lane since 1998. It currently houses 1,100 bank staff and occupies 75 percent of the space in the building. The purchase was a cheaper alternative to leasing the space on a long-term basis, and should allow the organization greater control over maintenance, operation and security of the building.

“The purchase is a cost-effective way to meet our business needs and will enable us to more easily ensure appropriate security four our operations,” said New York Fed President William C. Dudley in a statement. “We are also pleased to contribute, through our investment, to the ongoing revitalization of Lower Manhattan.”

Darcy Stacom, William Shanahan and Paul Gillen, of CBRE, represented the seller in the transaction. Merit US Real Estate Fund II is a closed-end German fund managed by Invesco Real Estate in cooperation with Hannover Leasing.