Australian ING Office Fund has acquired a 49% interest in 900 Third Avenue, a 36-floor Manhattan office tower. For $163 million, ING acquired the stake, which also gives it a 50% voting interest in the property. The building is now 88% occupied, with a net rentable area of 585 million sq. ft..
The remainder of the building is owned by Paramount Group. ING will fund the acquisition through a placement of 50 million ING Office shares priced at $1.12 (Australian), raising $56 million (Australian) through Merrill Lynch and UBS. The remainder comes out of fully hedged debt.
"This is an ideal asset for the Fund’s first major U.S. acquisition in one of the largest and deepest office markets in the world. The key strengths of the asset, its location, long average lease term, solid covenants and ability to produce growth to earnings in the short to long term match the Fund’s strategy perfectly," says Tino Tanfara, CEO of the ING Office Fund.