MetLife, Inc.with Met Institutional Asset Management, MetLife Investment Management (MIM), recently partnered with Norges Bank Investment Management (NBIM) to acquire the One Memorial Drive office building in Massachusetts.
The $ 825.1 million deal includes the acquisition of MIM and NBIM office properties from Oxford Properties Group and a fund advised by JP Morgan Global Alternatives.
The recent move is in line with MIM’s vigorous efforts to invest in high quality commercial real estate assets located in strategic regions and markets. The acquired property fits well as it is located in a city where the demand for office space significantly exceeds supply and is full of reliable tenants in the field of technology and life sciences. The acquisition of One Memorial Drive will be a significant addition to the company’s portfolio. According to CoStar, the latest deal marks the largest U.S. office deal this year.
Such moves by the subsidiary will strengthen MetLife’s presence in the commercial real estate market. In addition, the company will be able to create long-term value for its clients in the real estate industry. NBIM, Norges Bank’s asset management subsidiary, appears to be the right partner for MIM in this endeavor – a record deal in the US commercial real estate industry. Both MIM and NBIM have joined forces for nearly a decade with the sole purpose of investing in Class A office properties in significant US markets.
It is worth noting that, despite some of the instability associated with the COVID-19 pandemic, MIM has left no stone unturned by investing in the ransom. Since the beginning of 2020, the company has invested $ 4.5 billion in acquisitions, including the most recent one. As of June 30, 2021, the total value of commercial real estate assets under MIM management reached 106.6 billion US dollars.
The company continues to look for opportunities in the commercial real estate sector, which seems like the right time. The pandemic has darkened the prospects for commercial real estate as most offices have been forced to allow employees to work remotely amid stringent travel bans and travel restrictions across the world. This affected the demand for commercial real estate, as most companies were looking for shorter leases and fewer office space. As a result, the volume of investments in commercial real estate began to decline.
However, a recent report from CBRE Research has given real estate investors a ray of hope. According to the aforementioned report, the real estate industry is likely to recover in the near future, although it is unlikely to reach the 2019 level. Factors such as the accelerated global economic recovery, coupled with record low interest rates, are likely to support the recovery of the real estate market and increased investment in the coming days.
Zacks rating and price
MetLife, rated # 2 (Buy) in Zacks, is up 56.8% year-over-year from industryAn increase of 35.1%.
Image source: Zacks Investment research
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The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Nasdaq, Inc.