Real Estate News, Realty Guide

The Canada Pension Plan Investment Board (CPPIB) said on Monday that it has bought into the coveted Manhattan real estate market for the first time, taking stakes in skyscrapers valued at more than $1.45 billion.

The CPPIB’s real estate arm bought a 45 percent stake in 1221 Avenue of the Americas, the McGraw-Hill building, from SL Green Realty Corp (SLG.N) for $576 million.

It also formed a joint venture with SL Green, which owns and manages Manhattan properties, to acquire a 45 percent stake in 600 Lexington Avenue for $87 million.

CPPIB, which invests funds from the Canada Pension Plan, to which almost all working Canadians contribute, was one of the world’s top private equity buyers last year.

“These are two great assets in a market that’s coming back,” Graeme Eadie, CPPIB’s senior vice-president for real estate investments, said in an interview.

“These are our first investments in the Manhattan market, and it’s an area that we think has future growth for us.”

The CPPIB was involved in three of the top five global private equity deals of 2009, including the largest leveraged buyout of the year — the $4 billion acquisition by CPPIB and U.S. private equity firm TPG [TPG.UL] of IMS Health Inc RX.N, a prescription drug sales data provider.

With deep pools of capital and long-term investment outlooks, Canadian pension funds are a new breed of financial investor, able to easily outmuscle buyout firms.

Â