MetLife, Inc. (MET) is planning to invest in the U.S. commercial real estate market through its joint venture (:JV) with Norges Bank Investment Management (:NBIM), a part of Norges Bank, the central Bank of Norway.
As per the JV agreement, MetLife and its affiliates along with NBIM will be investing in Class A properties in key U.S. markets. Under the agreement, the combined entity has already made its first investment in One Financial Center in Boston.
One Financial Center satisfies the criteria of being a Class A office building and has 46 stories and an area of 1.3 million square feet. While NBIM has a 47.5% share in the asset, MetLife increased its share by 2.5 percentage points.
MetLife had around $55.1 billion in real estate invested assets as of Dec 31, 2012 and boasts of an experience of 100 years in the real estate investment market. Through the above JV agreement, the company intends to nurture its strategy of providing reliable investment options to its affiliates.
NBIM invests in equity, fixed-income and real estate markets. The entity held assets worth $810 billion as of Sep 30, 2013. We believe partnering with an entity of that size gives MetLife a competitive advantage over other players in the industry.
However, this is not the first time that MetLife has entered into an agreement with a bank to boost its presence in the real estate market. Previously, in Aug 2013, MetLife entered into a three-year commercial real estate deal with SunTrust Banks, Inc. (STI), pursuant to which SunTrust is slated to fund the commercial real estate mortgages originated and managed by MetLife Real Estate Investors.
MetLife currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the insurance sector include Kemper Corp. (KMPR) and Prudential plc (PUK). Both stocks carry a Zacks Rank #1 (Strong Buy).