The Canada Pension Plan Investment Board (CPPIB) has taken a large minority stake in two prime office properties in Washington, D.C. The transaction gives the CPPIB a 45% interest in the properties and puts the board in a joint venture with Vornado Realty Trust.

It is the CPPIB’s first foray into real estate in the central business district of Washington, D.C.

The board has invested US$91 million and assumed 45% of the existing mortgage debt secured by the properties. The assets—1299 Pennsylvania Avenue (the Warner Building) and 1101 17th Street NW—have a “total implied value” of US$526 million.

“With this transaction, we continue CPPIB’s ongoing investment strategy to acquire top-quality real estate properties in key U.S. markets,” said Peter Ballon, CPPIB’s vice-president and head of real estate investments for the Americas. “We look forward to building this partnership as we continue to explore new opportunities in Washington and other cities.”