Korean hedge fund house co-invests in $40 mn Florida building purchase

South Korea’s small hedge fund company Anda Asset Management Co. Ltd. has invested $8 million in a $40 million joint acquisition of a four-story office building in Florida, aiming to refurbish the 30-year-old property before putting it on the market after five years.

Anda Asset, with 1.3 trillion won ($1.1 billion) of AUM at end-June, targets about a 12% return per annum from the investment, including expected capital gains from a future sale, according to investment banking sources on August 20.

Other investors, including Florida-based Morning Calm Management, chipped in $6 million to buy 301 Yamato in Boca Raton, Florida, from Stoltz Cos., a US real estate investment firm.

The rest of the cost, or $26 million, was borrowed from local financial institutions.

Anda Asset, with 33.8 billion won in equity capital, used its own capital for the purchase.

The 19,226-square-meter building, completed in 1987, is currently 75% leased.

It is located in Boca Raton’s resort village and close to airports, including West Palm Beach International Airport and Miami International Airport.

From the transaction, Florida-based Stoltz Cos. earned almost twice as much as its initial investment of $21.3 million after it bought the property from an individual investor in 1987.

In December 2016, Anda Asset participated in the $50 million joint acquisition by Morning Calm of Capital Office Park in the suburb of Washington D.C.

They intended to upgrade the building and resell after four to five years, targeting annual returns of more than 20%.

The 74,314-square-meter property consists of six 10-story buildings. It was 40% vacant at the time of the transaction.

Anda Asset had used its own capital for the past three US property investments since its establishment in 2011. Now it plans to launch real estate funds to attract domestic institutional investors to chase large-scale property deals.

By Daehun Kim

daepun@hankyung.com