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Alternative investment

Korea Investment acquires California-based office building worth $86 mn

Oct 05, 2020 (Gmt+09:00)

Korea Investment & Securities Co. has acquired a luxury office building in Orange County, California valued at around 100 billion won ($86 million), according to media reports.

The domestic brokerage firm raised 41.2 billion won from investors, of which 14.6 billion won came from retail investors. Institutional investors including securities firms and hedge funds joined as major investors, the Maeil Business Newspaper reported on Oct. 4.

The office building boasts a floor area of 19,504 square meters, standing nine stories tall with two floors underground. It is close to the upscale neighborhood of Irvine, but officially in the administrative district of Santa Ana, allowing a relatively affordable price tag. The building’s value is likely to rise considerably in the future and see attractive gains.

Currently, the California State Government occupies about 84% of the office space, and the remaining area is rented by other businesses, including a radiation consulting firm. The lease contract has 16 years remaining guaranteeing steady rent flow and the office is expected to generate annual returns in the 7-8% range.

Korea Investment & Securities has been actively investing in overseas alternative assets in North America and Europe. Recently the brokerage firm acquired Home Depot’s logistics center in Texas for about 300 billion won ($258 million) with Tiger Alternative Investors Co.

Earlier this year, the firm invested approximately $200 million into University of California, Davis’ housing assets worth $500 million.

Recently, Korea Investment & Securities was chosen as the preferred buyer for a new student housing building near the University of Texas at Austin for 140 billion won.

Meanwhile, Korea Investment & Securities is in works to establish a corporate body in New York to shore up its M&A, acquisition financing, and alternative investments abroad.



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