Simone Investment Managers, the investment arm of a South Korean handbag maker, has been joined by other South Korean backers to invest in mezzanine debt totalling $61.5 million to support an office property deal in Los Angeles, according to local media reports.
The unidentified borrower will use the loan to help finance its acquisition of a $500 million office complex from JP Morgan.
The investment accounts for two-thirds of a $93.5 million mezzanine slice with an annual return of five percent. Another $220 million of senior loans were reportedly underwritten by Morgan Stanley’s investment banking arm.
The Bluffs at Playa Vista, the two five-story office complex, is located in a technology neighbourhood in the heart of the Playa Vista sub-market in West Los Angeles. It was built in 2009 and has a lease space of 45,000 square meters. Tenants include Google, Sony, Fox Interactive Media, Honest Company, IMAX, Microsoft, YouTube, Vevo, Yahoo!, Belkin, Electronic Arts, and Gamefly.
US commercial real estate debt has attracted many Korean investors seeking a steady stream of income. In particular, office buildings in tier-one cities that are leased to global companies are the most attractive.
To exploit such opportunities, Samsung SRA Asset Management has partnered with JPMorgan Asset Management to launch its first US office mezzanine debt fund to provide Korean institutional investors access to stable core office assets in six US central business districts – New York, Boston, Chicago, San Francisco, Washington, DC and Los Angeles.
Earlier this year, Simone Investment Managers invested in a $100 million loan to a luxury hotel owned by Blackstone Group in San Francisco. The company also acquired De Rotterdam, a landmark building in Rotterdam in the Netherlands, from Rabo Real Estate Group in June.