South Korean insurers acquire $101m of NYC RE debt

The building, located in the heart of Manhattan, is presently leased to a public high school.

A group of South Korean insurance companies have invested in $101 million senior secured debt of a real estate development in Manhattan, New York.

The 10-year investment will deliver an annual return of four to five percent. The proceed will be used to refinance the debt owed to global investment bank UBS. The loan-to-value ratio for the senior debt is less than 63 percent.

The building, Trinity Place, is located near the headquarters of Goldman Sachs and Deutsche Bank and the Federal Reserve Bank of New York building. It is entirely occupied by a public high school under the NYC Department of Education. The school will continue to use the building as its campus until 2027.

South Korea’s KTB Asset Management is the arranger for the senior debts sold to Korean investors.

Earlier this year, the manager also joined with two other Korean institutional investors to invest in $68.5 million of mezzanine debt secured by an office building in Manhattan, New York City.

In the low-interest rate environment, a lot of Korean institutional investors seeking yield and cash-flow have been turning their eyes to commercial real estate loans in major US cities while staying away from equity investment.

Seoul-headquartered KTB Asset Management is an investment company founded in 1999 investing in both public equity and fixed-income markets.