South Korea’s Meritz Securities Co., Hyundai Marine & fire Insurance Co., and the National Credit Union Federation of Korea will together purchase a 50-story skyscraper in Seattle, Washington, for about 440 billion won (about $387 million), the largest overseas property deal by local institutional investors including brokerage firms this year.

According to multiple sources from the investment bank industry on Thursday, the three Korean investors are expected to complete the deal to buy Safeco Plaza in Seattle this week through a real estate fund launched by Korea-based Vestas Investment Management Co. They will jointly invest 200 billion won to acquire the landmark building while the rest of total 440 billion won will be sourced by receiving loans from financial institutions. The investment is expected to bring an annual return of the high 6 percent range.

Safeco Plaza, which was built in 1969, is a prime office building located in the heart of downtown Seattle. It is also the headquarter building of Safeco Insurance Co., the largest insurance firm in the U.S. West Coast that is wholly owned by Liberty Mutual Group, the second-largest insurance property insurance firm in the U.S. The building resting on a total floor area of 71,074 square meters was remodeled in 2007 and 2014. Safeco has rented out office space for 12 more years, allowing stable profit.

An unnamed official from the property investment industry said global institutional investors have turned bearish against real estate in the United Kingdom and other parts of Europe amid lingering uncertainties after Britain’s decision to leave the European Union last month. The official noted that after investors have shifted to safer assets, demand has grown for properties in major U.S. cities.

Vestas Investment Management that has led the latest deal has promoted three other overseas real estate purchases so far this year, with total purchase price reaching 800 billion won. The investment firm established in 2010 started out by investing in domestic properties in Korea, but since early this year, it has hired more investment professionals to bolster its overseas real estate investment projects. Vestas Investment Management is expected to expand its investment areas to include not only office buildings at home and abroad but also logistics centers, hotels, and retail properties.

By Song Gwang-sup

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