Investors - AUGUST 26, 2016

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Korea Post to invest $450m in U.S. mortgage co-investments

by Andrea Waitrovich

Korea Post has issued an RFP for three global real estate fund managers to make joint investments in first mortgages of U.S. commercial assets for a total of $450 million.

Korea Post will commit about $150 million in each of three separately managed accounts, which are required to make loan investments in core properties mainly in gateway or secondary regions. The separate accounts, likely to be launched in the fourth quarter, will expire within 12 years, with a 10-year lending period subject to a two-year extension.

Proposals are due Sept. 2. According to the RFP, the blind-type investment vehicles are expected to deliver gross returns of more than 3.8 percent for each investment case. The expected returns are more than 200 basis points over 10-year Treasury yields.

Qualified global management firms must specialize in commercial real estate first mortgage investments and should make at least 50 percent of each loan investment.

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