The Korean Teachers’ Credit Union and TH Real Estate have agreed to establish a new joint venture, where the parties will contribute up to a combined $1 billion to invest in U.S. commercial real estate loans. TH Real Estate’s contributions to the joint venture are on behalf of the TIAA General Account.

“The low interest-rate environment has investors looking for yield and for defensive investments at this mature stage in the real estate cycle,” said Jack Gay, TH Real Estate’s global head of debt, in a statement. “We continue to see strong demand from foreign capital looking for opportunities in the U.S., which appear to be especially attractive on a relative basis, given global trends. Mezzanine loans, in particular, hold the potential to offer returns that are very close to equity returns.”

The agreement expands upon an existing relationship, which has invested more than $950 million in U.S. commercial real estate debt s