April 27, 2024

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[THE INVESTOR] Hangang Asset Management will invest about 100 billion won (US$ 87.16 million) in Amazon’s office building in downtown Seattle, in cooperation with domestic institutional investors such as Kyobo Life Insurance, Hanwha General Insurance and NongHyup among others, according to local news reports on March 14.

Hangang Asset recently decided to invest in Amazon’s office building, Urban Union, by creating a private real estate fund with Korean institutional investors. The investment is structured in a way that the building will be used as collateral for the issuance of mid- to high-credit bonds. 

Amazon's Urban Union building in South Lake Union, Seattle.

“Domestic institutional investors are increasingly seeking to invest in large office buildings in major US cities as investing in loans to secure stable fixed income has been beneficial,” an industry source was quoted as saying by Maeil Economic Daily.

The construction of the 12-story building was completed last year and has appealed to investors as Amazon’s high credit rating has enabled the lease contracts to run until 2033 with expectations of stable profits every year. The annual expected return is reported to be around 4 percent.

By Alex Lee (alexlee@heraldcorp.com)