Asian Investors Making Moves in US CRE Markets

A new article from the Wall Street Journal titled Asian Investors Dig Into U.S. Property takes a look at the impact foreign investors are having on real estate development in the United States. Equity investments in the U.S. from Singapore, South Korea and China are already at all-time highs this year, for a combined total of $5.2 billion through mid-June, according to data from Real Capital Analytics. An excerpt from the article with investment information follows:

Singapore, the No. 1 Asian investor in U.S. property this year, has invested about $1.9 billion as of mid-June. That is more than the cumulative total that the city-state has invested in the U.S. over the past decade, Real Capital data show.

Singapore's recent deals include the Government of Singapore Investment Corp.'s acquisition of an office building in San Francisco's Financial District. GIC also bought a resort in Maui and four other hotels from hedge-fund manager John Paulson's real-estate fund. In June, Singapore property investor Overseas Union Enterprise completed its purchase of U.S. Bank Tower in Los Angeles, the tallest building in California, for $367.5 million.

China has invested more than $1.5 billion in 2013, compared with $300 million in 2012, according to Real Capital. Last year, the China Insurance Regulatory Commission paved the way for more deals by relaxing the rules for some big insurers to invest in certain types of overseas property.

Meantime, numerous South Korean investors are shopping in the U.S. For example, Mirae Asset Global Investments Co. recently agreed to pay $218 million to acquire an office tower on Chicago's West Wacker Drive.

South Korea pension funds, flush with contributions from an aging population, increasingly have been looking for property outside the domestic market. Representatives of country's National Pension System are making the rounds in New York, looking to invest a mimimum $100 million in office buildings, hotels or shopping malls, commercial real-estate brokers say.

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Singapore Firm Pays $367M for US Bank Tower in LA

Overseas Union Enterprise Limited announced this week that it would acquire the US Bank Tower and Maguire Gardens in downtown Los Angeles for $67.5 million. Beringia Central LLC, a wholly owned US subsidiary of Singapore-based Overseas Union Enterprise Limited, is purchasing the building from Library Square Associates LLC, a subsidiary of MPG Office Trust Inc. Terms of the deal and brokers involved in the transaction were not disclosed. Net proceeds from the transaction are estimated to be approximately $103 million, according to an MPG press release.

Overseas Union Enterprise Limited Executive Chairman Dr Stephen Riady commented, "After a successful 2012, OUE is seeking new avenues for growth where value can be identified and realized. We intend to bring our knowledge and network to bear in pursuing new opportunities to generate value for shareholders. US Bank Tower is a well-positioned building that we expect to appeal to a broad base of both local and international office tenants operating in California."

US Bank Tower is a Class A office property at the foot of Bunker Hill. Rising to 1,018 feet, with 72 floors of office accommodation and six levels of underground parking, it has an area of approximately 1.4 million square feet. The building was completed in 1989. US Bank Tower is about 56.3% occupied with a diverse tenant base, including Akin Gump Strauss Hauer & Feld, U.S. Bancorp, and commercial law litigation services provider Cornerstone Research Inc.

For more news and information visit Blumberg Capital Partners.