KTB Asset Management and other South Korean institutional investors have decided to invest $100 million in State Street Financial Center in Boston, the headquarters building of State Street Bank, according to investment bank sources on Thursday.
KRB Asset Management will raise a fund from NH Investment & Securities and other domestic institutional investors to finance the deal this week. The fund will buy mezzanine debt backed by State Street Bank building, and the investment period is five years with an expected annual return of between 6.5 and 7 percent.
The landmark 36-story building in Boston inaugurated in 2003 has a floor space of 97,200 square meters and the building’s net value is worth nearly 1.4 trillion won ($1.24 billion). State Street Bank, the second largest trust bank in America, is due to use the property by 2023.
Many domestic institutional investors are seeking for stable investment and the building where a globally leading financial group is a long-term tenant is quite appealing to them, an investment banking source said.
This will be KTB Asset Management’s eighth investment in overseas property since it launched an organization dedicated to alternative investment outside Korea last October. Over the last seven months, it has sealed seven deals worth about 600 billion won in total, including a high-profile deal involving Marriott Hotel in New York.
By Kang Doo-soon and Song Gwang-sup
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