The Korean Teachers’ Credit Union and TIAA are looking to invest $1bn (€940m) in US debt through a joint venture.
TIAA will invest through TH Real Estate.
Korean Teachers’ Credit Union chairman Yonglin Moon said: “TIAA shares a similar mission to KTCU and is a market-dominant investor in the US.
“We plan to expand our joint venture relationship in real estate by seeking additional investments in other areas of real assets such as infrastructure.”
A low-interest-rate environment, said Jack Gay, TH Real Estate’s global head of debt, has resulted in investors looking for yield and for “defensive investments at this mature stage in the real estate cycle”.
“We continue to see strong demand from foreign capital looking for opportunities in the US, which appear to be especially attractive on relative basis, given global trends,” he said.
“Mezzanine loans in particular hold the potential to offer returns that are very close to equity returns.”
The agreement expands on an existing relationship that has invested more than $950m in US commercial real estate debt since 2014.
In 2014, the parties co-invested $455m in commercial mortgages backed by three office buildings in New York and Houston and then expanded the relationship that year to seek up to $1bn in additional assets via a joint venture.
The joint venture’s first investment was a mezzanine loan on the Mobil Building, a class-A office property located in Manhattan on 42nd Street and Lexington Avenue.
Subsequent investments included a mezzanine loan on 1285 Avenue of Americas in New York, a portfolio of US life science and biotech office buildings, and CMBS bonds backed by Market Square in San Francisco.
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