Korea Post has acquired a 47 percent stake on 7 West 34th Street, a newly renovated Class A office and retail building in New York City’s Manhattan, through a managed account with CBRE Global Investors (GI). The seller, Vornado Realty Trust, said in a statement last week that it sold the interest at a value of $561 million or $1,176 per square foot. Vornado retains the remaining 53 percent interest in the property, which is leased to Amazon, the world’s largest online retailer.
The 477,143 square foot, 12-story building is located in Manhattan’s Midtown South submarket, which is dominated by tenants in the technology, advertising, media and information sectors. The property underwent significant renovations in 2014 to 2015, including improvements to the lobby, elevators, building systems, as well as renovations and repositionings of the tenant spaces. A new rooftop terrace, with views of the Empire State Building, is nearing completion.
The acquisition marks the third transaction that Korea Post has executed in US real estate, all through its separate account with CBRE GI. The state-owned investor entered the world’s largest property market in October 2013, leading a consortium of investors in the purchase of 161 N. Clark Street, a 49-story office building in downtown Chicago for $331.3 million, according to data provider Real Capital Analytics. Two years later, Korea Post purchased Midtown I and II, two core Class A office buildings totaling 794,110 square feet in midtown Atlanta for $226.2 million.
“This transaction was unique in that it worked in a gateway market,” said Jeffrey Torto, senior managing director in CBRE GI’s US managed accounts group, in an interview with PERE. “Other gateway markets are challenging because of aggressive pricing and cap rates.” He noted that in the US, Korea Post is primarily focused primarily on core office deals in the country’s top 15 markets, and could potentially look at non-gateway markets such as Dallas, Denver and Seattle.