Korea Post, one of South Korea’s largest investment funds, is close to acquiring a 49 percent stake in a Midtown property almost fully occupied by Amazon, sources told The Real Deal.
Vornado Realty Trust, which owns the 477,000-square-foot building at 7 West 34th Street, tapped CBRE to market a stake in the property last year. The real estate investment trust considered selling as much as 90 percent of the 12-story building, located near Fifth Avenue.
Sources familiar with negotiations said the stake sale, which is slated to close in June, would value the property at nearly $600 million, or north of $1,200 per square foot.
Korea Post is South Korea’s state-run postal service. Its savings division, known as Korea Post Savings, oversees $90 billion in global investments. Though it has made only sporadic moves in the U.S. in recent years — it purchased a Chicago office tower in 2013 and a pair of Atlanta office towers in November – it recently announced plans to commit $400 million to real estate acquisitions in the U.S. and Canada.
Last year, Korea Post signed a lease for its first Manhattan office, a nearly 3,000-square-foot space at Princeton International’s 150 East 52nd Street.
Representatives for Korea Post, Vornado and CBRE could not be reached for comment.
Amazon, the world’s biggest online retailer in the world, signed a 17-year lease in 2014 for 470,000 square feet of office space. It’s paying in the low $60s per square foot for the space, according to Vornado, and also has three five-year lease options that could stretch the lease until 2047.
Earlier this month, a Cushman & Wakefield broker sued the brokerage for allegedly stiffing him on $1 million in commissions in the Amazon lease deal. The brokerage subsequently fired him.
Under its deal with Vornado, Amazon also has the option to acquire all or part of the building, the New York Post reported last year. But the retailer has yet to exercise it.
South Korean investors have been increasingly investing in debt in Manhattan’s office towers. And last year, the Korean Teachers’ Credit Union bought a stake in Edward Minskoff’s 51 Astor Place, thus valuing the building at $600 million.
Source: Real Estate