Skanska had fully leased its 2+U in the same year the project was completed
The Korean appetite for outbound investment remains healthy, with Hana Alternative Asset Management having closed out 2020 with one of the year’s largest acquisitions of a single US property asset.
The fund management division of Seoul-based Hana Financial Group in late December acquired a 95 percent interest in 2+U, a 38-storey office and retail tower in Seattle, for $669 million.
The Korean firm invested in the commercial project just over one year after Swedish developer Skanska, which is the seller of the stake, had completed the central Seattle tower and fully leased its space to tech-centred tenants including a unit of SAP and Dropbox.
In a statement, Skanska said the 2+U sale marks the largest single-property real estate transaction in the US since the start of the COVID-19 pandemic.
Ending the Year on a Bold Note
“Skanska is pleased to be partnering with Hana on 2+U,” said Murphy McCullough, executive vice president for Skanska USA Commercial Development’s Seattle market. “Hana is a well-respected professional organisation that has a long history of owning top tier Class A+ office buildings in international markets. They are well positioned for the future and will help shape and refine what 2+U will become for the community, our city, and our tenants.”
Hana Alternative Asset Management CEO Hee-seok Kim has picked up on Seattle’s tech wave
Following the closing of the deal, Hana immediately began property management operations at 2+U — so named for its location at Second Avenue and University Street in Washington state’s largest city — in conjunction with US-based Hines. Skanska will remain involved in the 2+U project following the recapitalisation, according to the statement.
Skanska describes 2+U as a retail, office and arts-and-culture project in the heart of downtown Seattle. Just steps from the Seattle Art Museum and the city’s waterfront attractions, the 703,000 square foot (65,311 square metre) complex is lifted 85 feet (26 metres) off the ground at the highest point to create an outdoor urban village situated under the building, Skanska said.
The development includes 686,000 square feet of office space, 17,000 square feet of retail/culture space and 24,000 square feet of covered outdoor space, with office floor plates of 18,000-30,000 square feet. At the stated consideration, Hana is paying just less than $1,002 per square foot for its slice of Seattle’s tech sector.
Anchored in Seattle Tech
Survey software provider Qualtrics, wholly owned by German software giant SAP, leases 275,000 square feet of office space across 13 storeys at 2+U after designating Seattle as its co-headquarters (along with Provo, Utah) in 2017. The office portion of the project is known as Qualtrics Tower as part of the leasing deal.
Qualtrics, which helps firms measure, understand and improve the ways their customers and employees experience products, services and their roles inside companies, has room for 2,000 employees at the 2+U space.
Other tenants at 2+U include Seattle-based coffee seller Caffe Ladro, tech firms Dropbox and Indeed.com, and flexible workspace provider Spaces.
Koreans Carry On
For Hana, the 2+U deal marks the continuation of a trend that saw South Korea lead Asia Pacific in cross-border property investment in 2019, when the country’s investors spent $17 billion on real estate outside their home region.
Hana kicked off the wave, spending €12 billion on European property assets in the year before last. The shopping spree included the KRW 1.3 trillion ($1.1 billion) purchase of The Squaire office building in Frankfurt from Blackstone at the end of 2019, adding Germany’s largest office building to Hana’s portfolio.
In September of this year, Hana was chosen as the preferred bidder for 2+U at a price of about KRW 800 billion ($680.4 million) with an expected annual yield of about 7 percent, South Korea’s Pulse News reported.
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