First Chinese, now Korean investors are buying up New York City real estate

As South Korea’s economy struggles, more funds seek higher returns outside of its country.

Photo: Buck Ennis
Korean investors are now eyeing New York real estate.

South Korea’s biggest funds are hoping to get returns from Manhattan eluding them in Seoul.

Korea Post is the latest money manager from the nation to set up shop in New York to find real estate, private equity and hedge fund investments and may hire more people, its U.S. representative Chuljoong Jurng said. It follows National Pension Service and Korea Investment Corp., which have similar offices, chasing better returns from global alternative assets amid low yields at home.

Four interest-rate cuts over the past year haven’t been able to revive South Korea’s economy, which is growing at the slowest pace in two years. The record-low benchmark has stifled returns on bonds, with the government’s 10-year yield shrinking to its lowest ever in April. National Pension Service helped buy a Swedish shopping mall this year, while Shinhan Life Insurance Co. and Hyundai Marine & Fire Insurance Co. helped underwrite a $220 million loan to buy a Manhattan office tower. The buying spree follows similar moves by Chinese investors to park their dollars in New York real estate.

“With the continued low interest rates, it’s inevitable we’ll need to increase alternative investments to boost returns,” Mr. Jurng said. “As our assets under management keep growing, it’s become more important to get access to information and global investment trends for higher returns.”

Global hunt

State-run Korea Post, which oversees 106 trillion won ($89 billion), wants to diversify from stock and bond investments into other sorts of assets, Mr. Jurng said. He expects the new Manhattan office to improve deal sourcing and global research capabilities to help find such opportunities abroad.

Stocks and bonds are less reliable as hedges against each other, according to Kim Eun Gie, a Seoul-based alternative investments analyst at NH Investment & Securities Co. While the securities’ prices have usually been negatively correlated, they’re now moving in unison due to global monetary easing and that’s curbing the effects of diversifying, he said.

Korea’s asset managers have taken note. Their real estate holdings have surged 38% since the end of 2013 to 33.6 trillion won, Korea Financial Investment Association data show. Private equity funds raised 51.2 trillion won at the end of 2014 compared with 44 trillion won a year earlier, according to Korea’s Financial Supervisory Service.

“There aren’t enough alternative assets at home, forcing investors to look abroad,” NH Investment’s Kim said. “Unlike bonds or stocks, alternative investments are typically private, so it’s become essential to open overseas offices to broaden access to information.”

Getting older

Combined assets under management at Korea’s life insurance companies have almost doubled to 537 trillion won as of March 31 over the last five years as people save for retirement. By 2060, the elderly—defined as anyone over 65-years old—will make up 40 percent of the population, Statistics Korea data show.

Alternatives were the best-performing asset class last year for National Pension Service, South Korea’s biggest investor with 470 trillion won of assets. They returned 12.5%, which compared with a 5.25% overall gain. The fund plans to boost holdings of such assets to 11.5% by the end of next year from 9.9% at the end of 2014, it said in June.

National Pension Service, which has both London and New York offices, will also officially open a Singapore location in September to find Asian alternative opportunities, spokeswoman Hwang Ji Hye said.

Big role

“Overseas offices are playing a role in gathering new information and looking for valuable investment opportunities,” said Mr. Hwang. “We’ve been preparing for opening an office in Asia following the New York and London offices to build a strong overseas network.”

Korea Investment Corp., the nation’s $85 billion sovereign wealth fund, plans to almost double its share of alternative investments to 15% by year-end from 8% currently, and aims for 50% over the next five years, Chairman Ahn Hongchul said last month. Ahn expects longer-term returns of at least 10% if holdings rise above half of the portfolio.

It also operates in New York and London, where the focus is on both conventional and alternative assets. The fund plans to send more people from Seoul to those offices, largely to help assess alternative opportunities, said a company official.

“While stocks and bonds are financial assets, alternative assets are real investment, hedging against possible inflation going forward,” NH Investment’s Kim said. “To diversify investment portfolios and boost returns, the alternative investment would be an answer.

Schumer proposes plan for Hudson River rail tunnels

A dispute over funding has kept officials from getting started on a massive project increasingly seen as essential and urgent.

Two more massive projects planned for Astoria

The housing developments, on seven areas of Queens waterfront, will also fill in some of the missing pieces of a greenway.

Vornado weighs residential conversion of 20 Broad St.

The real estate investment trust may convert the office building into residential but before it can do so it would need to buy the 27-story tower.

Photo: CoStar Group Inc.
20 Broad St. could be converted to residential.

One of the city’s largest commercial landlords is mulling a residential project in lower Manhattan.

Vornado Realty Trust, which owns more than two dozen office properties in the city, is considering a residential conversion of either a portion or all of the 27-story, 473,000-square-foot downtown office building at 20 Broad St.

Sources familiar with the decision say Vornado may still choose to maintain the property as an office building rather than repurpose it as apartment space, which would likely cost tens of millions of dollars to create.

Vornado is exploring options for the property because, according to recent reports, the building’s biggest office tenant, the New York Stock Exchange, which leases nearly 400,000 square feet, is set to leave next year.

However, converting the property into residential won’t be easy. It may be difficult to lay out the building’s lower floors, which are larger than the spaces at the top of the tiered property, for apartments, sources said. An even bigger hurdle is the building’s complex ownership structure.

The New York Stock Exchange used to both own and occupy 20 Broad St.. Several years ago it ground leased the property to Vornado, while still remaining a tenant at the building.

Residential condo units are difficult to sell in ground-leased properties because the building’s ownership eventually reverts back to the owner of the ground. Apartment buyers are wary of that arrangement because it means their units will not be theirs in perpetuity and the land may also become less valuable as the ground lease nears expiration.

But now that NYSE is leaving 20 Broad, Vornado could purchase the building outright from NYSE and pursue the conversion. Some say Vornado could tear the existing building down and erect a new residential tower in its place.

Several owners have converted downtown office buildings into residential space or erected apartments from the ground up. Alchemy Properties, for instance, is converting the upper floors of the Woolworth Building into luxury apartments. And last week,  Chinese firm Oceanwide Holdingsreached a deal to purchase 80 South St., a development site that can accommodate a 1,000-foot tall tower with residential space.

Though Vornado is predominantly an owner of office and retail, the firm also has built high-end residential space. The company is developing one of the highest profile condo projects in the city, a nearly 1,000-foot tall tower with soaring Central Park views at 220 Central Park South. Vornado revealed in a recent earnings call that it has sold $1.1 billion worth of apartments in just a few weeks of opening the property to the market.

Chinese investors pay $390 million for right to build super-tower near South Street Seaport

China Oceanwide Holdings’ purchase of two adjacent sites will pave the way for a mixed-use development.

Photo: CityRealty
What a 1,000-foot tower would look like at the development site near South Street Seaport.

A Chinese investment firm announced it has agreed to pay $390 million for a development site near the South Street Seaport, paving the way for the erection of yet another super-tall skyscraper in a city that is quickly sprouting 1,000-foot plus tall towers.

The Beijing-based investment company China Oceanwide Holdings released a statement confirming that a U.S. subsidiary of the firm is in contract to acquire both the site at 80 South St. and a neighboring parcel at 163 Front St. from the Howard Hughes Corp.—the would-be developer of the nearby South Street Seaport.

A roughly 820,000 square foot building, with about 440,000 square feet of residential and 380,000 square feet of commercial space, can be developed on the combined site, which Howard Hughes bought in two separate deals and assembled together over the past year, according to city records.

Chinese real estate investors have increasingly poured money into the city. In late 2013, the Shanghai-based company Fosun, purchased the nearby downtown office building 1 Chase Manhattan Plaza for $725 million, subsequently renaming it 28 Liberty St. Earlier this week it won approval to create retail space it plans to spend $200 million building under the property.

Other Chinese firms have sought to build tall as well. Kaufu Properties reached a deal in recent weeks to buy a development site on East 60th Street that can potentially accommodate a 1,000-foot tall residential tower for more than $300 million, according to reports.

There has been a boom of ultra-tall towers in the city in general. As Crain’s reported August 5, developers Michael Stern and Joe Chetrit have struck a $90 million deal that will allow them to raise a tower in downtown Brooklyn that could be nearly as tall as the Empire State Building. That spire will be the tallest outside of Manhattan and possibly one of the highest in the entire city.

The site at 80 South St. has long been envisioned as a location for a soaring structure. Construction manager and developer Frank Sciame planned a unique-looking tower there designed by architect Santiago Calatrava, but eventually abandoned the complex project. CBRE brokers Darcy Stacom, Bill Shanahan and Paul Leibowitz handled the sale on behalf of the Howard Hughes.

A map highlighting the two acquired sites near South Street Seaport

Donald Trump’s ‘blood’ comment about Megyn Kelly backfires

Atlanta (CNN)Donald Trump’s latest controversial comment was so alarming that he’s been disinvited from a conservative gathering Saturday in Atlanta.

At issue: Trump’s comments on “CNN Tonight” about Fox News’ Megyn Kelly, who moderated a GOP presidential candidate debate Thursday night.

During the debate, she pressed Trump aboutmisogynistic, sexist comments he made in the past, such as calling some women “fat pigs, dogs, slobs, and disgusting animals.”

Trump slammed Kelly, saying her questions were “ridiculous” and “off-base.”

“You could see there was blood coming out of her eyes,” Trump told CNN’s Don Lemon on Friday night. “Blood coming out of her wherever.”

That remark crossed the line, said editor Erick Erickson. He disinvited Trump from the RedState Gathering, a conservative event featuring GOP presidential hopefuls this weekend in Atlanta. Trump was scheduled to give the keynote speech Saturday night.

“I have tried to give a great deal of latitude to Donald Trump in his run for the presidency,” Erickson wrote.

“He is not a professional politician and is known for being a blunt talker. He connects with so much of the anger in the Republican base and is not afraid to be outspoken on a lot of issues. But there are even lines blunt talkers and unprofessional politicians should not cross. Decency is one of those lines.”

Republican stalwart and Fox owner Rupert Murdoch praised debate moderators Kelly, Bret Baier and Chris Wallace — while criticizing his friend Trump.

“Friend Donald has to learn this is public life,” Murdoch tweeted.

Erickson said while he likes Trump personally, “I just don’t want someone on stage who gets a hostile question from a lady and his first inclination is to imply it was hormonal. It just was wrong.”

But the Trump campaign fired back, saying “this is just another example of weakness through being politically correct.”

“For all of the people who were looking forward to Mr. Trump coming, we will miss you,” his campaign said. “Blame Erick Erickson, your weak and pathetic leader. We’ll now be doing another campaign stop at another location.”

It was not immediately clear where that new campaign stop will be.

But the RedState Gathering will go on without Trump. This year, the annual event features fellow GOP presidential candidates Jeb Bush, Chris Christie, Ted Cruz, Carly Fiorina, Mike Huckabee, Bobby Jindal, Rick Perry, Marco Rubio and Scott Walker.

As for the newly vacant spot at the RedState Gathering, Erickson has invited Kelly to replace Trump.

Trump pushes his ‘stupid’ rivals around

Donald Trump participates in the first primetime presidential debate hosted by Fox News and Facebook at the Quicken Loans Arena in Cleveland.  (Photo: Chip Somodevilla/Getty Images)

Like a lot of you — OK, like four of you, anyway — I made time to tune into the warmup Republican debate yesterday afternoon, the one for the seven candidates who barely registered in the polls. And the more I heard from them, the more I thought: You know what? These Republican voters might just know what they’re doing.

When Carly Fiorina’s such a standout that Rick Perry offers to make her secretary of state, you know you’re not dealing with the A-team.

Then I watched the main event a few hours later. What I saw there were several serious and talented politicians who might well have the skills needed to get themselves elected and actually govern — all of whom punted on a clear opportunity to demonstrate it.

You see, the primetime debate brought into sharp relief the actual schism that divides the Republican candidates heading into the fall. It isn’t conservative versus moderate. It isn’t simply insiders versus outsiders, or the party establishment versus the Tea Party types.

It’s about governing Republicans versus ideological provocateurs. It’s politicians who believe in wielding and reforming government as a vehicle for change on one hand, and those who see a career in public service as a mark of ineptitude, if not an outright vice, on the other.

Trump pushes his ‘stupid’ rivals around

The 10 leading candidates to this point break down roughly into equal groups, although a few of them (namely Scott Walker and Rand Paul) are hard to categorize. On the governing side you have Jeb Bush, Marco Rubio, John Kasich and Chris Christie.

The provocateurs include Mike Huckabee, Ben Carson and Ted Cruz, but the loudest, crassest voice in the pack clearly belongs to Donald Trump.

It took only a few minutes for Trump to start denigrating everybody who chooses to serve in government rather than do something truly ennobling, like build casinos and high-rises for millionaires.

“Our leaders are stupid,” Trump said in regard to immigration, after refusing to rule out an independent run and laughing off his record of misogyny. “Our politicians are stupid.” (Mexico’s leaders, he added, are considerably smarter and “more cunning.”)

Which more or less elicited this response from the governing Republicans on stage: Oh. OK, then.

I mean, not entirely. Bush talked about the power of education reform, and Kasich had a nice riff about lifting up the poor through more efficient programs, and Christie pushed his plan to modernize Social Security. Each of them sounded downright Clintonian at times — as in Bill, not Hillary.

But where Clinton coupled his calls for policy reform with a spirited defense of government generally, the best potential nominees in the Republican Party just stood there while Trump dismissed everyone who serves in government as a moron.

When Kasich, who served with distinction for 18 years in Congress before winning two terms as governor of Ohio, was asked to respond specifically to Trump’s “idiot” comment, he responded with compliments.

“I was just saying to Chris Christie, they say we’re outspoken?” Kasich said. “We really need to take lessons from Donald Trump!” And then this: “People who want to just tune him out, they’re making a mistake.” And then: “We all have solutions.”

I get it. None of the party’s serious thinkers wants to give Trump yet more oxygen by getting drawn into a brawl. They probably figure he’ll flame out at some point, and when he does, where’s the upside in having alienated his disaffected supporters?

But let me break it to you, guys: You’re not getting Trump’s supporters. They don’t like what you stand for. They don’t like government, period.

And so there was an obvious moment Thursday night when somebody on that stage could have stepped up and played the part of Joseph Welch to Trump’s Joe McCarthy. (“Have you no sense of decency, sir?”) There was a chance for Christie to flash some of that famous indignation (he managed to summon it easily enough for Paul), or for Bush to show some of the sure-footedness and fire that a lot of Republicans are waiting for.

You’d think at least one governing Republican would have the courage to jump in and say: You know what, Trump? Governing matters. Politics matters. It helps to know something about policymaking before you go running down everyone who devotes years of their lives to it.

It’s true that most people who get themselves elected to something or who lead government agencies will never own a tower with their names on it. But that doesn’t make them stupid; it makes them committed.

And, just by the way, while you were pretending to fire people on TV, a bunch of us were agonizing over hard decisions that affected millions of families devastated by a real recession. We may be stupid, but we’re not callous, and we’re not amateurs.

Seems to me a moment like that might have done a lot to lift one of these guys out of the middling pack. It might have resonated with all those other conservative voters — the ones who nominated George W. Bush and John McCain and Mitt Romney, because in the end they aspired to something more than a doomed revolt.

What voters want, too, is a nominee who won’t let himself get pushed around when his closely held values are under attack. On that score, you can give this round to the bully.

Republicans — and Trump — take center stage, and here’s what to expect

Image: File photo combo of Republican presidential candidates

Republican presidential candidates (top row L-R) Donald Trump, Jeb Bush, Scott Walker, Mike Huckabee, Ben Carson, (bottow row L-R) Ted Cruz, Marco Rubio, Rand Paul, Chris Christie and John Kasich are seen in a combo of recent file photos. The head of the Republican Party on Wednesday said its presidential candidates are unlikely to attack each other in the party’s first official debate but instead are focused on ousting Democrats from the White House. Seventeen Republicans, led by billionaire Donald Trump, who has taunted fellow contenders, are seeking the conservative party’s presidential nomination. Only 10 will be on stage Thursday night in the first prime-time debate, which could offer a boost in exposure to voters and a chance to break out of the pack. REUTERS/files STAFF / Reuters

First Read is a morning briefing from Meet the Press and the NBC Political Unit on the day’s most important political stories and why they matter.

Republicans — and Trump — take center stage, and here’s what to expect

CLEVELAND — One of us is here just outside of the first Republican debate of the 2016 presidential cycle, and the atmosphere is … electric. All of the media, TV trucks, conversation — it feels more like a political convention or general-election debate than your first primary-season debate. And rest assured, it will probably get the largest TV audience for a primary-season debate, at least for one held on cable TV. Here is what to expect from each of the 10 GOP candidates participating:

  • Donald Trump: With all eyes on him, he’s smartly downplayed expectations and has emphasized that he intends to play nice. But he also has to deliver the same toughness and channel the same anger fueling his rise in the GOP polls.
  • Jeb Bush: As we wrote yesterday, maybe no one has more on the line than Bush does. He’s had a rough last week — especially as Hillary Clinton has used him as a punching bag. And here’s the thing: He’s the most well-known unknown person (due to his last name) on that debate stage.
  • Scott Walker: He has the buzz and the record, but does he look the part? That will be his biggest challenge of the night.
  • Marco Rubio: Ditto. And he can’t afford to disappear at the debate — as he has disappeared from the 2016 scene these past few weeks.
  • Mike Huckabee: If you want to place an early bet on the best performer of the night, Huckabee would be a smart call. He is the only one of the 10 who has actually participated in a presidential debate before. And he was routinely the best performer in the 2007-2008 debates.
  • Ted Cruz: Can he handle the 60-second time limits and come across a bite more likeable than his perception, especially in DC?
  • Ben Carson: His low-key demeanor could be a weakness. Can he display some fire and passion that don’t come across in his interviews?
  • Chris Christie: He’s used to being the center of attention, but can he handle being on the outside looking in? How does he assert himself?
  • John Kasich: Ditto.
  • Rand Paul: Make no mistake: The Jesse Benton indictment has rocked the Ron/Rand Paul World, and the campaign needs a major pick-me-up from this debate.

Russian mogul selling Miami Beach penthouse for $15 million



12 Rules To Live By When Buying Into A Retirement Community


Retirement living never looked so good. But if you want to buy in, follow some rules.


Retirement living never looked so good. But if you want to buy in, follow some rules.
Retirement living never looked so good. But if you want to buy in, follow some rules.

Rocketing prices, dwindling inventory, yearlong waiting lists, buyer lotteries—no, it’s not the 2005 housing bubble. It’s the current investment boom in retirement living.

Demand for homes in “retirement” communities is on the rise. (I use the term loosely, because some of these developments are so dynamic they’re more like luxury adult summer camps.) Behind this, naturally, are the baby boomers, who account for about a quarter of the U.S. population. Born between 1946 and 1964, they started hitting retirement age a few years ago, and in the next decade, they’ll drive up the number of retiree households by about 10 million.

Though the National Association of Realtors reports that overall housing inventory is up slightly from a year ago, it doesn’t break out stats for retirement housing. Clearly, though, it’s a seller’s market. Brokers complain of shortages, and in some new communities there are even 2004-style lotteries for newly constructed homes. That’s right—when builders have more reservations than they do inventory, some put you into a lottery. No auction, no bidding war. They just pick names from a hat, and if yours isn’t one of them, you’re out.
The market is especially hot for the buyer willing to spend $1 million or more on a home. All over the country, high-end builders are cranking up their development of retirement communities. The game has attracted national players, including Chicago-based Vi, founded 25 years ago by billionaire and current U.S. Secretary of Commerce Penny Pritzker; Toll Brothers, the publicly traded high-end builder from Horsham, Pennsylvania; and Miami housing behemoth Lennar, which builds retirement and active-adult homes in 18 states. And there are plenty of local sharpshooters as well, like Robson Resort Communities in Arizona and the Lutgert Companies in Florida and North Carolina. (Meanwhile, international destinations like the Bahamas and Mexico, which offer tax advantages, lenient ownership restrictions and appealing prices, have become interesting to stateside retirees and developers as well.)
If you’re retiring soon, you may be wondering how to navigate this frenzied market. There’s no single strategy that works for everybody—these days, retirement can mean very different things for different people. But no matter where you fall on the spectrum, one thing’s for certain: Buying what will likely be your last home is nothing like buying your first.

Here are a dozen key ways to get it right:

Acclimate before you relocate. Weather is a key consideration when you’re buying a retirement home, especially for year-round residents. Places like Florida, Arizona and southern California are significantly more seasonal than they probably seemed during your annual one-week holiday visits. If you’re planning to make one of these vacation locales your primary residence, consider renting during the off season before you buy. Off-season deals like half-price golf might even make Florida’s humidity bearable in the summer.
Get to know the characters. Take some time to appreciate the personality of the neighborhood and your prospective neighbors. Retirement will bring more downtime than you may have been used to, and social activities are big in planned communities. Your fellow residents will be your new friends—or your new nemeses. Either way, they’ll have a bigger impact on your life than your bathroom fixtures or hardwood floors.
Check out the medical care. Many retirees endeavor to experience an active lifestyle. Does the community provide medical services? If there are no on-site health care facilities, how far must you travel? Does the community provide in-home health services, or are local physicians willing to make house calls? Remote upscale communities should be equipped with a helipad for airlift.
Factor in local tax rates. Some states are more retirement friendly than others. Income, property and estate taxes are crucial considerations when choosing a location in which to invest. Find the recipe that suits you. For instance, complying with residency requirements in Florida, Wyoming or Texas can create great income-tax advantages, but property taxes are relatively high.
Time your buy to get the best price. The best time to buy is just as the local high season is ending. In southern states, that’s usually May and June, when the weather gets steamier and the tourist stream slows to a trickle. Buyers gain negotiating power as sellers become nervous about the lull. Like the pricing but not quite ready to retire? Consider buying the home and renting to another retiree.
Study the community financials. Many retirement and second-home communities were hit hard during the downturn. While a recovery is taking place, some of these places have fared better than others. To avoid surprises, carefully review the financial records of the homeowners’ association. Search county clerks’ offices for liens and foreclosures within the community. Research community assessments through the association and the local property tax appraiser. While you’re at it, ask for the meeting minutes of the community board to learn what they’ve been concerned about lately.
Scope out the approval process. Big-city residents who live in condos and co-ops are used to being scrutinized by boards, but are you? Some retirement communities have stringent approval processes. Learn about what’s required by consulting with your broker and current residents. If you’re not crazy about the idea of your new neighbors looking at your banking records, or asking for references, you may want to consider a living situation with a less invasive approval process.
Explore “membership.” Full-service communities frequently offer specific club-membership structures. Study the requirements and options. In some communities, for instance, the purchase of an ownership stake known as an “equity membership” is mandatory. This investment may run into the hundreds of thousands of dollars, yet its appreciation and resale value can be uncertain. Many communities also charge annual dues and a food and beverage minimum. The equity members are responsible for maintaining the club at any cost. During the downturn, many clubs suffered as fewer members were able to pay their shares.
Scrutinize the activity calendar. You may not have thought this much about games since your school days. But again, you’re about to have a lot more time on your hands. So spend some time figuring out if the community you’re buying into provides activities you take seriously. In most cases, there are the country club staples—golf, tennis, swimming. But some of the most popular activities for retirees these days may sound foreign to you. Pickleball, for example, is played with paddles on what looks like a badminton court, and has become a craze for seniors who used to play tennis. Bocce, the Italian lawn-bowling game, is also hot, primarily because it can be played with a drink in one hand.
Research the restrictions. Rental and resale restrictions are common in gated communities and condominiums. Still, you may be startled by what some retirement communities disallow. Pets are just the tip of the iceberg. Some places ban outdoor grilling and cigar smoke. Some won’t let you park a car in your driveway or warn burglars that your home is equipped with a security alarm system. You may not even be allowed to talk on your balcony after dark. And a long list of rules may also indicate a high level of board politics. If you decide to buy in, be prepared to get involved. Condo and co-op dwellers know well that it’s often just one or two people on a board who create 95 percent of the drama.
Consider the caretakers. Who’s going to take care of your home when you’re out of town, ill, or just don’t feel like it? Some communities offer more maintenance, repair and security services than others. Predictably, well-staffed condos are easier to maintain than individual homes. However, caretaker and home-watch services are common offerings in high-end communities. Some visit 200 to 300 homes per month and charge $50-$100 to open and close the house and make sure your lights, air conditioning and pool pump are working.
Don’t forget the big city. Homes in walkable cities like New York, Boston and San Francisco can be expensive, but provide many built-in advantages for retirees, including health care services, mass transit and a wealth of activities and social opportunities. It’s not surprising that many people of means move from suburbs back to these cities as empty nesters or retirees. If a retirement community in a place like Naples or Scottsdale just isn’t