TH Real Estate, the global real estate investment arm of TIAA Global Asset Management, will set up a joint venture with the Korean Teachers Credit Union to invest up to $1 billion in U.S. commercial real estate loans.
TH Real Estate said in a news release that its contributions to the joint venture would be made on behalf of the TIAA general account. For every loan made by the joint venture, TIAA will contribute 51% of the funding and KTCU will contribute 49%, according to a spokeswoman.
Jack Gay, TH Real Estate's global head of debt, noted in the release that opportunities in the U.S. market continue to draw interest from foreign capital seeking yield in a low-interest-rate environment.
Among those opportunities, mezzanine loans in particular are garnering attention, with the potential of offering returns close to those of equities, he said.
The new joint venture would be the third between TH Real Estate and the 22 trillion won ($19 billion) Korean Teachers Credit Union over the past three years. The first, in 2014, involved co-investing $455 million in commercial mortgages backed by three U.S. office buildings in New York and Houston. Later in 2014, the two sides established a joint venture partnership, aiming to invest up to $1 billion in additional assets.
KTCU Chairman Yonglin Moon said in the release that the credit union could look to extend its relationship with TIAA in the future to cover real asset segments such as infrastructure.
Sung Suk Kang, KTCU's chief investment officer, couldn't immediately be reached for comment.