New SVN Office Targets Korean Investors

"Koreans in general have prospered for the past five or 10 years, they have money to invest and they see the United States as a very good place to invest," explains Song, who emigrated to the US 28 years ago and has consistently ranked in the top 10 advisers nationwide for Sperry Van Ness. She says that Koreans and Korean-Americans see the US as a stable environment with quality investments available in virtually all product types.

Another chief factor driving the increased investment in the US includes Korea's lifting of the cap on how much Korean individuals can invest overseas. After the country raised the cap to $1 million, Koreans invested nearly $2 billion in US residential property in 2006, up from $1.27 billion in 2005. In 2007, Korean officials raised the cap to $3 million, which is expected to generate yet another surge in Korean investment in the US. Much of the investment flows to Southern California as home to one of the world's largest Korean populations outside of Korea.

Song tells GlobeSt.com that the Korean investors range from individuals with $500,000 of capital to large private and governmental institutional investors with tens of millions of dollars at their disposal who are all showing increased interest in US real estate. She says that the smaller Korean investors for the most part are interested mainly in retail and office properties and also in properties that are entitled multifamily development.

The Korean investors understand the management of these property types, Song explains, and they prefer them for other reasons too. "The cap rates are easy for them to understand, there are not so many management issues, and they see these property types as providing a good return versus other investments--with lower perceived risks," Song says.

Song expects that with the new, higher limit on Korean investment in the US, the flow of investment dollars here will increase substantially by this summer. She expects the Koreans to be interested in properties ranging from infill and redevelopment properties in Los Angeles to properties in the Inland Empire, including the High Desert region surrounding Victorville. The SVN vice president points out that the same pattern of development that resulted in much of the growth of Los Angeles is now emerging in the Inland Empire as the logistics and distribution industry locates facilities near the 15, 10 and 60 freeways in the Inland Empire.

The new SVN Koreatown office is at 3600 Wilshire Blvd., in the heart of the city's Mid-Wilshire district. Working with Song in the new office are Sperry Van Ness advisers Nick Kim, Kenneth Park, Sonia Choi, Vivian Lee, Nicole Park, Scott Kim and Michiko Hamada.

Sperry Van Ness office is one of two brokerages that recently opened new offices to serve the Korean market. The other is NAI Capital, which has opened an office in the City of Commerce.