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SEOUL, SOUTH KOREA-American Realty Investors of Dallas has formed a joint venture with the Korea Exchange Bank and WOORI Securities to advise Realty Korea CR, a new REIT that will invest in office buildings in Korea and throughout the world.

Realty Korea CR REIT recently acquired three buildings – the 1,078,015-sf Say Department Store in Daejeon, South Korea; a 104,734-sf office building in Bundang, South Korea; and a 596,782-sf office building in Seoul, South Korea. The REIT is currently looking to acquire three additional buildings in the Seoul area.

The objective of the REIT is to increase its market capitalization to $900 million (U.S.) in managed properties and then expand into office, multi-family and hotel development. Its partners include Kyobo Life Insurance Co. Ltd.; LG Fire & Marine Insurance Co. Ltd.; Shinhan Bank Co. Ltd.; Dongyang Fire & Marine Insurance Co. Ltd.; and Transcontinental Realty Investors Inc.

The REIT made its first appearance on the Korean Stock Exchange on May 13 under the ticker symbol “RKCR1.” An initial public offering was made April 27 and 28.

American Realty is touting the REIT’s joint venture advisory, Realty Advisors Korea Ltd., as the first American-Korean joint venture company to serve as an advisory company in the emerging Korean REIT market. Several members of Realty Advisors Korea senior investment staff came from Arthur Andersen’s Korean real estate advisory group.

Realty Advisors President and CEO Kevin Chung, says the creation of the REIT and the advisory follows nearly three years of work with the Korean government to create a new investment structure suited to provide the Korean real estate market with liquidity similar to that in the American and European markets.

REITS and public real estate operating companies own as much as 40 percent of the investment-grade real estate assets in the United States and Europe. Hee-Sup Yoon, an economist with the Hana Economy Research Institute, anticipates that Korea’s REIT market system can absorb as much as 30% of Korea’s investment-grade real estate with anticipated yields of 8% per annum.

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