Where Have I Been? Marriott Exec Apartments on Yeoido

by Brendon Carr

Just before Chuseok Doil and I finished (more or less, as no big and complex project is ever truly finished) the project that’s been consuming so much of our time since the last part of July. The Marriott Executive Apartments at Yeoido Park Centre have been sold and the apartments and marvelous fitness club are now open for business.

We represented Marriott, the manager of the facility, in the US$100m deal. The buyer, Japanese real-estate firm Re-Plus, was represented by attorneys Mr. Sang-Jin Ahn and Mr. Heung-Suk Oh of Kim & Chang, while original developer and seller Lee & Lee was represented by Mr. J C Seo of Leaders Law Group.

One of the things about working for the hospitality industry is the great people you meet. They just tend to be nicer than in other industries—it’s in the definition of “hospitality”. MEA General Manager Ty Collins has to be one of the most patient, nicest people we’ve ever met. Yet we’re sure that he maintains high standards because the property Ty oversees is truly best in class. I wish I were living at the MEA, but unfortunately with a family of four I think even the MEA apartments might be tad cramped for us.

This deal should have been pretty straightforward, but was made complicated by the financial distress of the developer (these are splendid, high-priced apartments coming on line at a time of market softening), the need to separate parts of a property which had been developed as a single entity, and the fact that the apartments property had not yet opened for business at the time of the sale. A sale and opening at the same time raises a lot of interesting legal issues. Marriott’s Washington D.C. team of Vic Fernandez and counsel Aron Friedman were superb—among the best clients we’ve ever had. Thanks also to the Re-Plus side, who were easy to work with.

When I mention separating parts of the property, I refer to carving out certain floors of the building containing the Marriott Executive Apartments and registering them separately; Korea has a system of “strata title” by which different floors of the same building could belong to different parties. The MEA occupies floors 2-14 of one of two towers at Yeoido Park Centre, plus certain ancillary areas of the below-ground structure related to the operation of the MEA. Originally these were to belong to the same owner, but Lee & Lee needed to offload some of the property now. So there was a rather complex business of separating out the parts of the building necessary for the MEA, to be sold to Re-Plus.

A lot of Korea’s serviced-apartment properties were developed in the same way as this property: Two towers of “officetel” buildings go up, with one tower containing a serviced-apartment/hotel property, and the other tower full of officetel units which are essentially “free riders” on the reputation and services that follow the serviced-apartment/hotel. The Somerset Palace over by Kwanghwamun, and the Ramada Seoul Central Apartments next to our offices appear to share this basic concept with the MEA at Yeoido Park Centre.

With different owners, having what could become competing interests, the buildings’ “condominium association” by-laws become an important bit of glue holding everything together. So we spent a fair bit of time on that too.

Blogging should return to a more rapid pace now that this deal is complete.

September 27, 2007 | Filed Under Blogging

Comments

Comments Policy: Comments to Korea Law Blog are moderated. This means abusive, or just plain stupid comments will be deleted. So don't be a jerk. It also means there may be some delay from the time you post a comment to the time it shows up here. If your comment wasn't against the policy, it will show up in a little bit.




XHTML: You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <code> <em> <i> <strike> <strong>

Please enter the word you see in the image below: