Bando Construction has invested 840 million won by providing the apartment sale revenue from the Pyeongtaek Goduk Block 2 as collateral to actively promote the second and third-phase housing development project in Koreatown, Los Angeles.
Previously, Bando Construction's first rental apartment development project recorded a 100% occupancy rate, and with various convenience facilities attracting the attention of young people in the U.S., the company is accelerating the second and third housing development projects.
According to the Financial Supervisory Service's electronic disclosure system on the 29th, Bando General Construction provided debt guarantees amounting to 8.54 billion won (about $6 million) and 61.2 billion won (about $43 million) for its subsidiary and local development corporations 'BANDO DELA 2 LLC' and 'BANDO DELA 3 LLC,' respectively.
The creditor is KEB Hana Bank's Los Angeles branch, and the debt guarantee period extends from the 18th to February 4, 2028.
BANDO DELA 2 and BANDO DELA 3 are the implementation corporations for the second and third housing development projects being pursued by the Bando Construction Group in Koreatown, Los Angeles. Bando General Construction owns these implementation companies through its 100% subsidiary, BANDUS Holdings Corporation.
To this end, subsidiaries of the Bando Construction Group are actively supporting financing for overseas development projects by providing collateral based on apartment sale profits and stepping in as guarantors.
Bando Construction provided a pecuniary claims trust on the apartment sale revenue from Pyeongtaek Goduk Block 2 as collateral (approximately 837 million won) for the payment guarantee for Bando General Construction's U.S. local financing. The collateral period is approximately four months, from the 18th to August 30.
Both Bando Construction and Bando General Construction are 100% subsidiaries of Bando Holdings, the holding company of the Bando Construction Group. Bando Holdings also provided guarantees to help fund the development projects of its great-grandchild companies in the U.S.
The reason the Bando Construction Group is focusing on housing development projects in the United States is that the first rental housing, 'The BORA 3170,' launched in the heart of Koreatown, Los Angeles, has successfully completed its occupancy.
The BORA 3170, which has one basement level and eight floors above ground, comprises 252 units and had an occupancy rate of 100% as of April this year.
According to the overseas real estate industry, the Los Angeles rental housing market, which mainly consists of monthly contracts, typically evaluates that if the occupancy rate is above 80-85%, it indicates that all units have been rented. The absence of temporary vacancies in rental housing suggests low customer turnover and high demand.
In particular, it is reported that the satisfaction levels of tenants are high due to community facilities such as a swimming pool, rooftop, restaurant, and gym being well-equipped, along with 24-hour security personnel.
Additional contracts are continuing based on introductions from existing tenants, primarily among young people. The rent varies depending on the number of bedrooms and size, with studio apartments averaging around $2,300 to $2,400.
Buoyed by the success of the first project, Bando Construction is also speeding up the second LA rental apartment development project. In January of this year, the company purchased a site at 3020 Wilshire Blvd, LA, CA 90010, and began construction to operate it as rental housing. The construction of 'The BORA 3020,' consisting of one basement level and eight floors with 262 units, is aimed for completion by December next year. As of April, the overall progress rate stands at approximately 40%.
Additionally, the Bando Construction Group has completed land acquisition and recently demolished the existing structures for the third housing development project, aiming for about 150 units in Koreatown, Los Angeles.
Currently, the project is going through the permit process, and construction is expected to begin around the end of this year. It has not yet been decided whether the third development project will be operated as rental housing like the first and second projects or will be sold off.
If the third development project is successfully completed, the Bando Construction Group will create a total of 667-unit 'The Bora' apartment town exclusively in Koreatown, Los Angeles.
A representative of Bando Construction noted, 'Attention is being drawn to the success of The BORA development project not only in LA but across the U.S., leading to ongoing inquiries about collaboration or offers to sell land.' They added, 'The U.S. housing market is relatively better in economic conditions compared to other overseas countries, leading to a perception that the development risks are lower.'