Story of a Big Player from Gangnam

The next day, Gun-Ho headed out for Sinsa Town in Seoul from his office in Jiksan Town to meet with President Park who was the owner of the RiverStar building. It was a simple drive to get there from his office. He just needed to take a highway from North Cheoan IC all the way to Sinsa Town.

“There might be heavy traffic from Yangjae Town to Banpo IC. I’d better leave early.”

Gun-Ho had his lunch on the way to Sinsa Town at the rest area; he had Udong.

Gun-Ho arrived at the RiverStar building. He entered the building, and he was looking at the building directory board when a security guard approached Gun-Ho.

“Which company are you visiting?”

“I am here to meet with President Park of Haseong Company.”

The security guard seemed to be frightened when he heard of the name President Park, and he said,

“You will have to go up to the 18th floor.”

He even pushed the elevator button and let Gun-Ho get into the elevator.

Gun-Ho didn’t see any workers inside the Haseong Company’s office except a secretary lady who looked like in her 50s. The building management office was probably located somewhere else. The secretary stood up from her desk chair when she saw Gun-Ho entering the office.

“I am here to see President Park.”

“Umm, are you President Gun-Ho Goo of GH Mobile?”

“Yes, I am.”

“Please come with me.”

The secretary led Gun-Ho to the president’s office. The office was unexpectedly large. Its floor was covered with a grey carpet. There was a frame hanging on the wall, and it said something in Chinese character. Also, an enormous taxidermied turtle was attached to the wall.

“I am Gun-Ho Goo from GH Mobile.”

Gun-Ho gave the old man a 90-degree bow respectfully.

President Park didn’t even bother standing up to greet Gun-Ho. He just pointed to an empty seat on a sofa while sitting on the other side of the sofa.

“Have you reviewed the real estate registration of this building?”

“Yes, I have, both for the land and the building.”

“This building is located in the center of a commercial area; however, the government didn’t apply 90% maximum Building Coverage Ratio to this building, so it is spacious.”

“I haven’t fully checked the entire building yet, but I have noticed that the emergency exit and the basement look old.”

“Those things can easily be fixed. Do you have enough funds to acquire the building? I do trust Chairman Lee, but you look so young. So I have to make sure that you have funds to buy the building.”

“Don’t worry about it.”

“How do you know Chairman Lee from Cheongdam Town? Are you a friend of his son?”

“I met him at a fishing site. I’ve known him for five years now. He is one of the people I admire greatly.”

“You admire him? You know that he used to work as a hard money lender, right? He is not someone who should be admired. He was the worst person among the worst. He seemed to be a better person now since he is old.”

The lady who was sitting outside the president’s office entered the room with green tea.

President Park said to her,

“Manager Kim, please bring me the report on last month’s rental revenue and last year’s balance sheet.”

“Yes, sir.”

After the lady left the office, Gun-Ho asked President Park,

“I thought she was a secretary. Is she in charge of accounting here?”

“She does both. She has been working for my company—Haseong Company—for over 30 years now. She joined us right after she graduated from a commercial high school.”

“Did you say 30 years? Wow.”

When he heard of 30 years, Gun-Ho thought the turtle that was attached to the wall might have lived that long. The lady came back to the office with the documents that President Park asked.

“As you see in this chart, the monthly rental income is about 900 million won.”

“What about its vacancy rate?”

President Park didn’t answer Gun-Ho’s question; instead, he asked for someone via the interphone.

“Director Yoo? Please come to my office.”

After a moment, a man who looked like he was in his late 50s entered the office. Gun-Ho was not sure where this man came from because he didn’t really see anyone in the company except the lady at the front desk.

“What’s our vacancy rate?”

“You can safely assume that it is zero since we are in the center of Gangnam.”

President Park turned his head and looked at Gun-Ho and smiled.

“Did you hear that?”

When the Director Yoon person didn’t leave the office but wondered if he could leave or if he had to stay, President Park gestured for him to leave the office.

“How much total debt does this company have?”

“It’s 60% of the appraised value.”

“What was the appraised value?”

“It was 230 billion won including the land and the building altogether.”

“When did you get the appraisal?”

“It was issued last year by Korea Appraisal Board.”

“Can I have a copy of the appraisal?”

“I knew you would ask for it. I’ve already prepared a copy for you.”

“So, both of the land and the building were appraised at the time, right?”

“Of course. Take a good look at the appraisal and analyze it; you will find all the information you need in that paper.”

The appraisal contained pictures of the building’s exterior, entrance, and basement parking lot, etc.”

“You are paying more than 400 million won per month for just the loan interest by keeping this building.”

“Unbelievable.”

“I’m sorry?”

“Your capacity for mental computation is incredible. Chairman Lee from Cheongdam Town was right.”

“What are you talking about?”

“He told me that a young man who would eat me alive would come to see me.”

After President Park’s strange statement, there was an awkward silence that filled the air for a while.

Gun-Ho continued to talk while sipping his cup of green tea.

“You are making 900 million won by leasing the offices in this building, and you pay 400 million won for your loan interest out of the 900 million won. You also have to pay for expenses like labor and other costs. You will also have to consider the depreciation cost of the building. Are you getting enough income from this building?”

“I am still alive, aren’t I?”

“How much do you want to sell it for?”

“Well, I need to know first who is buying it. Is it an individual or a business entity that is purchasing my building?”

“A company will purchase it.”

“Then, I will have to receive 90% of the building’s appraised value.”

“So, you want to sell the building for 207 billion won.”

“I still can’t believe you calculated that without a calculator. You are more than qualified to be Chairman Lee’s apprentice.”

“Pardon me?”

“Never mind. I’m just talking to myself. Go on.”

“What is the total security deposit?”

“I believe it’s about 40 billion won.”

President Park was about to call for someone to get the exact amount, but Gun-Ho stopped him.

“It’s okay. That’s enough. I roughly grasped the financial status with this building.”

“So, are you still interested in buying this building?”

“I will send my employees to you the day after tomorrow. Please have the accounting manager lady and the Director Yoon person ready, so my employees could talk with them. They will talk in more detail about how to proceed with the sales and purchase.”

“Let’s make it quiet. I don’t want my workers to be worried.”

“Yes, sir. I understand.”

Gun-Ho gave his business card to President Park before he left the office. He also gave it to the accounting manager lady on his way out.

When he came back to his office in Jiksan Town, Gun-Ho called for Director Yoon.

“Have you heard from the architects in the U.S.?”

“They said they would come here next Monday.”

“That’s good.”

“What is good, sir?”

“Director Yoon, you will need to make a short trip to Seoul the day after tomorrow.”

“To Seoul, sir?”

“I will explain to you. Oh, why don’t we ask the internal auditor and Manager Jong-Suk Park to come to the office, so I can explain to you all?”

Gun-Ho picked up the interphone and asked the secretary,

“Have the internal auditor and Manager Jong-Suk Park from the production department to come to my office.”

“Yes, sir.”

After a moment, the internal auditor and Manager Jong-Suk Park came to Gun-Ho’s office.

“Why don’t we sit here?”

The three men sat at the conference table while wondering what this meeting was about.

Gun-Ho started explaining the situation.

“There is a building in Sinsa Town, Gangnam District, Seoul. It is called RiverStar. It is located at the entrance of Garosugil Road on the main street. The total floor space is 4,200 pyung with the land of 270 pyung; it is a 19-floor building. Its appraised value is 230 billion won, and I want to buy it.”

“Huh? Did you just say 230 billion won?”

The three men’s jaws dropped and looked at each other in surprise with their mouths still open.