Emmes & Co. doubles Japananese portfolio

Real Estate Weekly, Jan 10, 2001

Emmes Japan Company Ltd., an affiliate of Emmes & Company LLC, has purchased two commercial office buildings in suburban Tokyo, doubling its portfolio of properties in Japan.

"The time is ideal to purchase properties in Japan," says Andrew Schwarz, a vice president with Emmes Asset Management, who is actively seeking opportunities for other acquisitions.

"Today, there are new opportunities with tremendous potential. A number of ongoing regulatory reforms in Japan are encouraging institutions to clean up their balance sheets, and consequently dispose of their assets.

"More and more buildings are coming to market, presenting investors with a rare opportunity to buy in Japan," says Mr. Schwarz. "These reforms are occurring at a time when the real estate market has shown signs of recovery after many years of economic decline."

One of Emmes's newest acquisitions is a 48,352-square-foot office building in the Yokahama district, near Tokyo. Purchased for just over $19 million, the nine-story building is occupied by affiliates of the Japanese conglomerate, Mitsubishi.

The second acquisitions a five-story office building in the prime retail district of Tamagawa, also in the greater Tokyo area. The 9,674-square-foot building, purchased for $5.3 million, is a commercial and retail facility.

A key selling point of both buildings was their proximity to public transportation systems, says Mr. Schwarz. "Access to commuter rail service is probably the most important factor prospective office users consider when selecting a location. Both buildings are located within a few hundred yards of commuter rail lines."

The buildings offer a rare opportunity to purchase properties of sufficient scale, that also offer good location, strong existing cash flow and upside potential via additional lease up opportunities and below market rents.

Last year, Emmes acquired the Nippon Ericsson building, an 112,000-square-foot office building in the Tokyo suburb of Shin Yokohama, and the Meguro Building, a 93,000-square-foot building in Tokyo.

Emmes Asset Management Japan, located in the Tekko Building in central Tokyo, is working with its Japanese partner, an affiliate of the Masuoka Gumi Group as well as a European-based investment consortium to identify buying opportunities.