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Blackstone 'close to finalizing Japan deal'
By Mariko Katsumura |
July 23, 2010, Friday
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Print Edition
Print Edition
PRIVATE equity firm Blackstone Group LP is close to finalizing the purchase of property loans with a face value of around US$1.1 billion owned by Morgan Stanley's Japanese operations, according to sources.
The deal would mark Blackstone's first investment in Japan and could help breathe life into the world's second-biggest real estate market which has yet to see a major investment since the onset of the global financial crisis.
The proposed deal involves nonrecourse loans, which were backed by commercial real estate such as office buildings, that Morgan Stanley had extended with future securitizations in mind, the sources said.
The Nikkei business daily reported earlier that the collateral includes around 30 properties in the greater Tokyo area, where property prices are widely regarded to have reached bottom.
The newspaper said Blackstone is likely to pay far less than the 100 billion yen (US$1.15 billion) face value of the loans being discussed, and is expected to target future profit from the deal by unloading the loans to a third party or selling the collateral.
Blackstone is also in talks with Bank of America to handle about US$2 billion of the bank's real estate fund investments focused in Asia, the Japanese daily said.
An investment by Blackstone would underscore the bottoming out of real state prices in Tokyo.
"I see a growing consensus that Tokyo's property prices have reached bottom, and increasing activity among Japanese REITs (real estate investment trusts) is also very encouraging," said Takahiko Kishi, senior analyst with Mizuho Investors Securities.
The deal would mark Blackstone's first investment in Japan and could help breathe life into the world's second-biggest real estate market which has yet to see a major investment since the onset of the global financial crisis.
The proposed deal involves nonrecourse loans, which were backed by commercial real estate such as office buildings, that Morgan Stanley had extended with future securitizations in mind, the sources said.
The Nikkei business daily reported earlier that the collateral includes around 30 properties in the greater Tokyo area, where property prices are widely regarded to have reached bottom.
The newspaper said Blackstone is likely to pay far less than the 100 billion yen (US$1.15 billion) face value of the loans being discussed, and is expected to target future profit from the deal by unloading the loans to a third party or selling the collateral.
Blackstone is also in talks with Bank of America to handle about US$2 billion of the bank's real estate fund investments focused in Asia, the Japanese daily said.
An investment by Blackstone would underscore the bottoming out of real state prices in Tokyo.
"I see a growing consensus that Tokyo's property prices have reached bottom, and increasing activity among Japanese REITs (real estate investment trusts) is also very encouraging," said Takahiko Kishi, senior analyst with Mizuho Investors Securities.
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