GE Real Estate this month agreed to sell several Tokyo properties to LCP Investment Corp., a Japanese REIT, and to buy a sizeable chunk of LCP shares.
LCP will purchase two office buildings and five multifamily properties in the Tokyo area from GE Real Estate and its subsidiaries for approximately $309 million, increasing LCP’s assets by 64.3% to a total value of approximately $740 million.
A Japanese entity of GE called New Mission Funding Corp. will purchase 32,500 newly issued shares of LCP for about $117 million. LCP will raise the rest of the required cash for the transaction through a loan from UBS, which will increase the overall leverage for the REIT to nearly 60%. UBS Securities Japan Ltd is the sole financial advisor to GE Real Estate Japan.
“We are very impressed with LCP’s management and expertise, and believe it has tremendous potential,” stated Tomoyuki Yoshida, president of GE Real Estate Japan. “Our goal is to add larger, high-quality assets to help raise the overall profile and value of this REIT.”
GE Real Estate Japan was established in 1998 and today has net earning assets of $5 billion, with approximately 150 office buildings and 12,000 units of residential properties across the country, with offices in Tokyo, Osaka, Fukuoka, Nagoya and Sapporo.
LCP is managed by LCP REIT Advisors Ltd., and was listed on the JREIT securities market of the Tokyo stock exchange in May 2006.