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The latest JREI investor sentiment survey findings were just reported, opinions gathered in April so a fairly fresh view to the market.   Summary: Expected cap rates have gone up 50-100bp over the last survey 6 months ago and still 20-30bp higher than current market cap rates…  although I don`t believe there are enough transactions happening to underwrite that well.

The core of core Marunouchi/Otemachi Class A Office has moved moved upward to 4.5% or 300bp over the risk free and to match core Ginza Retail at the same 4.5% which are now the theoretical bases to which we add risk premium points for other classes, namely:

Omotesando Retail at 4.7%, Suburban Tokyo retail 6.5%, Regional Retail Downtown areas 6-7% / Suburban 7-8%

Tokyo Warehouse Single Tenant / Multiple Tenant 6%, other metropolitan hubs 6.3% to 7%

Residential at 6.0% to 6.3% and in the regions 6.6-6.7% for Yokohama to a high of 7.7% for Sapporo

Economy Lodging Tokyo 6.1%, Osaka 6.8%, Nagoya 6.9%, Fukuoka/Sapporo 7%

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