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Tag Archives: hospitality

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%

Some interesting views, toward the US side, on hospitality investment from various investors on Hospitality Net here. Colliers is saying the investment cycle is at a historical bottom and I would like to be on the positive note too but with de-leveraging just starting and a few years of falling fundamentals ahead of us I find myself still on the other side of the line.  Do concur with the opportunity to access key core assets but the best method seems to be through discounted debt… the Japan case will likely turn out to parallel over the next year or two.