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Tag Archives: liquidity

from Seeking Alpha, click link for entire article: Japan’s J-REIT Market to Get a $10.5 Billion Bailout

`While talking about it since March, the Japanese government (specifically, the Financial Services Agency and the Land Ministry) appears to be in the final stages of pumping over $10 billion into the J-REIT market and removing impediments to consolidation in the industry. The market-weighted average yield has recently been as high as 7%, but investors remained leery because of balance sheet and liquidity risk.`   Here`s their JREIT performance graph demonstrating the recent stabilization.

Banks can not very well avoid refinancing JREIT debt now with all of the government back up and regulator pressure.  This and the Lonestar pricing of New City has put a floor on the market – and likely an indicator of a bottom for the J-REIT sector.

It is `officially` time to get into the J-REIT market.

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They keyword spoken by many fund managers at the ULI Japan conference looking into 2009 was SURVIVAL.

So I think it`s time for us to all get prepared by dancing the TRF survival dance :  `no no cry more`

Opportunities will increase moving toward the fiscal year end and as some of these bankrupted and stressed real estate companies find sponsors and legal trustees work through others including the potential sale of assets.  But lenders/issuers of the majority of CMBS with terms ending in 2009 are much more likely to work with borrowers to restructure rather than resolve to a sale in this environment.  We have seen recent cases of lenders stepping back into a solution creating approach after checking the market, and working with owners to find a resolution – generally involving some sort of restructuring of terms, beneficial to both parties.   Excepting event driven cases (both on the borrower and on the lender side), this should be a theme for 2009.

Tokyo`s real estate supply / demand situation is very robust – compared to the rest of the developed world: supply is stagnant and new supply decreasing, rents are not really moving except for some strain at the top end of A class, occupancies continue to be very high, and recovery is generally expected to be much quicker than the US.  The continued risk is that strong government measures are not taken to begin healing the real estate debt liquidity crisis.