U.S. Firms Take Stock of Portfolios in Japan
- Mar 15, 2011
March 15, 2011
By Allison Landa, News Editor
As Japan continued to reel from a devastating earthquake, tsunami and subsequent threats of nuclear meltdown, U.S. real estate companies began to take stock of their losses.
AMB Property Corp., whose Japanese portfolio comprises 10.6 million square feet of properties in operations or under development, said that the majority of its holdings in the Tokyo submarket experienced minor cosmetic damage and a handful have suffered buckling in paved truck court areas. Specifically, 9.5 million square feet and 88.8 percent of the company’s Japanese portfolio has experienced minor damage, while 700,000 square feet and 10.6 percent of the portfolio is largely operable but has limited access due to the buckling asphalt.
Though AMB did not have a specific status update on its holdings in the hard-hit city of Sendai, it expects that 400,000 square feet and 0.6 percent of its Japanese holdings have experienced material damage in its distribution center there. The company has confirmed that its local employees are all accounted for and uninjured and says it has made contact with most of its local customers.
AMB said repair work is underway at some facilities, though a recovery plan has yet to be established for the Sendai distribution center. It estimates exposure from insurance deductibles at less than $10 million, of which 40 percent is estimated to apply to fund properties while the remainder is estimated to apply to REIT properties.
CB Richard Ellis has closed its Sendai office for the time being, with regional services in Aomori, Iwate, Akita, Miyagi, Yamagata and Fukushima prefecture likely to be suspended until the Sendai office is reopened. There is no estimated time frame for the reopening.
Additionally, CBRE’s Tokyo headquarters and Saitama, Nihonbashi, Shinjuku and Yokohama branch offices are closed through March 15 to check for building safety. A reopening was planned for March 16.
Simon Property Group, which owns eight outlet centers in Japan including one in Sendai, did not provide an update on the status of its properties. Starwood Hotels & Resorts Worldwide Inc. said that although its Westin Sendai hotel sustained no structural damage, the property would be closed over the coming days since there are no functioning utilities.