For the 118,777-square-foot pad itself, Japan Prime will pay $445 million or about $3,746 per square foot. In Japanese currency, the acquisition price is 36,000 million yen. One yen on Mar. 1 equated to a .012456 U.S. dollar.
Japan Prime is buying the dirt from Tokyo Prime Stage Y.K., another prominent commercial operator. The deal is scheduled to close March 12 in the offices of Mizuho Trust & Banking Co. It will be an all-cash deal.
The announcement is newsworthy to the real estate industry for its transparency. For example, the brokerage firm coordinating the land sale deal stands to make a cool commission of $13.34 million, or about 3 percent of the purchase price.
The announcement is equally newsworthy in showing Japan's developers are not dismayed by the earthquake, tsunami and nuclear disasters that struck the island country of 126 million residents in 2011. Hirohito Kaneko, executive officer of Japan Prime, one of the largest commercial developers in Japan, issued the press release.
The temporary name of the building is Otemachi 1-6 Plan. Japan Prime paid below the Jan. 31, 2012 appraised price of 36,900 million yen or about $460 million U.S. Daiwa Real Estate Appraisal Co. Ltd. of Tokyo made the appraisal. Japan Prime says it will not own the building but will derive leasing revenue from surface rights and a 70-year lease with the building's owner. The lease will run from Mar. 11, 2012 to Mar. 11, 2082.
Japan Prime projects gross annual rents from the building should total 2,695 million yen or about $33.29 million U.S. Net operating income is projected at 1,304 million yen or about $16 million U.S.
The building has been under various stages of construction since November 2009. It is scheduled for completion by May 2014. The structure will have 38 above-ground stories, six underground levels and three additional floors built over the rooftop.
The structure is being built in Otemachi, one of the leading office areas in Japan. Kaneko, Japan Prime's executive officer, said in his new release the Otemachi area "boasts superiority and high-value in aspects such as name recognition and brand strength as an office location."
(World Property Channel)