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Case Study | Roppongi 4 Chome PJ: Brokerage & Advisory

Colliers Asia - Case Study - Roppongi Chome 4 Tokyo

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Location (City)

Asset Type

Transaction Date

Size (Sqm)

Value (USD)

Tokyo

Development Land August 2020

2,037

approx. $233 million


Services provided:

  • Brokerage
  • Advisory for loan arrangement

Buyer: ACA Inc.

Seller: PAG

 

The Challenge


  • Price expectations
  • Expensive debt financing structure
  • Health and safety requirements

Among the many challenges in structuring and executing this transaction was meeting the vendor’s price expectations and negotiating compensation terms for tenants who would be evicted. This made it difficult to find a lender as they tend to be averse to the risk stemming from evictions.

In turn, finding equity investors, who tend to steer clear of expensive debt and demanding lenders, was a challenge.

Additionally, there was also the need to ensure the safe demolition of four old buildings full of asbestos, and meet the strict requirements of the Building Standards Act.

The Strategy

Colliers was brought on as the arranger and sole broker for the deal. The team focused on collaborating to find the right solution in setting up the transaction structure and executing the deal, all the while communicating and sharing information in a frequent and transparent manner with all related parties.

The Solution


  • Structuring and execution: Colliers was responsible for setting up the transaction structure and executing the deal.

  • Tenant eviction: Recognizing that this was a must in order to acquire financing, Colliers communicated closely with the vendor to inform them of the lender’s requests and keep them abreast of the latest developments to ensure the eviction proceeded smoothly.

  • Obtaining +300% bonus FAR (floor area ratio): Prepared a building plan and business strategy while lenders awaited authorised confirmation to help them evaluate this request from the equity investor.

  • Acquiring financing: Colliers introduced more than 20 lenders, including Japanese mega banks, regional banks, securities and leasing firms, as well as debt funds and HNW investors. We also connected the counterparties with over 200 investors, such as developers, RE funds, hedge funds and HNW investors.

The Result

All tenants eventually agreed to vacate the premises.

After receiving strong interest from several investment banks, Colliers was able to organize a less expensive senior debt solution from a Japanese bank and mezzanine debt from a securities firm. ACA came in as a private equity investor, leveraging their longstanding knowledge of the property and broad investor base.

The deal was finally set up and executed as a bankruptcy remote structure with Colliers also handling the legal and accounting requirements. 

 

Connect with our Capital Markets and Investment Services experts today to find out how you can maximise the potential of your next real estate investment.

Read more of our client success stories and case studies here.

 


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