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MORI TRUST CO., LTD.: Acquisition of Real Estate Properties in the Silicon Valley Area of the U.S.

March 22, 2019
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Exterior view (Photo: Business Wire)

TOKYO--(BUSINESS WIRE)--Mar 21, 2019--This is an announcement that on March 11, 2019, Mori Trust Co., Ltd. (Head Office: Minato-ku, Tokyo; President: Miwako Date) completed the acquisition of office building properties located in the city of San Jose, California, in the Silicon Valley area of the U.S., through its U.S. subsidiary MORI America LLC.

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Exterior view (Photo: Business Wire)

As one of the key strategies of our “Advance 2027” medium and long-term vision, our company is aiming to build a stable portfolio amidst the economic changes occurring around the world today, and has raised the goal of “investment in overseas real estate” with a scale of up to 200 billion yen.

The newly-acquired properties are located in the northern part of San Jose city, considered to be a central city in the Silicon Valley region where numerous IT-related companies have gathered together to make it a source of tremendous global innovation. The properties are surrounded by many world-leading global companies, and the area in which they are located is expected to undergo even further development in the future under San Jose city’s master plan for urban development* and its policy to encourage even greater accumulation of high-tech corporations.

The properties consist of 3 office buildings (and 1 parking garage) which have obtained Gold certification under the LEED international environmental performance evaluation system for buildings, demonstrating that they are structures with outstanding environmental characteristics. They are located within an integrated-development zone which also offers the high convenience of nearby commercial facilities and hotels. All 3 of the properties are currently at full occupancy and are intended to be operated over the long term as stable real estate assets.

By actively deploying overseas real estate investments while proceeding with domestic investments in various business areas, the Mori Trust Group will work to bring about further progress in the globalization of its businesses, and domestic business innovations which apply the information and networks it has obtained through its overseas operations.
* San Jose city “North San Jose Area Development Policy”, “Envision San José 2040 General Plan”

1. Acquired Properties
Overview of Properties
- Property Name
a. 110 Holger Way
b. 120 Holger Way
c. 130 Holger Way
- Property Address
a. 110 Holger Way, San Jose, CA
b. 120 Holger Way, San Jose, CA
c. 130 Holger Way, San Jose, CA
- Site Area
Approx. 9.7 acres
- Leasable Building Area
a. 140,043 sq. ft.
b. 227,583 sq. ft.
c. 236,040 sq. ft.
Total: 603,666 sq. ft.
- No. of Floors
a. 4 floors above ground
b. 7 floors above ground
c. 7 floors above ground
- Property Type
Offices, parking garage (1,687 spaces)
- Construction Type
Steel-Frame
- Year Build
2010

2. Overview of Local Subsidiary
(1) Company Name: MORI America LLC
(2) Member: Mori Trust Co., Ltd.
(3) Registered Office Address: 251 Little Falls Drive, Wilmington, DE 19808 U.S.A.
(4) Date of Establishment: November 7, 2016
(5) Business Content: U.S. presiding company for the purpose of real estate ownership, rental, and other related businesses

About Mori Trust Co., Ltd.

The Mori Trust Group is a corporation with a business history spanning more than 60 years, starting with the Mori Group founded by Taikichiro Mori. Akira Mori, the current Chairman (CEO) and third son of the Group’s founder, formed the Mori Trust Group which is now one of Japan’s leading developers, deploying businesses with a focus on real estate, hotel management, and investment operations. In June 2016, Miwako Date, the granddaughter of Taikichiro Mori and daughter of Akira Mori, became successor of the business as its current President (CEO), formulating the “Advance 2027” medium and long-term vision and developing a diverse range of businesses.

Real estate business

Our Group is one of Japan’s leading real estate business operators, owning or leasing 93 facilities (offices, hotels, residences, commercial facilities) in prime areas across Japan focusing on central Tokyo, with a total floor area of roughly 1.56 million m2 (as of the end of December 2018).

In the United States, we acquired 2 office buildings located in the Back Bay district, a prime area in the city of Boston, Massachusetts, in 2017, and are involved in their leasing businesses.

The projects our Group is currently engaged in include the “Tokyo World Gate”, a 38-floor facility with a floor area of roughly 200,000 m2 under construction in the Toranomon area, which is undergoing multiple plans for large-scale development as a hub for business interaction in central Tokyo. Scheduled for completion in March 2020, this facility will combine offices, the “EDITION” luxury lifestyle hotel, luxury condominiums equipped with hotel services, and lifestyle concierge functions oriented toward foreigners. In addition, we are planning to develop large-scale composite facilities in the Akasaka and Shinagawa areas of central Tokyo.

Hotel & resort business

Our Group owns and operates a total of 23 hotel and resort facilities across the country, with roughly 3,500 rooms (as of the end of December 2018).

Our Group is well known as a business operator that took on a leading role in attracting international hotel brands to Japan. Most recently, in December 2018 we opened “Iraph SUI, a Luxury Collection Hotel, Miyako Okinawa” on Irabu Island in the Miyako Islands of Okinawa Prefecture.

We are the largest Marriott Group hotel owner in Japan, owning, managing, and operating 15 hotels bearing the Marriott International brand, including existing, rebranded, and newly-developed hotels.

As examples of the hotel projects currently in progress by our Group, we are planning to open 2 locations of the Marriott International luxury lifestyle hotel brand “EDITION” in Toranomon and Ginza through collaboration between world-famous hotelier Ian Schrager and world-famous architect Kengo Kuma, and are also proceeding with plans together with Hilton Grand Vacations and Hilton for time-share resorts on Sesoko Island in Okinawa. We are additionally planning 19 new projects focused on areas representative of Japan, including Hokkaido, Nara, Nagasaki, and Okinawa.

Investment business

Our Group is known as a company contributing to the establishment of REIT markets in Japan, and has listed both diversified REIT and hotel-specialized REIT on the Tokyo Stock Exchange.

Since October 2017, we have also been striving to create new businesses through open innovation by setting an investment framework with a total of 20 billion yen, and have initiated a “new innovation investment strategy”. With “Re-Tech” which is related to real estate, and “Hospi-Tech” which is related to tourism and hotels, as our prioritized investment destinations, we are promoting the creation of new businesses through CVC activities for direct investment, as well as activities such as investing in M&A and venture capital.

Business performance

The business performance of our Group in the fiscal year ended March 2018 was as follows: operating revenue of 161.9 billion yen, operating profits of 31.9 billion yen, and net income attributable to owners of parent of 30.2 billion yen. The entire current value of real estate owned by our Group is 1.7 trillion yen, with a capital-to-asset ratio of 36.8% as of March 2018.

The forecasts for our business performance in the fiscal year ending March 2019 are: operating revenue of 174 billion yen, operating profits of 34 billion yen, and net income attributable to owners of parent of 40 billion yen.

Furthermore, Mori Trust Holdings, a holding company for our Group, obtained a long-term issuer rating of “AA-” from the Japan Credit Rating Agency in January 2018.

Medium- and Long-Term Vision “Advance 2027”

Following current President Miwako Date assuming the position of president, the Group announced a medium-and long-term vision, which emphasizes that the Group is prepared to make investments on the order of 800 billion yen in real properties and projects at home and overseas by 2027 while retaining its current level of owned capital rate, which is high by the standards of Japanese developers.

Biography: Miwako Date

  • Mori Trust Co., Ltd.: President and CEO
  • Mori Trust Hotels & Resorts Co., Ltd.: President and CEO
  • Mampei Hotel Co., Ltd.: Chair and CEO
  • Keidanren, Japan Business Federation: Permanent Secretary
  • Japan Hotel Association: Director / Chair of the Committee to stimulate Inbound Tourism
  • Japan Association of Corporate Executives: Secretary and other roles

After graduating from Keio University’s graduate school, Date joined a major consulting firm. In 1998, she joined the Mori Trust Co., Ltd., and in June 2016, became the President and CEO of the Mori Trust Co. Her father is Akira Mori, current Chairman and CEO.

While overseeing a number of large-scale real estate development projects in central Tokyo, Miwako Date steered the hotels & resorts business into bringing in a number of international hotels including: CONRAD TOKYO; Shangri-La Hotel Tokyo; Tokyo Marriott Hotel; Suiran, a Luxury Collection Hotel, Kyoto; The Westin Sendai; Courtyard by Marriott Tokyo Station; and Courtyard by Marriott Shin-Osaka Station.

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CONTACT: Mori Trust Co., Ltd.

Toshiyuki Fujii, +81-3-5511-2255

info@mori-trust.co.jp

KEYWORD: UNITED STATES ASIA PACIFIC NORTH AMERICA CALIFORNIA DELAWARE JAPAN

INDUSTRY KEYWORD: BUILDING SYSTEMS TECHNOLOGY OTHER TECHNOLOGY TRAVEL LODGING REIT CONSTRUCTION & PROPERTY COMMERCIAL BUILDING & REAL ESTATE

SOURCE: Mori Trust Co., Ltd.

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PUB: 03/21/2019 09:30 PM/DISC: 03/21/2019 09:30 PM

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