Venture Buys 25 Properties in Japan

A joint venture formed by Kennedy-Wilson International and Colony Capital Inc. said Monday that it had purchased approximately 25 distressed Japanese properties and loans for nearly $40 million.

The portfolio--which was purchased for less than 10 cents on the dollar of their original face value--is the first acquisition for the newly created partnership.

“We are currently in negotiation on six other transactions in the Japanese market,” said Richard Mandel, president of Kennedy-Wilson’s Commercial Group.

Colony Capital, which is based in Los Angeles, and Santa Monica-based Kennedy-Wilson have said they expect to buy up to $350 million in heavily discounted Japanese properties and loans by year’s end. “Conventional wisdom says the market for Tokyo office buildings is dropping, but we see rising rents and declining vacancies in high-quality, well-located office buildings,” said Colony Capital Chairman Thomas J. Barrack Jr.

Kennedy-Wilson, a real estate investment and advisory firm, has been involved in Japanese real estate for nearly a decade. Colony Capital--a real estate investment firm with a portfolio of about $3 billion--already owns a substantial chunk of Asian properties, including a 30% stake in the luxury hotel chain Amanresorts Ltd.