Much like German buyers of US real estate, a change in Japanese legislation has opened the door for investors in Japan to satisfy their appetite for the investment choice, says Heitman managing director of real estate securities Tim Pire. "I think the US REIT product will be attractive to Japanese investors from both the income perspective and the diversification perspective on a longer-term basis," he tells GlobeSt.com.

There appears to be little lingering effect from the real estate tailspin in the late 1980s and early 1990s, which hurt investors in both the US and Japan. "A number of investors suffered through the restructuring of the real estate industry in the late '80s and early '90s," Pire says. "But if they've been an investor since then, they've been pretty happy."

Earlier this year, Heitman signed on to advise on the Nomura US-REIT Open Fund, which is 100% invested in this country. In both cases, Heitman is acting as the investment adviser, buying and selling the US securities as well as setting the strategy for the portfolio, Pire explains. Nomura will take care of the Japanese end of the portfolio, as well as deciding on the allocation between US and Japanese REITs.

Heitman's top choices include two companies focused on separate US coasts. While San Francisco-based BRE Properties Inc. is a major West Coast multifamily player, Vornado Realty Trust gets 60% of its net operating income from its New York City and Washington, DC office portfolios, Pire says. The Paramus, NJ-based REIT also owns the 3.5-million-sf Merchandise Mart here.

Investors will buy Nomura Japan-US REIT Fund shares through UFJ Bank. "The product is a result of Heitman's investment expertise in US real estate securities, Nomura's expertise in Japanese real estate securities and our Japanese banking partner's extensive distribution network," says Heitman president and chief executive officer Maury Tognarelli.

While it starts at $26 million, Pire has modest expectations of the fund's ultimate size. "We're expecting the fund to grow slowly over time," he says. Adds Tognarelli, "We are very optimistic about the potential for the Nomura Japan-US REIT Fund and expect it to be very well received by Japanese investors."