Maury Tognarelli Of Heitman LLC

GlobeSt.com: Exactly how long have you been working with Nomura now?

Tognarelli: For the better part of a year at this point. We went through an extensive evaluation wherein Nomura looked at Heitman and other managers and ultimately chose us to help them bring US REIT-securities product to their client base.

GlobeSt.com: The new fund is solely for Japanese investors?

Tognarelli: That's right. Nomura is marketing our expertise to their client base, which is a combination of individual and institutional Japanese investors. The first initiative focused on US public REIT securities. In the most recent initiative, part of the money will be allocated to US REITs, and we'll manage that, while the balance will be allocated to J-REITs in Japan, and Nomura will be responsible for that.

GlobeSt.com: And as the European markets continue to develop their own REIT structures, what are the chances there'll be similar initiatives there?

Tognarelli: We've not had those discussions with Nomura to date. There's a clear evolution taking place in the public markets overseas, and I have to believe that ultimately Nomura would want to offer investment products to its clients that include European securities. But to speculate on whether they do it through Heitman or other managers is premature.

GlobeSt.com: How large can the fund grow?

Tognarelli: There's no limit on the size. We're optimistic that Nomura will be successful in distributing and offering this product to its client base, and we expect it to continue to grow. It offers very competitive investment returns, and it should do well given the combination of our management and their distribution.

GlobeSt.com: And what could that distribution be?

Tognarelli: If you're asking what size range, it's in the hundreds of millions of dollars—sizably greater than the original fund.

GlobeSt.com: And the returns you mentioned?

Tognarelli: The expectation is that the product will yield a return in the 6%-to-8% range, which is our expectation overall for the combined strategy between the Japanese and US REITs.

GlobeSt.com: To what extent do you need to become expert in the details of Japanese and eventually European legislation?

Tognarelli: We obviously have to understand all of the legislation as well as the limitations that legislation may impose on the capital markets. Consequently, in the event that any market is identified as having limitations, that in turn limits interest on the part of investors. Each marketplace creates its own sets of guidelines, and you need to evaluate them, understand them and make your investment decisions accordingly.

GlobeSt.com: Any legislative limitations that cause particular concern?

Tognarelli: Not, but it's all premature. So we'll continue to evaluate each of the issues as they appear, translate what each will mean to investors and make our decisions accordingly.

GlobeSt.com: So what's next for Heitman?

Tognarelli: At this point we're not in a position to discuss any of the other investment products we have, either in the public-securities area or the direct-investment area, but we are looking at a number of opportunities.

GlobeSt.com: Globally?

Tognarelli: You can feel comfortable that we're talking not only about the US but also Europe. Both are markets in which we're very active for separate accounts as well as for the funds we've raised. We're very excited about the opportunities we see.