TOKYO-In a multi-tiered arrangement, GE Real Estate Japan has completed a deal to sell seven properties here to a Japanese REIT for $309 million but then infuse that entity with funding from another GE investment vehicle.

The REIT, LCP Investment Corp., is buying two GE office buildings and five multifamily properties in the Tokyo metropolitan area, allowing LCP to grow its assets 64.3% to $740 million. Subsequently, a Japanese arm of GE called, New Mission Funding Corp., will purchase 32,500 newly issued units in LCP for $117 million.

“This is a great opportunity for GE Real Estate to establish a cooperative relationship with a Japanese REIT with excellent growth potential,” says GE Real Estate of Japan President Tomoyuki Yoshida in a release announcing the complicated arrangement. Yoshida says his firm is impressed by LCP’s management and expertise, adding GE’s goal is to enable larger, high quality assets to be secured and “help raise the overall profile and value” of the REIT.

That vision is shared by LCP, according to executive officer Shunji Myazaki, who comments that the portfolio of Tokyo properties “presents us with a pipeline of quality assets, and are in line with our external growth strategy.” To raise the remaining monies necessary to complete the purchase, LCP is seeking a loan from UBS that will increase the overall leverage for the REIT to nearly 60%.

GE Real Estate Japan will celebrate its 10th anniversary next year. During that time, the Stamford, CT-based operation has opened five offices throughout Japan. The firm owns 150 office buildings and 12,000 residential units in the country, accounting for $5 billion in net operating assets. Incorporated in 2005, LCP Investment Corp. was listed on the JREIT securities market of the Tokyo stock exchange last September. Managed by LCP REIT Advisors Inc., LCP’s portfolio contains 36 properties, the bulk of which are multifamily and senior housing developments.

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