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U.S. property companies assess damage in Japan

Posted On: Mar. 15, 2011 12:00 AM CST

NEW YORK (Reuters)—U.S. real estate companies were trying on Monday to assess damage to hotels, warehouses and outlet centers they own in Japan after last week's devastating earthquake and tsunami.

Information was trickling in as the companies, including four real estate investment trusts, took stock of properties in the prefectures of Miyagi, Iwate, Fukushima, Ibaraki and Chiba, where there was extensive destruction.

U.S. companies Starwood Hotels & Resorts Worldwide Inc., ProLogis, Simon Property Group Inc. and AMB Property Corp. have buildings in those prefectures, according to data provider SNL Financial. Japan, one of the world's wealthiest countries, is a favorite among U.S. real estate investors.

AMB, which owns and operates warehouse and distribution centers, said in a statement that its facility along the coastal area of Sendai in Miyagi had been more severely damaged than most of its properties in the Tokyo area. The company said it had not been able to reach its Sendai facility.

Repairs were being made at some locations, AMB said, adding that it had offered space in its properties to its displaced customers.

AMB, a REIT, said its properties in Japan were insured against tsunami and earthquake damage, and that it expected its insurance deductible to be less than $10 million.

About 60% of that is likely to apply to properties owned by the REIT, and the other 40% would apply to properties belonging to the funds AMB manages for institutional investors, the company said.

ProLogis, based in Denver, Colorado, has four properties in hard-hit prefectures, according to SNL. The company, which is merging with AMB, did not return calls.

Simon Property owns eight outlet centers in a joint venture with Mitsubishi Estate Co. Ltd., the company's spokesman said. One of the centers is in Sendai.

Starwood said in a statement that its Westin Sendai hotel had no structural damage, but it would be closed over the next few days because there were no utilities. Its shares closed up 0.8% at $58.29.

CBRE Investors, part of global property services company CB Richard Ellis Group Inc., has about $400 million of assets under management in Asia. It was not clear if any of those assets were in Japan, and CB Richard Ellis declined to comment. CB Richard Ellis shares closed down 0.4% at $27.19.

LaSalle Investment Management, part of Jones Lang LaSalle Inc., said it was having difficulty getting information about its properties in Japan. The company manages $43 billion of investments around the world. Shares of Jones Lang LaSalle closed down 1.4% at $98.54.

AMB shares closed down 2.4% at $34.09, and ProLogis shares finished down 2.3%, at $15.09. Both underperformed the benchmark MSCI U.S. REIT Index, which was off 1%. Simon Property shares closed down 1.2%, at $105.63.