GreenOak Sells Tokyo's Aoyama Building to Gaw Capital

(Bloomberg) -- Private equity firm GreenOak Real Estate LP has sold Tokyo’s Aoyama Building to affiliates of Gaw Capital, according to people familiar with the matter.

Gaw Capital is paying around $800 million to $850 million for the 13-story office tower, the people said, asking not to be identified because the information is private. It invested through a so-called separately managed account for clients including a Korean pension fund, the people said.

New York-based GreenOak bought the building, which houses its Japan headquarters, in 2015 for about $500 million and has roughly tripled its equity investment through the sale, one of the people said. Under GreenOak’s ownership the building was renovated, enabling the landlord to increase rents about 40 percent, according to the person. It now also includes the country’s flagship Aston Martin dealership.

GreenOak’s other Japanese transactions include the sale of a floor within luxury shopping complex Ginza Six in 2017, about six months after purchasing it in a deal that allowed the firm to double its equity investment, one person said. A GreenOak representative and an official at Hong Kong-based Gaw Capital declined to comment.

Gaw Capital specializes in upgrading under-utilized properties and has $18 billion of real estate under management across Asia Pacific, the U.S. and Europe.

Tokyo offices are attractive to investors given their climbing rents and low vacancy rates. Overall vacancy rates are expected to remain below 3 percent at the end of 2019, among the lowest for a major Asian city, according to Colliers International Inc.

GreenOak, founded by a trio of Morgan Stanley veterans in 2010, is in the process of merging with Bentall Kennedy LP. The tie-up will create a business with about $47 billion of assets under management and is expected to be completed in the first half of this year.

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