MBK In the News

U.s.-based MBK Real Estate LLC to Jointly Operate a Logistics Facility Development Project

MBK Real Estate LLC (“MRE”), a U.S.- based wholly owned subsidiary of Mitsui & Co., Ltd. (“Mitsui”, Head Office: Tokyo, President and CEO: Tatsuo Yasunaga), and Rockefeller Group International, Inc. (“RGI”), a U.S.-based wholly owned subsidiary of Mitsubishi Estate Co., Ltd. (“Mitsubishi Estate”), entered into a joint venture agreement relating to a project for the development of Optimus Logistics Center (“Property”), a logistics facility located in the city of Perris, California, U.S.A., and executed investments in RG/MRE Optimus LLC, a special purpose company (SPC) for project development on September 19th, 2017. MRE and RGI each has a 50% stake in the said SPC. Total project cost is estimated approximately US$120 million (equivalent to approx. 13 billion yen). The construction of the Property will be completed in August 2018.

The market for logistic facilities in the U.S. has been continuously growing backed by growing demand through e-commerce. It is expected that the need for logistics facilities close to the main consumption centers with good access to public transportation will continue growing. While the Property has excellent access to important land, marine and air traffic links in Southern California, which is densely populated, it is located in an area where it is not easy to obtain the necessary permits for new development projects. In the area, where it is extremely unusual to find projects with an approximate total floor area of 134,000 square meters, the Property can meet the needs of not only e-commerce operators but also a wide range of tenants such as 3PL providers and manufacturers.

Mitsui and MRE have been operating a real estate development business in the U.S. for over 30 years. As of September 2017, the two companies engage principally in the ownership and operation of senior residences (22 facilities with approx. 2,500 units), the development and leasing of rental housing (6 projects with approx. 1,600 units), and the construction and sale of housing in development projects (7 projects with approx. 400 homes), primarily in the West Coast region of the U.S. As part of their strategy for expanding their current project portfolio, Mitsui and MRE will, in addition to continuing to develop housing-based projects based by consumer demands, endeavor to tap into new business fields that are being driven by business needs. Under this business expansion strategy, the two companies will strive to break into the logistics facility development market in the U.S., which has demonstrated consistent growth in recent years, and aim to transform their logistic facility development business into a new profit pillar over the medium to long run.

RGI has a track record of approximately 30 logistics facility development projects, with a cumulative total floor area of 1.2 million square meters, primarily on the East Coast and West Coast of the U.S. In addition, Mitsui has been working together with Mitsubishi Estate, the parent company to RGI, to jointly promote a number of potential logistics facility development projects within and outside of Japan, and considers Mitsubishi Estate to be an excellent partner for becoming involved in logistics facility development projects in the U.S.

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