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Big guns eye Lehman real estate assets in Japan

Blackstone, Lone Star, Cerberus, Goldman Sachs and Nomura Bank are reportedly among those registering their interest in Lehman Brothers real estate debt units, Lehman Brothers Commercial Mortgage KK and Sunrise Finance.

A clutch of private equity groups are bidding for Lehman Brothers Holdings’ real estate assets in Japan.

According to a report in The Wall Street Journal, funds managed by The Blackstone Group, Lone Star, Cerberus Capital Management, Goldman Sachs Japan and Nomura Holdings are among the early bidders for Lehman’s real estate loan units – Lehman Brothers Commercial Mortgage KK and Sunrise Finance.

The two units, which filed for bankruptcy protection on 16 September last year, on the same day as Lehman Brothers Japan filed for protection in the wake of the collapse of parent company Lehman Brothers Group, had liabilities totalling ¥748.4 billion ($8.37 billion; €6.45 billion).

While Japanese firm Nomura Holdings purchased Lehman Brothers’ Asian operations alongside its European and Middle Eastern operations, it did not take on any debt held by the US bank.

According to the report, the timing of the auction is contentious. Those close to the administration of Lehman Brothers’ operations outside of Asia said that the sales of the two units would generate more cash if they were held at a later date. This is due to the faltering Japanese economy which saw record numbers of bankruptcies in 2008.

Research released earlier this month by Tokyo Shoko Research said that the number of corporate bankruptcies in Japan grew by 11 percent last year to 33. This eclipsed the previous record for bankruptcies of 29, recorded in 2002. Of the 33, to be declared bankrupt last year, 25 of the companies were real estate focused.