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Lone Star to rescue failed J-REIT

The US investment fund has reportedly outbid Goldman Sachs and Oaktree Capital Management for the chance to rescue Japanese real estate investment trust, New City Residence Investment Corp.

Lone Star has reportedly won the right to rescue Japan’s first failed J-REIT, according to a report by Reuters.

The Dallas, Texas-based investment fund was among four final bidders hoping to invest in New City Residence Investment Corp, which filed for bankruptcy last October.

The Reuters report said Lone Star won the right to rescue the firm against competition from Goldman Sachs, the state-owned Development Bank of Japan and Oaktree Capital Management.

New City was Japan’s first REIT to fail amid the economic downturn, since the introduction of a REIT market in 2001. According to local media reports, New City left liabilities of about ¥112.3 billion (roughly $1.1 billion; €829 million). At the time of its bankruptcy, officials at the firm, said New City would look to merge with another REIT as part of its recovery plan.

New City Residence owns apartment buildings in Ginza, Harajuku and other areas of Tokyo.

Lone Star closed its sixth buyout fund and first real estate fund last July, on a combined total of roughly $10 billion. Lone Star Fund VI raised approximately $7.5 billion, while Lone Star Real Estate I garnered commitments of roughly $2.5 billion.