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U.S.-Based MBK Real Estate LLC to Jointly Operate a Logistics Facility Development Project

Sep. 21, 2017


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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.

Outline of the Property

Project Name Optimus Logistics Center
Location Perris, California, U.S.A.
Land Area Approx. 28 ha
Number of Buildings 2
Total Floor Area Approx. 134,000 square meters, consisting of:
Bldg. 1: Approx. 96,000 square meters, Bldg. 2: Approx. 38,000 square meters
Total Project Cost Approx. US$120 million (equivalent to approx. 13 billion yen)
Schedule Start of construction: August 2017, full completion: August 2018
Site Characteristics In terms of sea traffic routes, the project site has good access to the Port of Los Angeles and the Port of Long Beach, both of which are key gateways for imports from Asia, and boast the largest and second largest volumes of cargo handled in the U.S., respectively. As for air traffic routes, the project site also has good access to the Los Angeles International Airport and the Ontario International Airport. In terms of land traffic routes, the project site is in the proximity of an interstate highway, making it easy to build a logistics network.
Property Characteristics One of the few properties in the area.

Expected Image of the Project after Completion

Expected Image of the Project after Completion

Layout

Layout

Project Site

Project Site

Outline of MRE

Name of Company MBK Real Estate LLC
Head Office Irvine, California, U.S.A.
Establishment January, 1990
Representative Katsuo Yamanaka, President
Employees 1,473
Equity US$218 million (approx. 24 billion yen)
Shareholder Wholly owned by Mitsui & Co., Ltd.
Business Activities Real estate business

Outline of RGI

Name of Company Rockefeller Group International, Inc.
Head Office New York City, New York, U.S.A.
Establishment December, 1928
Representative Daniel L. Rashin, Co-President & CEO
Tetsuya Masuda, Co-President & CEO
Shareholder Wholly owned by Mitsubishi Estate Co., Ltd.
Business Activities Real estate business

Notice:
This announcement contains forward-looking statements. These forward-looking statements are based on Mitsui's current assumptions, expectations and beliefs in light of the information currently possessed by it and involve known and unknown risks, uncertainties and other factors. Such risks, uncertainties and other factors may cause Mitsui's actual results, financial position or cash flows to be materially different from any future results, financial position or cash flows expressed or implied by these forward-looking statements. These risks, uncertainties and other factors referred to above include, but are not limited to, those contained in Mitsui's latest Annual Securities Report and Quarterly Securities Report, and Mitsui undertakes no obligation to publicly update or revise any forward-looking statements.
This announcement is published in order to publicly announce specific facts stated above, and does not constitute a solicitation of investments or any similar act inside or outside of Japan, regarding the shares, bonds or other securities issued by us.

Information

For inquiries on this matter, please contact

Mitsui & Co., Ltd.
Corporate Communications Division
Akihiro Tamo
Telephone: +81-3-3285-6645
Facsimile: +81-3-3285-9819