Cap rate is the most important - they look at yields

High cap rate

Tokyo Size range: 500-1500M 3.7%-4% NOI <10 mins walk to train station <45 mins to Shinjuku, Otemachi, Shibuya Building <10 year old (up to 15 year old) Individually let (no minpaku / master tenant ) Low capex (no IOT and ideally no lift, no carpet, no car lift) room ideally not smaller than 20 sqm

80% current occupancy Ideally should have key money, rental guarantee and no rent free No common washing machine & dryer on each floor

95% - 4% cap rate

They use 85% occupancy as the conservative cap rate - 3.6%

They don’t have a very specific criteria, but mainly it is -

1. well located properties in good locations in Tokyo, near train stations
2. high cap rate near 3.8-4% (they focus on cash flow so try to achieve high cap rates, their current is 3.5% at 80% occupancy, so at 95% it is close to 4%)
3. under 15 years old building
4. Around 1 billion jpy
5. within 23 wards of Tokyo (unless there is a high yield)

Areas:

1. prefer Areas in shinjuku or Shibuya or accessible accessible to these (Nakano, Setagaya)
2. Shinagawa area
3. East Tokyo - before or past the river like Edogawa