Investment Risks
Risks related to investment in LaSalle Japan’s investment units are listed below. The list, however, is not exhaustive. For risks particular to property that has been acquired or is scheduled for acquisition, please refer to Section 2 in the Securities Registration Statement submitted on November 8, 2007, Investment Targets (2) Overview of Individual Real Estate in Trust Concerning Properties Acquired or Scheduled for Acquisition in the 4th Fiscal Period, as well as Section 1 in the Securities Report, Fund Information; Paragraph 1. Fund Status; 5. Management Status; (2) Investment Properties (iii) Other Fundamental Matters Concerning Investment Properties; and (f) Overview of Individual Real Estate in Trust.
LaSalle Japan has policies in place and takes extreme care to avoid any occurrence of the risks listed below and to effectively deal with any that arise. However, LaSalle Japan cannot guarantee that such actions will be sufficient. In the event of such risks arising, the investment unit price might depreciate and the cash distribution amount may be reduced, as a result of which unitholders may possibly suffer losses. Therefore, investors should, at their own responsibility, undertake investment judgments concerning LaSalle Japan investment units by carefully reviewing the information provided here and in other sections of this Web site.
For more detailed information concerning investment risks, please refer to the Securities Registration Statement dated November 8, 2007.
(1) Risks Related to Investment Unit Marketability
- Risks related to fluctuations in the market price of investment units
- Risks related to cash distributions
- Risks related to fluctuations in revenues and expenses
- Risks related to the dilution of investment unit price due to additional unit issuances
(2) Risks Related to Management Policies
- Risks related to inability to acquire or dispose of properties
- Risks related to properties occupied by a single tenant or small number of tenants
- Risks related to fund procurement by means of additional issuance of investment units, borrowings, or issuance of investment corporation bonds
(3) Risks Related to Interested Parties and Arrangements with Interested Parties
- Risks related to dependence upon or conflicts of interest with LaSalle Investment Management Inc. and LaSalle Investment Management K.K.
- Risks related to dependence upon or conflicts of interest with interested parties of LaSalle Japan
- Risks stemming from an absence of legal restrictions on insider trading
- Risks related to revisions of LaSalle Japan’s investment policy
- Risks from bankruptcy or deregistration of LaSalle Japan
(4) Risks Related to Real Estate and Trust Beneficiary Interests
- Risks related to flawed or defective property
- Risks related to lease agreements
- Risks from disaster-induced property damage, loss or deterioration
- Risks related to owner’s liability and expenses for repairs and maintenance
- Risks related to real estate-related laws, regulations and ordinances
- Risks related to the enactment and revisions of laws and ordinances
- Risks from impact of seller bankruptcy
- Risks related to subleasing
- Risks related to master lease contracts
- Risks related to property usage by tenants
- Risks related to joint ownership of property
- Risks related to compartmentalized ownership of property
- Risks related to property on leased land
- Risks related to leased property
- Risks related to property on development
- Risks related to existence of toxic substances at properties
- Risks particular to possession of trust beneficiary interests in real estate
(5) Risks Related to Taxation
- General risks related to maintaining conduit status (pass-through taxation treatment)
- Risks related to insufficient payment of required distribution amounts owing to differences between financial accounting and tax accounting
- Risks related to conduit status in terms of borrowings
- Risks related to LaSalle Japan’s inability to exercise control over family-owned corporation (close corporation) requirements
- Risks related to LaSalle Japan’s inability to exercise control over the number of unitholders
- Risks related to ex post facto nonfulfillment of distribution requirements due to correction resulting from tax inspection
- Risks related to non-eligibility for favorable taxation rates associated with property acquisition
- Risks related to revisions to the general tax regulation
- Risks related to the application of asset-impairment accounting
(6) Other Risks
- Risks related to property appraisals
- Risks related to inability to acquire planned property