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Why Companies That Have Been Hurt by the Japan Earthquake Will Need Your Help

By Jim Gillespie | March 30, 2011

I live in earthquake country here in Southern California. And I’ve been through a lot of them, including the Northridge earthquake back in 1994 that collapsed the Santa Monica Freeway, making it necessary for me to drive on side streets for several months to get to and from my industrial real estate territory.

But what I’ve experienced in all of these earthquakes doesn’t compare to the one earthquake that just hit Japan. And the fallout from the earthquake and how it will now affect businesses both in Japan and here in the U.S., will never compare to what I’ve experienced either.

Japan is a country with the world’s third largest economy as measured by gross domestic product (GDP), behind both the United States and China. And Japan does a ton of business with the United States, too, which is evidenced by the strong presence of Japanese companies in locations all over the U.S., and the strong dependence of U.S. businesses on Japanese components and products.

But while the U.S. media is mainly focused on discussing the radiation coming out of the nuclear reactors in Japan, and whether or not that radiation poses a threat to us here in the U.S., they’re completely missing the big picture. The economy of Japan is being devastated by the earthquake and its aftermath, and the impact of this devastation will be felt here in the U.S., too, within the coming months.

I was talking to a reporter who lives in Japan, and here’s what he told me:

"Tokyo now has 30%% less electricity than it had before the earthquake, and they’ve implemented rolling blackouts within the city. Blackouts that may need to be in effect for one full year."

And the reporter then began reading a list of the Japanese companies who were suspending or slowing down their operations, and the list read like a "Who’s Who" of Japanese corporations. And in terms of the potential impact of all of this here in the U.S., read this article and you’ll see that Toyota is telling its U.S. plants to prepare to shutdown. And reading this other article will tell you about the impact that’s now facing the entire automobile industry because of all that’s happened.

And what I’ve just mentioned involves just the automotive industry. Now imagine what may be involved around how all of this may impact both the computer and the electronics industries, and other industries, too.

With the shutting down of their nuclear reactors, all of the power that was generated by those reactors is no longer available. So replacing this power instantaneously just isn’t possible for them, and replacing all of this power is going to take a long time. So despite the massive disruption from the earthquake and the damage that it’s caused, Japanese companies don’t have the same amount of electricity available to them anymore, and this will have a big impact on their ability to manufacture products.

With this in mind there are people who are most likely going to be needing your help within the coming months, and here is a list of some of the people and companies you may want to be in close contact with, to see if they need your assistance:

1) Companies that are headquartered and based in Japan

2) Companies whose business relies on products, parts, or components that are manufactured in Japan

3) Japanese companies that are owner/users of their own facilities, as they may gravitate towards doing sale/leaseback transactions

4) People and organizations who may be invested in commercial real estate in Japan, as this may now impact their desire to buy or sell commercial real estate here in the United States

5) Owners of properties occupied by Japanese companies, as this may now cause shifts and consolidation in these companies’ plans for occupying commercial real estate

What’s happened in Japan is difficult for many of us to comprehend, and it’s something that none of us would ever want to have to live through ourselves. As a commercial real estate broker your business is about providing service, and your income is often commensurate with the quality of service you’re providing.

So pay attention, as the time may be here right now when you’re able to be of great service to the people who will really need you. 

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