UPDATE 1-Sekisui House agrees to buy Tokyo property for $720 mln -sources
* Kokusai Akasaka Building deal expected to close by Monday
* Deal confirms revival in Tokyo commercial property market
* Land prices up in big Japan cities for 1st time in 6 years (Adds other property deals, trends in market recovery)
By Junko Fujita
TOKYO, March 28 (Reuters) - Japan's Sekisui House Ltd is buying an office tower in central Tokyo for 74 billion yen ($720 million), as property prices rise to levels that allow lenders to recoup losses from a bust that followed the global financial crisis.
The Osaka-based home builder has agreed to buy the 20-storey, 41-year-old Kokusai Akasaka Building in an upscale commercial and business district, according to four people briefed on the deal. The tower is largely occupied by affiliates of NTT DoCoMo Inc, Japan's largest mobile phone operator.
The deal, expected to close by Monday, confirms the ongoing revival in Tokyo's prime commercial property market after an ill-fated series of highly leveraged investments that failed spectacularly after a 2006-2007 real estate boom collapsed.
The value of the Kokusai Akasaka property had cratered after it was bought in 2006 by then-aggressive property investor K.K. daVinci Holdings for about 100 billion yen, almost entirely financed by debt.
Another daVinci property, an iconic office tower in south-central Tokyo's Shiba district, was bought last year by a group including United States insurance magnate Maurice "Hank" Greenberg's C.V. Starr & Co and Asia Pacific Land.
Investors are returning to the property market in Japan, where Prime Minister Shinzo Abe's aggressive government spending and loose-money policies have started to pull the economy out of 15 years of deflation.
Land prices in Japan's three largest cities - Tokyo, Osaka and Nagoya - rose for the first time in six years last year and declines slowed elsewhere, a government survey showed this month.
The debt behind the 2006 Kokusai Akasaka deal was packaged into 97.5 billion yen of commercial mortgage-backed securities arranged by Lehman Brothers, the investment bank whose failure triggered the global crisis.
When the market collapsed in 2008, investors could not make payments on the loans and the building's ownership shifted to a group of lenders.
A Sekisui House spokesman declined to comment.
The company largely relies on housing property for its revenue, earning just 2.4 percent of its 1.8 trillion yen in sales from office properties last year.
It owns the Osaka landmark Hommachi Garden City, Tokyo's Garden City Shinagawa Gotenyama and the Ritz-Carton, Kyoto building in Japan's ancient capital of Kyoto.
($1 = 102.1350 Japanese Yen) (Reporting by Junko Fujita; Editing by William Mallard, Edmund Klamann and Kenneth Maxwell)
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