Akira Mori, Japan's richest man, spent a record ¥231 billion buying Tokyo's Toranomon Pastoral Hotel last September. He now says it's worth closer to ¥200 billion.

"The boom we've enjoyed for the past few years is over," said the 71-year-old chief executive officer of Mori Trust Co., who teamed with K.K. DaVinci Advisors, a ¥1.2 trillion Tokyo-based property fund, for the acquisition. "Investors were convinced that prices would keep rising, so in about six months, they'll probably rush to get out regardless of price."

Global real estate financing has evaporated as defaults by U.S. homeowners saddled banks and securities firms with $232 billion of losses and asset writedowns.