It is bringing back memories of the 1980s, when the grounds of the Tokyo Imperial Palace were being proclaimed as more valuable than all of the real estate in California. This proclamation was then famously followed by a quarter of a century of stagnation in the country's real estate sector. 

S&P said:

"Japan's real estate market is peaking out and ready to head down. Although the conditions in the office leasing market are solid, there are signs of a slowdown in corporate earnings, particularly among manufacturers. In addition, we expect major upticks in central Tokyo office building supply in 2020 and 2023."

Companies that are said to be most at risk include Mitsubishi Estate Co., Mitsui Fudosan Co., Sumitomo Realty & Development Co. and Nomura Real Estate Holdings Inc.

Low interest rates in Japan haven't prevented domestic lenders from seeing their profitability weaken, mostly due to lower net interest margins. These lenders have increased loans to developers because demand from other corporate customers is relatively weak.