Japan may be returning to the ranks of New York’s top foreign investors. Japanese real estate giant Mitsui Fudosan is planning to invest between $2 billion and $3 billion in Manhattan real estate over a span of the next several years.
Many in the real estate industry believe the sum itself could be large enough to boost Japan back up the ranks, reversing a decades long decline in importance in relation to countries like China or Brazil. The company is negotiating for two major development projects in Manhattan that total more than 1 million s/f. Specific details about the projects have not been released at this time. The developments are said to be part of a strategy to expand Mitsui Fudosan’s holdings by 2017. Fudosan hopes the move will help his company become a more globally diversified organization.
Most notably, the company owns 2.3 million s/f of office space at 1251 Avenue of the Americas and 200,000 s/f in 527 Madison Avenue. Not the only holdings in New York City, last fall Fudosan’s company sold 100 William Street to Manulife, a Canadian insurance firm, for $170 million, $10 million less than what they paid for the building back in 2007.
The investment boom of the late 1980s saw Fudosan buying high profile properties in addition to 1251 Avenue of the Americas, such as the Empire State Building and Rockefeller Center, making them the most active foreign investors in Manhattan at the time. The burst real estate bubble in Japan ended the investment boom. Though many large investors were bankrupted, putting the Yen’s exchange rate in a tailspin, Fudosan held on to 1251 Avenue of the Americas while other Japanese investors left the market. The decade long economic stagnation has made Japanese investors slow to return. Since then the growth in foreign investment has mainly been driven by China, Canada, Brazil and Norway as Japanese investors continued to hold back. All that may change now with Fudosan’s investment plans.
Though 2013 saw Japanese investors coming back to the New York City market, with $21 million worth of office properties bought in Manhattan, the numbers showed Japanese investors were still far less active than other foreign investors such as Canada with $893 billion, Norway with $884 billion, Singapore with $680 billion and the UAE with $650 million. This could all change as Japanese investors position themselves for a substantial return. It could very well make competition among commercial buyers in Manhattan fiercer than it has been in years.
This blog is brought to you by: http://www.blurealtygroup.com