End of Japan Buying Spree in U.S. Real Estate Forecast
After a buying spree for U.S. real estate ranging from prime office buildings to luxury Manhattan apartments in the past few years, Japanese investment appears to have reached a plateau.
“Tremendous amounts of money flew in in 1986 and 1987, and in 1988 from smaller Japanese life insurers, but I doubt that pace will continue in 1989,” said Hisato Doi, senior vice president of Sumitomo Life Insurance Co.
Japanese life insurers, a driving force of the investment surge, say they are finding fewer attractive, top-notch properties.
“It is becoming much, much harder to find properties which satisfy us. Owners of nice buildings won’t sell them,” said Masanori Yamauchi of Meiji Mutual Life Insurance Co. Ltd.
“The growth of Japanese overall investments in the U.S. has reached a plateau,” said James Mooney, managing director of Landauer Associates Inc, a real estate consulting firm.
There are no accurate statistics, but Japanese investment in 1988 is likely to match the $20 billion to $30 billion in 1987, Mooney said.
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