Japanese Investors Return with $1.5 Billion


“Valuation pressures in commercial real estate are rising as commercial prices continue to increase rapidly.” That’s what Federal Reserve Chairwoman, Janet Yellen noted in testimony to the House, highlighting frothy real estate prices as an area of concern.

But her fears are still unfounded.

There is no bubble in commercial real estate… not with the continued inflow of capital from foreign and domestic investors. And even if prices eventually decline, though, limited supply of property will ensure the drop isn’t substantial.

Commercial real estate remains a hot investment.

In fact, it’s why investors from Japan are back for another look.

I’m sure you remember when Japanese investors purchased trophy, Class-A properties in the United States, only to find themselves retreating with heavy losses.

Nowadays, they’re back, hoping to recoup.

In fact, over the last year, Japanese real estate firms have reportedly bought $1.5 billion worth of property in New York City. That includes a $247 million office building, and a stake in an office tower under development.

“It’s only recently that Japan has emerged from the sidelines,” reports The Wall Street Journal. “According to Colliers International, Japanese companies purchased only $212 million of New York office buildings in 2013, compared with $1.4 billion spent by Chinese companies. In 2015, Japanese companies have already invested $625 million and now rank fourth in foreign investment in Manhattan office space this year.