Buying Office Buildings : Mid-Size Japanese Firms Enter Southland Market

A new kind of Japanese mid-size import is making it big in Los Angeles.

These are mid-size Japanese firms, and they’re buying office buildings in price ranges and in locations that are new for Japanese investors.

Michael Zietsman, senior investment associate with the Los Angeles office of Jones Lang Wootton USA, says that while these firms may have sales of $100 million or more, that’s mid-size when compared to Shuwa, Mitsui or the other Japanese firms that have been investing here.

“These mid-size firms may be in businesses like chemical manufacturing or building supplies. In Japan, they generally don’t invest in real estate,” he said.

They’re buying office buildings in the $15-million to $50-million price range,” Zietsman says.

The larger firms have budgets that start at $50 million and go up to $300 million or more.

And while the larger Japanese firms have focused on downtown buildings, the new investors are buying in Beverly Hills, the Westside and Orange county.

“Our Tokyo office is sending us one or two delegations a week of senior officers representing these mid-size firms,” Zietsman says.

“It’s significant to note that these delegations are coming here with the primary intention of buying in Los Angeles, with San Francisco as their next alternative.”