Housing in N.Y. Is a Bargain--if You’re Japanese

Japan’s nouveaux riches are moving into New York’s most prestigious high-rises and luxury condominiums as the yen’s doubled buying power allows them to live out their dreams.

“The Japanese are buying more, and making more inquiries,” says Hiroko Suzuki, marketing director at the Metropolitan Tower, a luxury apartment house in mid-town Manhattan.

“They flock to mid-town. They eye high-rise condominiums with good views” and calculate the appreciation of such an investment over the long term, she said.

Luxury condominiums such as “Trump Tower, Trump Parc and Metropolitan Tower are their favorites,” adds Takeshi Furumoto, president of Furumoto Realty Inc.

New York-based realtors selling to the Japanese say the October stock market crash did not dampen the Japanese appetite for prime properties in the United States. Indeed, the Tokyo market recovered faster than any other as Japanese share prices soared to all-time highs last Thursday and again on Monday.

Japan Prices Higher

The Japanese are not the only buyers on the market, realtors rush to add. Many American, European and Hong Kong investors are snapping up expensive condominiums costing upward of $1 million, in part because Manhattan real estate prices proved to be solid investments after the frightening October stock market collapse.

But the Japanese have an added advantage. “Because of the yen’s strength, New York apartments must look cheap to them,” Suzuki said. Since September, 1985, the dollar has plummeted from 242 yen to less than 130 yen, slashing U.S. prices for Japanese buyers.

Suzuki said Japanese buyers easily put out between half a million dollars and $1.5 million for a tiny apartment with a Central Park view.

While Manhattan apartment prices sound astronomically high to other Americans, the same money fetches even less in Tokyo, where the price of land soared 68.6% last year after rising 21.5% the year before.

Fumio Sato of Haseko Realty Inc. has a client who recently purchased an apartment at 100 U.N. Plaza, an elegant address. “She will use it only three or four times a year when she comes for holidays,” Sato said. “It’s extravagant, but she likes New York,” he added.

Increasing Demand

Recently a Japanese-language magazine was created to help sell American properties to rich Japanese. About 20,000 of the first issues of the quarterly “Worldwide” magazine were mailed directly to Japanese investors, 50,000 were sold from bookstores in big Japanese cities and 5,000 in New York.

“Nowadays, Japanese clients know New York very well. Sometimes they know more than I know,” said Sato of Haseko.

In its second issue, due in May, “Worldwide” will feature detailed maps of New York and photos of the city to interest investors more than 8,000 miles away, says Bill Levine, sales manager of the magazine.

The Japanese demand for New York real estate is expected to keep growing as Japan’s economy grows stronger and stronger, making Japanese investors increasingly wealthy.

The 55-story Central Park Place, currently being built by Japan’s Kumagai Gumi Co. Ltd., has lined up 80 Japanese buyers who paid between $300,000 and $500,000 for each apartment.