Southland Realtors Beckon Asian Home Buyers : Links established with foreign firms to attract middle-class residential property investors.

Now that Asian buyers are purchasing California homes as well as commercial buildings, Southern California realtors are aggressively courting the foreign investors.

The latest in the trend is Fred Sands, who announced a few days ago that he reached an agreement to market his residential listings through the 100 offices of Sumitomo Real Estate Sales Co. in Japan.

Sands’ 3-year-old Pacific Rim Division has been recording transactions at a monthly rate of $12 million, he said, and he expects that to multiply as a result of his new affiliation. Sumitomo has a list of 2,500 Japanese clients interested in buying residential properties in California, he noted.

“And they’re interested in everything from Beverly Hills to Tarzana, because it’s not only the Japanese millionaires who are buying--it’s also their people in middle management.”

‘Still Seller’s Market’

Asian home buyers represent a vast, relatively rich source of investors to Sands and other realtors, who have observed soaring sales of residences to Asians in such cities as Alhambra, Monterey Park, San Marino, South Pasadena, Arcadia and Palos Verdes.

“They’re the icing on the cake,” Sands said. “The market is still very strong. Though there should have been a slowdown, there hasn’t been one yet.”

“It’s still a seller’s market,” agreed Kent Christensen, a Jon Douglas Co. vice president, “but we’re trying to get the best price and broadest exposure for our clients.”

That’s why the Beverly Hills-based firm has been distributing videos and literature on its listings since September through the Tokyo residential real estate firm, Ken Corp., which is setting up a Los Angeles subsidiary to develop California properties for Japanese home buyers and investors.

The Douglas company also just arranged with Misawa Homes Co., producer of 40,000 homes a year in Japan, to market California properties there through a Misawa subsidiary, which has 5,000 sales agents.

Middle-Class Buyers

“We’re not looking for purchasers of multimillion-dollar homes through this,” Christensen said. “We’re looking at middle-class Japanese buyers, because the middle class there often has $1 million to $2 million worth of equity in their homes.

“Middle-class Japanese realize they can do well to invest in California residences whether they use the homes or not, because the appreciation exceeds anything they can get with alternative investments.”

The Japanese also view California real estate as a good investment because it is inexpensive by Tokyo standards, which is one reason they are already invested heavily in Los Angeles high-rises.

“We saw the writing on the wall, with more and more Japanese investing here in commercial properties,” Sands said. “The next logical step was residential, because a 600-square-foot condo on the Ginza would cost $2.5 million. They look at our real estate as a bargain.”

Gina Bennett, a vice president and director of relocations for Coldwell Banker Southern California in Irvine, said her firm’s Asian buyers “are looking for good investments and for places for their kids to live while going to college here.”

Pre-Qualified Buyers

Through an arrangement made in January with Citibank’s Asian Banking Center West, she said, Coldwell Banker has been marketing its California homes in Japan, South Korea, Hong Kong, Taiwan and Singapore.

And Citibank has been pre-qualifying potential buyers of Coldwell Banker’s listings, said Brooks Barton of Coldwell Banker’s Beverly Hills office. “I’ve shown houses to potential buyers who have been pre-qualified to purchase single-family residences priced up to $50 million each.”

A Tokyo subsidiary of Citicorp, parent company of Citibank, also has been pre-qualifying Japanese buyers of California homes listed by Grubb & Ellis.

The Irvine-based firm teamed last fall with the Citicorp arm and the Tokyu Nihonbashi department store to show properties through videos and put them in escrow through a credit card with an initial credit line of $500,000.

Multilingual Staff

Coldwell Banker also has been working with a relocation management company in Tokyo, helping corporate transferees from Asia make the move to California. “Our relocation department here is the contact point for our Asian home buyers,” Bennett said.

Sands has opened a separate office for Pacific Rim clients in his firm’s Brentwood headquarters. It is staffed mainly by Japanese Americans. “Even the secretaries . . . are multilingual,” he said.

Merrill Lynch Realty just opened its International Marketing Center in Beverly Hills, adjacent to the international offices of Merrill Lynch, Pierce, Fenner & Smith.

“So we’ll be dealing with some high net-worth Asian individuals, because they have to have lots of money to work with Merrill Lynch International (stock brokerage),” said Richard (Rick) Merrill, regional president of Merrill Lynch Realty.

Investment Seminars

The center has a dozen Pacific Rim specialists, and there are plans to add six multilingual real estate agents to help negotiate agreements with corporations as well as individuals from such cities as Hong Kong, Taipei and Seoul besides Tokyo.

Merrill is leaving May 7 to speak at investment seminars in Tokyo, Hong Kong, Taipei and Seoul, where government restrictions were lifted a couple of months ago on the amount of capital that can be taken out of South Korea.

“Individuals couldn’t take out any (money) before, but now they can take out the equivalent of $2 million a year per person,” he said. South Korean companies can put up to $5 million a year into foreign real estate.

Merrill said most realtors don’t expect a big payoff on Asian residential investment until 1990 at the earliest.