Real Estate: Rising Sun in Manhattan

It is hardly headline news anymore when a Japanese company opens a plant in an American town to make television sets or trucks, cars or VCRs. Recently, though, Japanese firms have been taking on a new mantle, this time as big-time U.S. landlords. Last week Mitsui Real Estate Development snapped up one of the best-known office towers in the U.S., paying $610 million for the Exxon Building.

The deal almost matches the acquisition of Los Angeles' ARCO Plaza by Shuwa Co. of Tokyo in September for $620 million. Shuwa also recently purchased New York City's ABC building (price: $174 million). Japanese investments in U.S. real estate could reach $5 billion this year, more than three times the 1985 level. Main reason: the dollar has weakened by 38% since early 1985 against the yen, making even tall American office towers a relative bargain.