For Sale: America

"Everything here is so cheap!"

-- A Japanese real estate agent visiting Manhattan

"The political issue of the 1990s is going to be the foreign invasion of the U.S."

-- Paul Krugman, M.I.T. economist

It was an unlikely stop for sightseers, but there they were: two carloads of serious-minded, dark-suited Japanese in a deserted parking lot in Chattanooga, Tenn. Each carrying a packed briefcase, the visitors gazed long and intently at the object of their interest: a rusted, run-down manufacturing plant as big as five football fields. The plant was obsolete and abandoned, but the Japanese were delighted by their discovery. Taking pains to conceal their satisfaction, they peered into the distance and busily scribbled in their notebooks. Later, after several trips back, they bought the forlorn plant. Today, after a $27 million investment, the refurbished factory has become a manufacturer of heavy earth-moving equipment for Japan's huge Komatsu conglomerate.

Such scenes are taking place all over America today, as other foreign scouting parties comb the highways and byways on the lookout for profitable finds. The searchers are Japanese and British, Canadian and South Korean, West German and Swiss, and all of them have one thought in mind: Buy! Buy! Buy! They are in search not only of factories but also of skyscrapers, shopping malls, farms and forest land, ski resorts and vineyards, refineries and mineral deposits. They have already bought some of the biggest and best-known corporations in the U.S., and their appetite appears to be gargantuan.

Suddenly, the U.S. seems to have become a country for sale, a huge shopping mart in which foreigners are energetically filling up their carts. Result: foreign ownership in the U.S., including everything from real estate to securities, rose to a remarkable $1.33 trillion in 1986, up 25% from the previous year. By contrast, in a complete reversal of the situation only a decade ago, U.S. holdings abroad now total only $1.07 trillion. In addition to spurring fabulous hikes in real estate values and igniting corporate takeovers, the wave of foreign purchases has become an important force behind Wall Street's stratospheric bull market.

Never before have U.S. citizens witnessed so many familiar American landmarks and trademarks passing into foreign hands. Japanese investors last December bought the Exxon headquarters building in Manhattan's Rockefeller Center for $610 million, the highest price ever paid for a Manhattan skyscraper. The British, who burned Washington in 1814, have now built or bought an estimated $1 billion in District of Columbia property, including part ownership of the famed Watergate complex. Esteemed U.S. corporate nameplates are also changing citizenship at a rapid clip. Doubleday books has gone to the West Germans, Brooks Brothers clothiers to the Canadians, Smith + & Wesson handguns to the British, Chesebrough-Pond's consumer products to a Dutch-British combine. General Electric television sets have been bought by the French, Carnation foods by the Swiss, General tires by the West Germans.