Jones Lang LaSalle


Japanese seek plums in midtown office market
Mitsui Fudosan hires U.S. executive to lead big acquisition push; beautified barbershop

Published on February 13, 2006

Japanese real estate company Mitsui Fudosan Co. is ramping up its efforts to acquire U.S. properties, focusing on office buildings in midtown Manhattan and in Washington, D.C.
The firm has hired Graham Bond, a former Morgan Stanley executive, to spearhead the effort as chief operating officer of Mitsui Fudosan America Inc.

The company's U.S. arm has long wanted to build up its presence, but it has not made a move to do so in years. Mitsui Fudosan America bought 1251 Sixth Ave., a 54-story building in Rockefeller Center between West 49th and West 50th streets, for $610 million in 1986. In 2003, it sold 461 Fifth Ave., at East 40th Street, to SL Green Realty for $62.3 million.

"Previously, the strategy to acquire properties in the United States was not such a commitment as it is today," says Mr. Bond.

Mitsui Fudosan is aiming to increase its assets under management globally to $30 billion by early 2009 from $18 billion today, with U.S. properties making up a significant portion of the portfolio, he adds.

The company plans to make its first U.S. acquisitions as a principal investor; eventually, it will create a real estate fund through which to acquire buildings. The fund could take the form of a private real estate investment trust for Japanese investors, which would be the first of its kind.
"Our goal is to start the program in earnest, to get the ball rolling and re-establish our credibility as a meaningful buyer in this market," Mr. Bond says.
--Julie Satow