In the go-go days of the 1980s, cash-flush Japanese investors were buying Big Apple properties like there was no tomorrow. But by the early '90s, a recession caused many of these Japanese investors to sell off their New York City holdings. Bucking the trend, Hiro North American Properties was one of the few Japanese real estate investors that held on to to its commercial portfolio and now thinks it might be a good time to unload one of its holdings — a 27-story tower at 650 Madison Ave.
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Experts say the building, which is a few blocks from Central Park, could sell for between $750 million and $800 million, making it one of the bigger real estate deals of the year. Despite the credit crunch, big commercial real estate deals are happening, albeit, at a slower pace, especially in big U.S. cities like New York, Los Angeles, San Francisco and Chicago. Only last week, Citigroup Inc. sold two of its office buildings in Manhattan for $1.5 billion.
Hiro acquired the building for $105 million in 1984 and added a tower to its lower base of eight floors shortly thereafter. The New York Observer says the owners are looking to make a quick sale.
And like some 20 years ago, the demand for New York City commercial real estate is still strong, and some even would say the demand is stronger. But now the Japanese have been replaced by oil-rich Middle East investors and deep-pocketed Europeans taking advantage of their strong currencies who want a slice of the Big Apple. — Gerald Magpily
See story from The New York Observer
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