Japanese Owners - American Managers

By White, Janet | Journal of Property Management, January-February 1990 | Go to article overview

Japanese Owners - American Managers


White, Janet, Journal of Property Management


Japanese Owners--American Managers In only a few years, the Japanese have become a major investment, finance, and development force in the United States real estate industry, ranking fourth in total ownership among foreign investors. Their equity investments, debt financing, and sole and joint-venture development activities now include all types of property, notably hotel and hospitality projects in Hawaii and on the West Coast, residential and mixed-use properties from coast to coast, as well as industrial and corporate facilities constructed by Japanese manufacturers for their own use.

From the first tentative moves by a handful of Japanese investors in U.S. real estate in the mid-to-late 1970s, to the headline-making buying sprees of today, the focus has been on high-profile commercial properties--especially so-called "trophy" office buildings in the major markets of New York, Los Angeles, Atlanta, Washington, D.C., and Chicago.

James Montanari, senior vice president of the national brokerage and management firm, Cushman & Wakefield, Inc., says that Japanese investment activity in U.S. real estate currently totals about $20 billion: $1.9 billion in pre-1985 activity, $0.5 billion in 1985, $4.8 billion in 1986, $6.8 billion in 1987, between $5 billion and $6 billion in 1988, and a projected $5 billion to $8 billion in 1989.

According to the property management executives interviewed for this article, several factors have made it not only prudent, but essential, that Japanese owners, investors, and developers rely on local American property managers to handle the day-to-day supervision of their newly acquired or developed properties. These include:

* the size and scope of their activities, in terms of huge financial commitments, diversity of property type, and wide geographic range;

* the enormous differences in social and business cultures, language, ownership and management standards, and the two real estate markets; and

* their relatively small, and often overwhelmed, U.S. staffs.

Differing concepts

of management

Much has been written about the overall Japanese approach to real estate investment and acquisition--their long-range outlook and desire to form lasting relationships with property firms, their general unwillingness to sell a property once it has been acquired, and their eagerness to learn as much as they can about our markets and our business methods.

But, these experts say, learning the American way of property ownership and management will not be quick or easy for America's newest owners because their reference framework of real estate management practices is so radically different than it is in the U.S.

Montanari notes that in America, there is a long, evolutionary history of property management services in which an agent serves as a representative of the owner, but that this is not the case in Japan.

"The concept and practice of property management itself is a whole new phenomenon to the Japanese," he says. "What do property managers do? How do they get paid? What expenses do they bear? What liabilities do they bear for the performance of the building, for accidents, and for things that we take as intuitively obvious because we have grown up in the business?"

Montanari says that Japanese owners must wrestle with issues that domestic and other foreign investors who are familiar with American management methods often take for granted.

"If I'm accustomed to running my building myself, and I have done it successfully in my home market of Japan, then I must not only understand what the U.S. property manager does, but understand why I, as the owner, can't do it myself here.

"Or, how much responsibility do I bear, and how much does the property manager? Do I have to tell him to unlock the door every morning or is he going to do that? Do I have to pay the property taxes or does he? …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Japanese Owners - American Managers
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.