NEW YORK—The real estate market in New York City is stable and is only gaining strength.
With incoming capital from the Asian markets expected to rise dramatically within the next year, Sumitomo Real Estate New York’s new Capital Consulting (SCC) Service is well positioned to help investors specifically.
“We felt there was a need, especially at a time when banks are often reluctant to lend money and opportunities still exist due to the Great Recession, to launch a new service that takes advantage of Sumitomo’s strong cash position,” says Ralph McElvenny, principal of Sumitomo International Realty (SIR) Department in New York. McElvenny will co-lead SCC.
The Japanese headquartered firm’s New York branch, located in Midtown Manhattan, is a full service real estate company. The global company, Sumitomo Real Estate Sales, has 200 offices in Japan, a transaction volume exceeding $8.5 billion and revenue of $571 million in 2013. Sumitomo N.Y. has, since its inception, provided quality services to overseas buyers and relocating clients, and has grown with the market.
McElvenny recently co-brokered a sale at 54 E. 64 St., obtaining a large townhouse in one of the most desirable areas of the city for $18 million. While SIR is focused on selling real estate, SCC will focus on reviewing deals to connect existing and future clients with financing and investment capital.
“We feel the New York City market is becoming strong, and now it is the time for sellers,” says SIR principal Mie Iwatsuki. One of SIR’s goals is to connect New York City sellers with buyers from the Asian market. China alone has moved $225 billion out of the country this past year, according to the Wall Street Journal, despite the $50,000 yearly limit, and this trend is expected to continue upward.
“The Sumitomo name is well known, especially in Asia, and I speak English, Japanese, and have a working knowledge of Chinese,” Iwatsuki said. Sylvia Zhang, another SIR team member, is fluent in Mandarin and English, and Iwatsuki expects the firm to have a strong advantage in attracting overseas clients.
Sumitomo (N.Y.) offers services in management, marketing, leasing, real estate brokerage, and financing of commercial and residential properties in New York. The company has completed such deals as the development and sales of the Millennium Tower to Tishman Speyer.
“We maintain contact with a number of large funds and wealthy individuals, such as a number of hedge fund managers … or international real estate investors,” Iwatsuki said. “Some of our investors are based in Tokyo and are funded by our parent company in Japan, which invests through them.”
Sumitomo (N.Y.) has been operating in the United States since 1987, but its roots run 400 years deep as a part of the Sumitomo Realty & Development Group based in Japan. Sumitomo Development owns over 500 buildings in Tokyo, putting them alongside Mitsubishi and Mori as one of the top three property owners in the city.
Sumitomo Real Estate Sales New York in the early 1990s was seen as the go-to agency for the Japanese market, selling more than 100 units at the World Wide Plaza to Japanese clients.
“We’re seeking deals in the range of $10 million to $150 million,” McElvenny said. “Our preference is existing properties in the New York City area. If the property is in bankruptcy, we’ll have to evaluate the deal. We prefer properties near the end stages of the bankruptcy process, so there’s some understanding as to the timeline and litigation costs related to the purchase of the property.”
McElvenny says Sumitomo (N.Y.) is potentially interested in development properties here as well, but they could require more evaluation.
“Besides this larger practice, we also maintain relationships with foreclosure experts. [We also look at] deals ranging from $1 million to $10 million, so investors looking in this price range are also welcome to contact us,” Iwatsuki said.
In addition to referring investors to possible sources of funding, SCC will also evaluate deals for possible investment by Sumitomo itself.
Sumitomo Real Estate Sales (N.Y.), Inc.
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