Japanese Capital Floods NYC Multifamily Market

Japanese investors are rapidly becoming the dominant foreign buyers in New York City real estate, and a lifeline for aging multifamily walk-ups.

Japan-linked firms have acquired at least $2.1 billion worth of New York City property since the start of 2024, according to analysis by Okada & Company and TRD Data. While much of that capital has historically chased trophy office and retail assets, a growing share is now flowing into smaller multifamily deals, boosting a sluggish investment sales market.

TRD’s analysis found Japanese buyers snapped up 326 multifamily units across $233 million in deals over that period. According to brokers, activity is concentrated in the $5 million to $15 million range with a focus on relatively clean buildings free of regulatory headaches.

The surge marks a sharp change in the foreign capital landscape. “It’s probably 90-plus percent from Japan,” Avison Young’s Brandon Polakoff said, noting that buyers from China, Europe and Canada once competed heavily in the city.

The drivers are both macroeconomic and tactical. U.S. real estate offers significantly higher yields than Japan, where interest rates remain comparatively low. Free-market multifamily cap rates in New York — hovering around 5 percent — look especially attractive against Japan’s roughly 2.4 percent 10-year treasury.

At the same time, Japanese investors can often borrow more cheaply at home, giving them a competitive edge in bidding.

But a key — and more unusual — incentive lies in Japan’s tax code. Older wood-frame buildings can be depreciated on an accelerated schedule, sometimes in as little as four years, creating an effective tax shelter. That quirk has made New York’s stock of aging multifamily particularly appealing, especially where the building value outweighs the land.

The trend echoes Japan’s high-profile U.S. buying spree in the 1980s, though market participants argue today’s underwriting is far more disciplined. Investors have also re-entered the office market in recent years, with deals like Mori Trust’s stake in 245 Park Avenue helping establish post-pandemic pricing.

Now, as capital rotates into smaller multifamily assets, Japanese buyers are emerging as a crucial source of liquidity — not for skyline-defining towers, but for the city’s bread-and-butter housing stock.

In case you didn’t hear from *NSYNC, it’s May. And just like the boy band, the real estate world is turning with no strings attached.

What is Gary Barnett’s secret plan for the Friars Club?

Gary Barnett’s Extell Development acquired the six-story Friars Club at 57 East 55th Street for $19 million from Kairos Investment Management, overcoming bids from a hospitality operator, foreign consulates and a group of crypto investors.

The acquisition is likely linked to Extell’s ongoing assemblage of properties on Park Avenue between 54th and 55th Street, but the club’s location is across the street and its facade is landmarked, meaning it cannot be torn down for new development.

Speculation on its use includes renovating the space into a private residence or another members-only club, or offering it as a new home for the elite private club, The Brook.

As legal challenges mount, what’s next for the Chetrits?

Meyer and Joseph Chetrit’s problems continue to mount, including a growing number of defaults and numerous legal judgments, such as a $132 million court-ordered judgment to Maverick Real Estate Partners and a $39 million judgment related to fire damages at fashion designer Reem Acra’s property.

The family’s real estate operations have appeared disorganized in court filings. This disorganization led to the law firm Baron Samson seeking to withdraw as counsel, citing an inability to trust the information provided by the Chetrits.

Despite the issues, the family secured loan workouts and extensions totaling billions, which include properties like the Empire Hotel, Yorkshire Towers in New York and projects in Florida.

Aby Rosen refuses to check out of 11 Howard hotel

RFR Holding is refusing to vacate the 11 Howard hotel in Soho, despite its landlord, German asset manager Commerz Real, claiming the company stopped paying rent in March 2024 and owes up to $42 million in unpaid rent, taxes and fees.

RFR’s defense for not vacating is based on a separate legal action where they claim Commerz is obligated to sell the property back to them under a prior agreement, a case they are appealing.

The Civil Court trial ended with Judge Betty Lugo-Martinez ordering both sides to submit briefs and urging them to reach an out-of-court settlement, citing concern for the livelihood of the hotel’s 108 employees.

SL Green partners with Hyundai to lease Tribeca office

Hyundai is partnering with SL Green to lease its 109,000-square-foot office building at 15 Laight Street in Tribeca, New York, which the Korean automaker bought in 2023 for $247 million but never moved into.

SL Green invested in the property through its $1.3 billion debt platform and will handle asset management for the building.

The property is being leased in a surging market, attracting interest from several large technology firms due to its desirable location near major offices of Google and Disney in the Tribeca/Hudson Square submarket.

Nussbaum bankruptcy sparks blowout with lawyer

Sheldon Eisenberger, the attorney overseeing Nussbaum Lowinger’s wind-down, is challenging Mark Nussbaum’s recent Chapter 11 bankruptcy filing, claiming it is an effort to evade state court proceedings and continue to defraud creditors who are owed over $400 million.

Eisenberger’s filings allege that Nussbaum is facing imminent federal criminal charges, revealing that he had pre-indictment plea talks with the U.S. Department of Justice for mortgage and escrow fraud.

The dispute has widened to include Nussbaum’s allies: Eisenberger has sued his civil attorney, Ethan Kobre, for allegedly diverting assets, and has accused the new chief restructuring officer, Ephraim Diamond, of bias.