The only company authorized by the Ministry of Construction to use steel framing in commercial or residential construction is embarked on a major expansion effort. Los Angeles-headquartered AMERICAN SILVERWOOD, INC. has worked in Japan since 1995, but it has found the going slow despite the cost, strength and fire-protection advantages of steel framing over American-style wood framing and especially over traditional Japanese construction techniques. To promote the use of steel framing in home-building, American Silverwood's subsidiary is tying up with 13 companies around the country. These distributors will cultivate relationships with local architects and contractors and license the U.S. firm's construction technique to interested parties. The American Silverwood affiliate also is forming a business development unit to make further inroads in the commercial construction field. It already has contracts from SKYLARK CO., LTD., Japan's top family-style restaurant chain, and two convenience store operators to build steel- framed outlets for them. American Silverwood thinks that it could build as many as 150 commercial facilities this year.
One of the largest commercial property managers in the United States is moving into the Japanese market. New York City's CUSHMAN & WAKEFIELD, INC. expects to have a 15-person subsidiary operational by early summer. Initial plans call for the staff to advise clients on the efficient use of space. They also will suggest ways that clients can boost property values that took a beating in the 1990s from the collapse of the asset "bubble." Recommendations on real estate investments are on Cushman & Wakefield's Japan agenda as well.
KENNEDY-WILSON, INC., one of the most active foreign real estate investors in Japan, added two office buildings with a combined value of $36.7 million to its portfolio. One property is in Yokohama. Its 86,000 square feet of space are fully leased. The other, an office building in central Tokyo with 27,000 square feet of rentable space, is 89 percent leased. For the near term at least, Kennedy-Wilson plans to continue to purchase buildings with strong cash flows and to hold these properties for five years or so. Given its use of low-cost nonrecourse yen debt, the Los Angeles-headquartered international real estate services business calculates that it can earn approximately 20 percent a year on its equity investments in Japanese buildings.
An exchange rate of ¥109=$1.00 was used in this report.aaaaaa