Japanese Investors No Panacea For Trump's Troubles With PM-Trump
Jun. 27, 1990
TOKYO (AP) _ As the clock winds down on Donald Trump's immediate financial problems, the flamboyant landlord and developer faces a possibly much more lasting problem: How to win back Japanese investors.
Japanese doctors, businessmen, even well-paid stewardesses flush with savings and land riches from sky-high Japanese real estate prices, led a wave of investment in condominiums and other small properties in the United States during recent years.
Trump was one of many who exploited the trend, attracting Japanese funds to help finance his purchases of apartment buildings, hotels and casinos. He also has cashed in on the notorious Japanese preference for brand-name goods.
But Tokyo real estate agents say an increasing number of investors are repelled by Trump's highly publicized financial and marital troubles, his disparaging comments about Japan, and - most of all - high prices for Trump condomiums in the depressed New York market.
''The value of Trump is going down,'' said Wataru Iwamura, a sales representative for overseas projects at Haseko Corp. The firm is a Japanese developer and seller of condominiums and a sales agent for Trump properties.
''I think it started from the divorce thing. Now they are talking about bankruptcy,'' he said. Besides, ''Trump is not saying good things about Japan. That does not help at all.''
Not all agents agree. Some say Japanese will continue to buy his properties for their prime locations, regardless of what happens to his family life and personal fortune.
Trump has touted his properties in Japan in person, in print and on the water. In addition to taking out Japanese-language print advertising, he appeared in person at a Tokyo hotel to promote his properties and sent his plush yacht, the Trump Princess, cruising for a buyer through Japanese waters. The yacht left without taking down its for-sale sign.
Trump also has tapped Japanese banks for financing. A report in the Nippon Keizai Shimbun, Japan's premier financial newspaper, claimed Trump owed a third of his debts to Japanese banks.
It was not only relentless self-promotion that drew Japanese investors to Trump's properties, some agents say.
''When he built Trump Tower, at the same time, Japanese were putting their money into condominiums and Trump had good condominiums,'' said Seishi Matsuo, general manager of the international marketing department of Kyodo Advertising Co. The company is publisher of a magazine for investors in overseas property.
''Japanese are looking for location. At the Trump Tower, the Trump Parc, the location is very good,'' said Hisao Yamamoto, vice president of House Port Seiyo, a brokerage that handles Trump properties.
Brokers said the slump in the New York real estate market, rather than Trump's problems, has sent would-be Japanese buyers looking for more promising buys in other parts of the United States, such as Seattle and California.
Interest in Europe also is growing, with the approach of German unification, the 1992 Common Market consolidation, and the 1992 Olympics in Barcelona, Spain.
But even if the New York real estate market recovers, some Japanese buyers will not be interested in the Trump brand name at current prices. Trump Palace condominums start at $350,000 for a studio, or about the same price as a one- or two-bedroom apartment in some other Manhattan buildings.
''The Japanese are studying the U.S. real estate. They learned that Trump property is quite expensive compared to other (property),'' said Masayuki Kusunoki, of Nomura Real Estate Development Co.
But there is a bright side for would-be investors.
''He's in a bad position now, so maybe investors could take advantage of it,'' Iwamura said.