Real estate development business in the United States
Residential land development stretching over 2,400 acres
In Houston, Texas, the fourth largest city in the United States, a large-scale residential land development is under way.
The size of this residential land, which is to be divided into 2,880 lots, is about 2,400 acres roughly the same size as Tokyo's Chuo-ku. Under the development, the land will become a complete town with elementary and junior high schools, commercial facilities, and a 400-acre man-made lake. Development is expected to take around 15 years.
We are capable of undertaking such a large-scale development due to the strong trust and the U.S.-wide networks we have established through the continuous business experience in the U.S. real estate market.
It was in 1982 that Sumitomo Corporation made full-scale inroads into the U.S. real estate business. Our first move was to acquire an existing office building in New York City to be used as the headquarters of Sumitomo Corporation of America. Later, we expanded into residential land development, and ever since our U.S. real estate business has stood on two pillars—office building management and residential land development.
Our turning point was in the 1990s when we launched a residential land development business located in the northeastern suburbs of Atlanta.
Some residential land developments take the form of what is known as the Master-Planned Community, which is a large community built in a manner that enhances the property value of the entire town by encompassing everything from a golf course to man-made lakes and other amenities. Our first residential land project in the United States, which was located in Atlanta, was a Master-Planned Community, in which a golf course and other amenities were constructed along with 2,200 land lots for housing, resulting in a town with extremely high value. Judging from the fact that the houses built by home-building firms after the land lots had been sold were the highest square foot price in the area. The community was successfully received as a quality residential town.
Building on this success, we are currently undertaking a large MPC land development project in Houston Texas.
Developed area in Huston, Texas
HAMILTON MILL (Atlanta, Georgia)
Our strength as a integrated trading company
Entering the real estate industry, which is a typical domestic industry, is not easy for non-local firms, especially firms based overseas. The key to success, therefore, is forming partnerships with local firms well-versed in the region's real estate trends. Sumitomo Corporation teams up with prominent local developers as partners for developments in Atlanta, Houston, and other areas. Successfully finding a good partner can be said to be the most important factor in undertaking overseas real estate operations.
This is exactly where our business networks developed as a general trading company come into use. Such business networks are not possessed by firms specializing solely in real estate. In addition, what makes Sumitomo Corporation so unique among other trading firms is the fact that it takes on residential land development projects, which are extremely long in duration. Such projects typically take 10 or more years, during which, of course, economic fluctuations occur. Sumitomo Corporation steadily implemented land development in Atlanta without losing focus. Our reputation and trust earned through projects we have done over 20 years can be used as leverage in finding future partners, eventually leading to even larger business activities.
Visiting site with a local developer (Huston)
The same applies to our office building management business, which constitutes the other pillar of our business alongside residential land development. Presently, we own two office buildings, one in Washington, D.C. and one in San Francisco.
Real estate business is largely dependent on information. When selling or acquiring office buildings, the key to success lies in prompt access to information on high-quality properties. Sumitomo Corporation has excellent information-gathering expertise, which is underpinned by the strong trust gained as a result of conducting real estate business over many years without pulling out even when the U.S. economy was sluggish.
"In the United States houses are expected to last a hundred years, unlike in Japan where they are rebuilt after 20 to 30 years. In response, we undertake real estate business from a long-term perspective." This is our U.S. real-estate business policy.
The population of Japan is projected to decrease significantly in the coming years. As one measure to overcome this adversity, we are determined to proactively engage in real estate business not only in the United States but throughout the world. Nearly 30 years on from our entry into the United States, we have almost managed to establish the foundation for this move.
Furthermore, real estate business makes up Sumitomo Corporation's roots. Sumitomo's spirit of "placing prime importance on integrity and sound management" is clearly evident in our U.S. real estate business.
(left) 1750 K in Washington, D. C.; (right) 123Mission (San Francisco, California)
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