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FIRST CAME Europeans, financing big-city construction projects and industrial development. Then came the Arabs, flooding the banks with their petrodollars. Lately it's been the Japanese, gobbling up stocks, prime real estate and multimillion-dollar companies.
Not since the last century, when the British bankrolled construction of the New World's railroads, have foreigners owned so much of what Americans hold dear. Nor have they amassed as much with such breathtaking speed.
In little more than three years, the juggernaut of foreign investment has changed New York's business landscape. Twenty percent of Manhattan's commercial office space is owned by foreigners. The Japanese alone tripled their holdings to more than $5 billion since 1986. In that same period, a wave of takeovers transformed the city's signature industries of publishing, advertising, financial services and retailing. Since 1986, overseas interests have spent $32 billion to buy New York-based companies, a sum about equal to the 1988 profits of the top 10 Fortune 500 companies.
| Hardly a week passes without a foreign company - usually |
| Japanese - bagging another New York-based trophy. Just this |
month, the Japanese real estate giant, Mitsubishi Estate Co., agreed to buy an $846-million majority interest in the Rockefeller Group. Among the group's holdings is one of New York's more cherished landmarks, Rockefeller Center, ice rink and all.
Although the Japanese don't really own the Center (most of it is expected to wind up in the hands of public investors), the deal set off alarm bells in Washington, where Congress has expressed concern that foreigners are acquiring too much U.S. property. But local officials and economists are convinced that the inflow of overseas capital - even when management is foreign-controlled - is good for the economy.
"I don't think xenophobia is appropriate at this stage of the game," said Rosemary Scanlon, chief economist for the Port Authority of New York and New Jersey. "I don't think it really matters to New York who owns what. What matters is the constant flow of investment."
Real estate experts predict a new tide of foreign buyers is coming close on the heels of the Japanese. Already Swedish and Korean companies, freed this year from domestic investment controls that barred them from buying foreign property, are scouting for opportunities. Investors from...