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Show Accenl Also in this section: Gardening E2 Religion E3 Opinions E4 ID- LJIBftM:JMlK Soni. i Sunday . moo - i. - but U.S. tastes for property changing hungry Japanese - announcing plans to build luxury apartments in Los Angeles; forming a $154 million partnership Tishman with Los Angeles-base- d West Cos. in a London office building. Many observers say the Japanese were surprised last year by tree. But don't be deceived by fewer the harshness of U.S. reaction to deals. Those included deals. The Japanese appetite for U.S. investment re- Mitsubishi Estate Co.'s $846 milmains powerful, despite Japanese lion purchase of a controlling government pressure to tone down stake in New York's Rockefeller purchases and a nearly 40 percent Center, and Sony Corp.'s $3.4 bildrop in the value of stocks in that lion purchase of Columbia Pictures Entertainment Inc. country this year. In fact, the Japanese are makDespite the negative publicity, ing more U.S. investments than the Japanese still appear ready to ever, and more sophisticated buy U.S. landmarks if the circumones, as they become confident stances are right. tarThose acquainted with this enough to look past blue-chi- p month's deal for Pebble Beach, gets. "They're becoming insiders in where a round of golf can cost l, the United States," said Jack Drive $175 and the scenic a managing partner of the winds past the lone cypress, say competition was Los Angeles accounting firm Kenneth Leventhal & Co., which vicious between two final bidders, closely tracks Japanese invest- both Japanese. ment. Finally, businessman Minora Nowhere is that more apparent bought the Monterey proper.than in real estate, Leventhal's ty for more than $800 million specialty. Having moved from of- from a partnership including Bevfice buildings to hotels to resorts erly Hills billionaire Marvin Daand golf courses, the Japanese vis. But Davis' asking price was are now developing property, often in partnership with U.S. com- much higher, some say $1.2 bilpanies, here and abroad, Barthell lion. And Isutani is a special case. Because he owns an empire of said. While their total real estate golf clubs and sporting goods investment fell by 11 percent from companies in Japan and abroad, 1988 to 1989, to $14.8 billion, "the he can exploit Pebble Beach with and marketing volume of transactions was way tie-in- s of all sorts. up," Barthell said. So even the The Japanese also are moving price for from primary investment areas, Pebble Beach is not interpreted such as Honolulu, Los Angeles, as a sign of a new rush for San Francisco and New York, to megadeals. "The situations where a guy other metro areas and the subwalked around Manhattan or Wai-kiurbs. A Leventhal study showed that with a wad of money in his four-fiftof total investment was pocket and bought the first overin the primary areas in 1985; by priced property are gone," said last year, the figure was about Daniel Schwartz, managing director at Ulmer Brothers Inc., a New "We're finding the very distinct York investment bank specializing in deals involving the Japanese. move from the archetypical downtown trophy office tower to develResearch at Ulmer Brothers residential in shows the trend extends beyond oping single-famil- y the suburbs, or even apartments," real estate to investing in and Barthell said. buying out U.S. businesses. In the Another new target zone is Eu- first half of 1990, the company rope, where Japanese real estate counted 103 such mergers and investment last year was twice acquisitions. That compared with 74 in the first half of 1989 and 47 the level of 1988 and nearly 4 times that of 1987, according to in the same period in 1988. At the same time, the average Clark Whitehill, a British accountdeal size fell from $162 million in ing firm. A prominent example of the 1988 to $51 million this year. That trends is the Japanese subsidiary reflects the fact that the Japanese Shuwa Investments Corp., which increasingly are taking minority owns $2.7 billion in U.S. real stakes in U.S. businesses, often to estate. Shuwa led the charge into provide new capital, Schwartz office towers, buying the ITT said. "A lot of U.S. companies have Corp. headquarters in New York, the U.S. News and World Report found themselves in trouble, and building in Washington, the Arco the ones with money are overPlaza in Los Angeles, and the seas, the Japanese and EuropeQuaker Tower in Chicago. ans," he said. The Japanese also have become But during the past year, Shuwa made different kinds of headlines: quicker to back away from over- LOS ANGELES (AP) Japanese purchases of U.S. "trophies" such as Rockefeller Center and Columbia Pictures had slacked off until a Tokyo tycoon bought Pebble Beach Co., with its exquisite golf courses and lone cypress high-profi- le high-profi- le Bar-thel- le ni top-doll- ar ki one-thir- d. , Europe next stop for Japanese investors - The Japanese already have been stepping up their investand Manhattan office towers, the ments in Europe, with developJapanese now have a craving for ment and construction groups, investment firms and life insurance something European. The investment opportunities companies leading the way. are plentiful with European trade In European real estate alone, barriers dissolving in 1992 and potential new markets opening up Japanese investments totaled $5.5 with the dearth of communisim in billion last year, up from $3.1 billion in 1988. Eastern Europe. LOS ANGELES (AP) After gobbling up Hawaiian golf courses It was the simple life. In the we could before dark. We were my wife, Diana, and I made equally sensitive to, and thankful a decision that convinced both for, the lengthening days of family and friends we had lost spring. Our daily routines folour minds. We gave up careers in lowed the diurnal and seasonal teaching and moved to a remote rhythms of plants and other aniranch in western Montana to purmals. sue vocations as straggling writThis was the simple life because ers. Our new home was 50 miles was devoted to the most basic it from the nearest town and 10 miles from the closest neighbor. need of all: surviving. In winter We had neither telephone nor we chopped wood to keep ourselves warm; in summer we garelectricity and were snowbound three months a year. Life, like dened, fixed fences and cared for the weather, was harsh. But they cattle. Yet despite its physical were among our best years. And hardships, life at the ranch had a effect. Even though we thpy taught us a lesson about calming faced financial challenges, we conservation that has special rewere infused by an indescribable levance today, as the nation commences an Iraqi-in- s i:red debate sense of optimism and security. Thanks to the absence of televiover energy policy. sion we felt removed from probHaving no electricity, we spent lems in Washington or Lebanon. lanterns. by evenings reading gas But these lights consumed the We read prodigiously, escaping cabin's oxygen, making us drowsy via books to other, even more and sending us to bed before 10 distant times and places. o'clock. So we lived by the sun. In But this idyll was not to last. In the fall, acutely aware that day1979, we got electricity, and our light hours were diminishing, we lives changed abruptly forever. felt urgency to accomplish what From the moment we first threw AP Laserphoto Spectators watch play at the 15th hole of Cypress Point course in Pebble Beach, Calif. priced deals, Schwartz noted. Whitman Corp. had hoped to get $700 million for its Hussmann Corp. commercial refrigerator unit in St. Louis, then pulled it off the market when Sanyo Electric Co.'s bid came in substantially lower, he said. Similarly, Hilton Hotels Corp. removed its "for-sale- " sign this year after bids came in far below the $120 per share some analysts expected. Several Japanese companies, including the leisure and real estate conglomerate EIE International, had been interested. Nowadays, Japanese investments in Midwest steel, automotive and other manufacturing are being praised by such groups as the Indiana Chamber of Commerce for upgrading the economy of what once was the "Rust Belt." Even in Hawaii, where Japanese investments totaling $7.7 billion have many residents worried that the character of their small state will be ruined, some deals are welcomed. In one such case, Japanese brewing giant Suntory Ltd. bought control of the Princeville Resort on Kauai in June after the Australian owner, Qintex, went bankrupt. That allowed construction to resume on a stalled luxury hotel project. Still, the huge island resort deals have drawn more protests than praise. And they've been strengthened by a trend many Hawaiians find disturbing: Japanese companies buying property in Honolulu's older neighborhoods to develop large single-famil- y homes. American critics, even before the deals for Rockefeller Center and Columbia, Barthell noted. But should they be? Some say the criticism is largely unwarranted and emotional. That's especially true when the assets being purchased are property, not technology or trade secrets, said David Germany, senior economist for the Morgan Stanley & Co. securities firm in New York. "They're not taking away the farm. They're taking away owner ship of a place where rich people play golf," Germany said. "If we can't sell Pebble Beach, what can we sell?" In reaction, Honolulu this year passed a law requiring nonresident aliens to report real estate deals. Sponsors said it will help the city develop regulations to control speculative foreign invest- ments. Similar measures have been proposed at the state level. The Japanese, with their traditions of formality, deference and courtesy, were keenly aware of arvin Davis turne d huge profit on deal - Did LOS ANGELES (AP) Marvin Davis sell at the top of the market again, and what's the next target for the cash-heav-y billionaire investor? Can Minora Isutani, who bought the Pebble Beach golf resorts from Davis for between $800 million and $1 billion, package that famous name to recoup his huge investment? Davis and Isutani aren't talking publicly about this month's deal for the 5,300-acr- e Monterey Peninsula property, one of the most famous chunks of land in the world. It includes the Pebble Beach Golf Links, home to the U.S. Open in 1992 and to the Bing Crosby now called the National Pro-AAT&T Pro-AThere are also three other golf courses, two hotels, and a cypress tree so famous the Pebble Beach Co. is seeking a trademark to stop commercial photography of it. Technically, the new owner is Fort Worth's Ben Hogan Properties, a subsidiary of the golf conglomerate Cosmo World Corp. in Los Angeles, which is controlled by Isutani. And the seller was a Denver-base- d partnership, Miller, Klutznick, Davis & Gray. But the deal was struck between Davis, 64, and Isutani, 50, whose Los Angeles offices are nearly within spitting distance in the pricey Century City district. Davis is the former wildcatter who liquidated his oil holdings just before the industry slumped in the early '80s. He acquired Pebble Beach in 1981 as part of a $720 million purchase of 20th Century Fox. Davis sold Fox to Rupert Murdoch four years later, netting $325 million, but kept Pebble Beach. Isutani capitalized on Japan's golf mania by building courses and buying Ben Hogan Co., which makes golf clubs and sportswear, in 1981. He's developing one golf club in the San Fernando Valley, is a partner in another golf resort on Hawaii's Kona Coast, and is also developing a golf resort and luxury housing project near Las Vegas. He has declined to comment on recent news reports in Japan and the United States linking him to the former Nippon Telegraph and Telephone chief who is being tried on bribery charges in Tokyo. He's also generated complaints from Japanese golfers who say he sold so many expensive golf club half-deca- $1.2 billion. memberships that they were forced to wait months before of progress. it """ Such thinking has been especially visible during the last month, Alston Chase ON THE ENVIRONMENT" a light switch our close links with nature were severed and our sense of security disappeared. No longer depending on daylight, we stayed up later. Reading less, we began to watch television, which brought the world's grief and violence into our cozy little cabin. And when we installed a radio phone, we no longer had a place to hide. Nevertheless, we were happy to have electricity. For we had discovered the paradox of progress: Technology doesn't bring happi ness, but offers convenience and entertainment that is addictive. Once hooked on lights, television and phones, we wouldn't give them up. This paradox is a reason some environmentalists give for proposing stringent conservation meatechnolg sures. ogy doesn't improve lives, goes this argument, so it should be curtailed. Since people are addicted to wasteful gadgetry, strict laws must be passed to make them abandon it. They must be Energy-consumin- as Iraqi tanks concentrate the public mind on rational energy policy. Most of the emphasis of this debate has been on conservation, living on less, not on promoting the search for new energy sources. Rather than pushing for market incentives to encourage manufacturers to develop alternative-fueled vehicles, for example, many congressmen and environmentalists, seemingly determined to discourage automobile travel by making it less convenient, are demanding reimposition of the 55 mph highway speed limit and mandating construction of smaller cars (which few people want) that get 50 miles per gallon. There are once again calls for lower thermostats in winter and higher ones in summer. hair-shiBut this mentality is wrong. Although y, Davis insider, speaking on of anonymity, said the decision to sell was made when it became clear a $1 billion asking price might be taken seriously. A being able to schedule games. Its expected he will market Pebble Beach's courses heavily to wealthy Japanese, who think nothing of a jaunt across the Pacific for a few rounds. And, of course, the Pebble Beach name would go nicely along with Ben Hogan's on clothing and gear. Still, real estate experts say it's hard to justify the huge sales price by looking at Pebble weaned from the illusion 1970s Beach's revenue. "I think you can clearly say this was priced at the margin," said Jack Barthell, a managing director of the Kenneth Leventhal real estate accounting firm. Davis had put out sales feelers on Pebble Beach periodically. One story making the rounds tells of a Japanese businessman who was ago at approached a $300 million, a couple of years ago at $600 million, and last year at rt condition "It wasn't a matter of trying to get out at the exact top. It was just tlu.t the numbers made sense," he said, nctine Isutani's possibilities are promising. "It may turn out it's worth $2 billion in five years, and if so, great, we wish him well." cross-marketi- conservation is a vital ingredient in any sound national energy policy, achieving ecological sustaina-bilit- y cannot be accomplished by making war on progress. As Diana and I discovered in Montana, technology may disturb the tranquility of our lives, but it also increases our power to work. Before we got electricity, I wrote with a manual typewriter and had to drive 50 miles to make a telephone call. Now that I possess a fax machine and computer, my productivity and efficiency have increased manyfold. Similarly, only through the help of technology7 can society hope to cope with multiplying environmental threats and the growing scarcity of oil. Our goal should not be to force people to live more primitive lives, but to ensure that modern living is made more environmentally benign. Once the simpie life is gone, we can never bring it back. Nor should we want to. |