The Imperial Palace in Tokyo

Back in 1989, this piece of land in the heart of Tokyo was worth more than all real estate in California.

Relatively early in my career, I had the opportunity to work on several projects in Tokyo.

While this is a story for another time, I got the opportunity to get a great view over the Imperial Palace during one of my meetings. And got curious.

Japan’s bubble of the late 80s and the following crash are well documented.

Here’s what happened:
➡️ Speculation went bananas and asset prices completely skyrocketed
➡️ Japan’s stock market reached 45% of the global market value, vs. the US’ 33%
➡️ The USD got devalued against the Yen, so Japanese businesses bought assets (Sony acquired Columbia Pictures at that time)
➡️ Land prices peaked at USD 139,000 per sqft, 300 times the equivalent of Manhattan

While it was never up for sale, the Imperial Palace’s land value was worth more than all of California’s real estate at that time. Unthinkable levels of speculation.

And surely not the normal real estate cycle correction that followed in the 1990s.


Sources: Reuters, SCMP

Image source: Ministry of Land, Infrastructure, Transport & Tourism Geographical Survey Institute Map & Aerial Photo Browsing Service via Wikimedia

#International #RealEstate #Transaction #Japan #Bubble