Japanese Dessert Firm Owner Taguchi Buys NoMad Apartment Building for $25M

Japanese businesses continue to show strong interest in Manhattan apartment buildings, with recent acquisitions reflecting this trend. Taguchi & Co., a renowned dessert maker, has purchased a 16-unit property at 43 W. 27th St. in the NoMad neighborhood for $24.5 million. The seller, Icon Realty Management, has faced financial challenges with its rental properties.

Economic and Tax Incentives Drive Purchases

The surge in Japanese investments in New York real estate is partly due to an improved Japanese economy and attractive tax incentives in the U.S. Unlike Japan, where real estate deductions are limited to five years, the U.S. offers around 30 years of deductions. This makes U.S. buildings, especially in New York, highly appealing to Japanese investors.

Strategic Shift for Taguchi & Co.

Traditionally investing in aircraft, Taguchi & Co. has shifted its focus to New York real estate. The company’s CEO, Sean Taguchi, highlighted the longevity of New York buildings as a significant factor in their investment strategy. Taguchi also acquired Brooklyn Brands, a bakery group, to expand its market presence in New York.

Tax Strategies and Real Estate Valuation

Japanese tax policies prioritize land over buildings, limiting deductions. In contrast, New York considers buildings more valuable, offering better tax advantages. This discrepancy has driven Japanese investors like Taguchi to target properties with favorable land-to-building ratios, mainly in downtown Manhattan.

Future Investment Plans

Taguchi plans to acquire around 10 more buildings in New York over the next decade, including office towers. The company believes the office sector has hit its lowest point, making it an opportune time for investment. Currently, Taguchi & Co. employs 850 people and generates $250 million in annual revenue.

Icon Realty Management's Financial Struggles

Icon Realty Management, the seller of 43 W. 27th St., has been under financial strain. The company recently received a two-year extension on a $143 million mortgage debt deadline, which includes the property sold to Taguchi & Co. Despite these challenges, Icon continues to manage multiple apartment buildings in New York.