New York City Real Estate

5 During the 1980s, many Americans were alarmed by the acquisition of New York real estate by Japanese industrial corporations. They felt that America was selling out to acquisitive Japanese hordes. Of note was the sale in 1985 of Rockefeller Center to trusts partially owned by Mitsubishi Estate Company. Convinced by everyone involved in the transaction that it was a profitable proposal, the Japanese bought the properties. The trusts had invested nearly $1.4 billion to acquire control of the property.
10 Unfortunately for the Japanese, a very xenophobic press attacked the sale and set out to alarm the citizenry. The press often quoted politicians’ bombastic allusions to Japanese global conquest: imperialistic Japan was going to take over occidental industry and make the United States into a colony for its exports, according to race baiters. Editorial pages of many newspapers appeared as if they were written in the 1940s as opposed to the 1980s.
15 All this was lost on the typical New Yorker, often referred to in the media as Joe Six Pack, who was often unaware of the fees made by dozens of New York banks and law firms in advising the Japanese on these purchases. Joe Six Pack was completely bamboozled by New York-based real es- tate developers who criticized the Japanese primarily because their own
20 properties had not been involved in the bidding frenzy. He was also unaware that the Rockefeller family was not forced to sell the property to Mitsubishi Estate. Many Rockefeller family members wanted to diversify their family’s investments into more liquid investments, and that required the sale of Rockefeller Center.
25 The press did not advise Joe Six Pack that a building could not be taken apart and shipped to Japan. Furthermore, the Japanese had to pay for the building in U.S. dollars and to a U.S. taxpayer. Proceeds from the sale would be ultimately deployed by the Rockefeller family trusts into other, more profitable investments. In addition, Japanese companies would still
30 be required to pay local real estate taxes. Mitsubishi would be forced to operate the building the same way its previous owner had, since it was located in the heart of New York’s most prestigious business district.
35 German, British, and Dutch corporations had invested in New York City real estate for decades. Thus, the Japanese were investing in New York City real estate for the same reason that prior investors had; to make a substantial PROFIT over the vast sums invested.

6. What is the antithesis of the argument made by the xenophobic press about Japanese investment?

  • v. Japanese investors often made investment decisions by themselves.
  • w. The Rockefeller family was misled by its advisors.
  • x. Newspapers always tell the truth.
  • y. New York City real estate cannot be owned by foreigners.
  • z. Japanese companies made investment decisions based on prudent evaluation of potential profits.

7. What is the main idea of this passage?

  • l. Japanese investors often made shrewd investments in the United States.
  • m. Japanese investments were often wrongly portrayed in the press.
  • n. Lawyers and advisors are paid first.
  • o. New York City real estate is a risk-free investment.
  • p. Media companies are in the business of selling advertising, not news.

8. The Japanese invested in US real estate primarily

  • v. to make the United States into a colony.
  • w. to sell Hondas and Toyotas to the tenants.
  • x. because they wanted to get office space for their corporate headquarters.
  • y. to take advantage of the high investment returns available only in the U.S.
  • z. because it was a risky investment.

9. Joe Six Pack, in the above passage, represents

  • l. a real estate investment banker.
  • m. an immigrant from England.
  • n. an astro-physicist.
  • o. a beverage vendor.
  • p. an average resident of New York City.

10. Investing money that you borrowed at 1% and making a positive return on your borrowed funds in excess of 10% is an example of

  • v. a bad investment.
  • w. an investment with very high returns.
  • x. an average investment.
  • y. an investment that Joe Six Pack has available to him.
  • z. an investment that the Rockefellers would not make.